Prediction markets like Polymarket face a critical design flaw: contracts that can be resolved by a single participant at low cost create perverse incentives to manipulate outcomes, thereby damaging their credibility as tools for uncovering the truth. This vulnerability is especially pronounced in low-volume political or event-based markets, where the profits generated could be used to fund the very behaviors they aim to predict. To earn long-term trust and avoid strong regulatory opposition, platforms must implement strict listing standards that exclude easily exploitable contracts, ensuring they reflect the real world rather than attempting to manipulate it.

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