Recently, the prediction market platform Polymarket hit the headlines due to a payout refusal controversy. The core of the incident is simple — users bet a total of $10.5 million on the prediction question "Will the U.S. arrest the Venezuelan president this year?" The event indeed happened, but the platform ultimately refused to pay out.

Where did the problem lie? The platform claimed that "the arrest did not occur within U.S. territory," thus ruling that "the condition was not met." But the users' logic is: I bet on the fact that "the U.S. will arrest this person," regardless of where it happens; the event has already occurred. When the market was launched, the platform never mentioned a detail clause like "must be arrested within U.S. borders."

This incident reveals two deep-seated issues in prediction market operations. First is rule ambiguity — the platform has full control over defining the vague concept of "arrest," and users cannot accurately predict how the platform will interpret it when placing bets. Second is centralization risk — although claiming to operate with smart contracts, the platform still retains "manual intervention" rights, turning the prediction market into another form of centralized gambling system, where the final fate of user funds is decided solely by the platform.

This operation has triggered chain reactions of concern within the community. Users of other prediction markets like Augur and Gnosis have also begun scrutinizing platform rules and terms, fearing they might face the same situation. A deeper question is: if the platform can arbitrarily expand the scope of "condition fulfilled" interpretations, what is the true purpose of prediction markets? The answer becomes: it depends on the platform's attitude.

Currently, the community is watching two possible directions: either the platform proactively pays out to maintain its reputation, or it stubbornly refuses to pay. Regardless, this controversy has already sounded an alarm across the entire Web3 ecosystem — clarity of rules and transparency of platforms are no longer optional but essential for financial products like prediction markets.