Polymarket to Upgrade Cryptocurrency Prediction Market Settlement Rule: Moving Away from Single Price Snapshot to Time-Weighted Average Price

July 30th: The prediction market Polymarket announced a significant adjustment to its cryptocurrency price market settlement mechanism starting from August 7th to protect market integrity. Starting from midnight UTC on that day, the affected markets will no longer settle based on a single timepoint price snapshot but will instead switch to using Time-Weighted Average Price (TWAP). Different market durations correspond to different TWAP windows: all 5-minute markets will use a 30-second TWAP, 15-minute markets will use a 60-second TWAP, and 4-hour markets will also use a 60-second TWAP. The previous single snapshot settlement method was prone to price manipulation during periods of low liquidity. This change is Polymarket's proactive strengthening of the market integrity system following consecutive regulatory scrutiny.

To support this transition, Polymarket will inject a $1 million liquidity incentive into all affected markets throughout August. On the technical side, Chainlink TWAP testnet data feeds are now available, with mainnet data feeds and Polymarket real-time data feed services set to launch on August 4th. Developers will be able to access TWAP prices directly through Chainlink Data Streams or Polymarket's public WebSocket.