Polymarket Adjusts Rules to Counter Temporal Arbitrage Exploits

News Flash 2026-01-11 22:23

A trader identified as 0x8dxd reportedly earned over $515,000 in a month through temporal arbitrage on Polymarket, executing more than 7,300 trades with a near-perfect success rate of 99%. This strategy involved exploiting the delay in Polymarket's price updates compared to real-time prices on exchanges like Binance and Coinbase. By placing orders milliseconds after market prices settled, the trader capitalized on the certainty of price movements rather than predictions. In response, Polymarket has implemented new rules to curb such arbitrage activities. The platform introduced a dynamic taker fee, which can reach up to 3.15%, specifically targeting trades within a 15-minute window in the crypto market. This fee is fully returned to liquidity providers, effectively redistributing profits from arbitrageurs to those maintaining market depth. This move aims to suppress short-term exploitation while preserving market integrity.

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