Governance Attack on UMA by 'BornTooLate.Eth' Influences Ukraine-Themed Contract

An unidentified individual, operating from an Ethereum wallet named 'BornTooLate.Eth', has executed a governance attack on UMA, a decision-making oracle utilized by Polymarket. The attack targeted the outcome of a Ukraine-themed contract by becoming one of the largest holders of UMA tokens, thereby gaining significant influence over the resolution of disputes within the platform.

UMA, a decentralized "optimistic" oracle protocol, resolves disputes in prediction markets by allowing UMA token holders to vote on contentious outcomes. This protocol has previously faced criticism for its subjective decisions in resolving disputed markets, such as those involving Barron Trump's Presidential meme coin, the nature of 'finding' the OceanGate submarine, and Venezuela's contested election. These decisions have frustrated certain market participants due to their perceived lack of objectivity.

On-chain data reveals that BornTooLate.eth holds approximately 1.3 million UMA tokens, making them a top-5 governance staker. This substantial holding grants them considerable sway over the resolution of UMA disputes. In the case of the Ukraine-themed market that was attacked, the contract asked bettors to speculate on the possibility of a deal being signed involving U.S. access to the country's rare earth resources by the end of March. Despite reports of a deal in progress, nothing has been formally signed. However, on Polymarket, the contract resolved to 'yes' after BornTooLate.Eth used their staked UMA tokens to vote 'yes' on the resolution.

Interestingly, this attack does not appear to have yielded a significant financial gain for any of the participants. Market data from on-chain curator Polymarket Analytics indicates that the largest winner from the contract took home just over $55,000, while the biggest loser forfeited around $73,000. An etherscan page for BornTooLate.Eth shows that the actor began accumulating UMA tokens over a year ago. Given their holdings of over 1.3 million tokens, building that sort of treasury for the attack would have cost over $2 million.

In response to the incident, Polymarket has stated that no refunds will be issued because this is not considered a "market failure." The platform has also expressed its commitment to building resilient systems in which everyone can trust. A spokesperson for Polymarket posted on Discord, stating, "This market resolved against the expectations of our users and our clarification. We’re committed to building the future of prediction markets, which requires building resilient systems in which everyone can trust." Polymarket founder Shayne Coplan did not immediately respond to a request for comment.