The prediction market platform shifts to time-weighted average pricing and launches a liquidity rewards program to combat manipulation in short-duration crypto markets
Polymarket is overhauling how its short-duration crypto prediction markets settle, replacing single-price snapshots with a time-weighted average price mechanism powered by Chainlink oracles. The upgrade goes live on August 7, 2026, at 00:00 UTC, and comes paired with a $1 million liquidity rewards program designed to deepen trading activity across affected markets.
The core problem being addressed is straightforward: when a market settles based on one price at one moment, anyone with enough capital can shove the price in their favor right before expiry. Polymarket’s fix is to average prices over a window of time, making that kind of last-second manipulation significantly more expensive to pull off.
How the TWAP mechanism works
The new settlement model uses what’s called a TWAP, or time-weighted average price. Instead of checking what Bitcoin or Ethereum costs at the exact second a market expires, the system will average prices across a defined window leading up to expiry.
For 5-minute markets, that window is 30 seconds. For the longer 15-minute and 4-hour markets, it stretches to 60 seconds.
Chainlink Data Streams will serve as the oracle layer computing and reporting these TWAPs on-chain. Polymarket says the mainnet feeds will be live by July 31, 2026, giving a week of buffer before the upgrade kicks in.
Seven major crypto assets fall under the new settlement rules: Bitcoin, Ethereum, Solana, XRP, HYPE, BNB, and Dogecoin.
Where the $1M in rewards is going
Polymarket is distributing $1 million through August 2026 to incentivize market makers and active traders to provide depth across its crypto up/down markets.
The 5-minute markets get the largest share at $550,000. Within that bucket, Bitcoin alone commands $300,000. The remaining $250,000 for 5-minute markets is split between two tiers: $200,000 shared among SOL, ETH, HYPE, and XRP markets, and $50,000 divided between BNB and DOGE.
The 15-minute markets receive $350,000 in rewards, while the 4-hour markets get $100,000.
Why prediction markets care about manipulation
Users have previously flagged that last-minute price pressures in these markets could produce outsized losses for traders who were correctly positioned based on genuine market conditions but got burned by a momentary price spike or dump timed to coincide with settlement.
The shift to TWAP-based settlement is a well-established technique borrowed from traditional finance and DeFi alike. Decentralized exchanges like Uniswap have long used TWAP oracles for similar reasons: making price manipulation prohibitively expensive by forcing bad actors to sustain artificial prices over time rather than just spiking them for an instant.
