Original Title: 《Prediction Markets Spark Another Big Controversy: Are You Trading Facts or Rules?》

Original Author: Asher, Odaily Planet Daily

Prediction markets are arguably the hottest track in Web3 discussions right now.

Forecast trading surrounding macro events, the crypto industry, and even entertainment topics has continued to heat up, with discussion intensity and participation steadily climbing. However, as the market develops rapidly, some discordant voices have also gradually emerged—certain events at settlement time diverged from users’ expectations based on common sense or “real-world understanding,” triggering debates over rule design, fairness, and even a platform’s credibility.

Recently, prediction markets have seen two highly controversial incidents in succession. Below, Odaily Planet Daily will sort through and discuss them.

Polymarket: US rescue of a US service member pilot in Iran is ruled as an invasion of Iran by the United States

On April 3, a US Air Force F-15E Strike Eagle fighter was shot down by Iran’s air defense system in the southwestern part of Iran. The two crew members onboard (one pilot, one weapons systems officer/WSO) ejected—one was quickly rescued, while the other remained missing for several days, hiding in Iran’s mountainous regions.

The US military then carried out search and rescue (SAR) operations, involving armed aircraft, helicopters, and more. Ultimately, it successfully rescued the second crew member who had sustained severe injuries (Trump personally announced “WE GOT HIM”). The rescue operation involved US forces entering Iranian territory (mountainous area search and rescue, and possible ground or low-altitude action), which has drawn attention in the current backdrop of sensitive geopolitical conflict.

Because, to some extent, US forces entering Iranian territory also counts as the US invading Iran, it directly affected Polymarket’s prediction event on when the US military would invade Iran (US forces enter Iran by?)

According to the settlement rules, active-duty US personnel (including special operations forces) entering Iran’s land territory before the specified date are considered an invasion. The shot-down pilot does not count as an invasion, but the special forces that were sent did enter Iran to rescue the pilot. Therefore, the special forces entering Iran to rescue the pilot meets the standard for the invasion-of-Iran outcome being “Yes” for the United States.

The “Rescue the Pilot” event: Polymarket has ruled it as a US invasion of Iran, sparking intense community controversy.

Supporters of counting it as an entry (Yes side) argue that this action aligns with the rules’ definition of “entering.” The US special operations forces deliberately entered Iranian territory to carry out the mission, and the rules clearly state that “special operation forces will qualify,” while also covering “for operational purposes (including humanitarian).” From the objective facts, this is the first confirmed US ground infiltration behavior in the context of the current conflict—US personnel indeed set foot on Iranian soil—so it should be regarded as “entering.”

Opponents of counting it as an entry (No side) argue that this definition is an excessive stretch. Fundamentally, this was a short-duration, limited-scale humanitarian rescue, neither a combat invasion, nor is there any occupation intent. It does not match the public’s common-sense understanding of “US forces entering Iran.”

At the same time, the rules have explicitly excluded “pilots who are shot down… will not qualify.” In this case, the action is precisely centered on the shot-down pilot, and it has the nature of being “forced to enter.” Logically, it should fall under a similar exception. Citing past precedents (for example, operations in similar regions not being regarded as invasions), rescue actions should not be treated as the same as military entry. If ruled “Yes,” it could encourage edge-case reinterpretations of the rules, weakening the market’s seriousness and consistency.

Chinese communities also generally believe that “entering Iran” should more properly refer to large-scale ground or amphibious operations, not a short-term action to rescue someone and leave.

Predict.fun: Polymarket’s issuance of a stablecoin is ruled as “issuing a token”

Late on April 6, Polymarket officially announced on X that it would upgrade the full trading platform:

Rebuild the trading engine, upgrade smart contracts; launch a new native collateralized token Polymarket USD (1:1 pegged to USDC, used to replace USDC.e to reduce bridge risk).

In particular, the mention of launching the native collateralized token Polymarket USD directly affects the probabilities of two related prediction events on the Predict.fun platform.

First is “issuing a token”; second is “market cap after token issuance”:

1、When will Polymarket launch a token (Will Polymarket launch a token by ___ ?).

2、FDV one day after the market opens (Polymarket FDV above ___ one day after launch?).

If we look at the settlement rules documentation, it clearly states that “any fungible token of Polymarket counts as the ‘launching a token’ in this event,” so stablecoins are obviously no exception. Therefore, Polymarket’s stablecoin meets the standard to be ruled “Yes.”

Notes related to settlement rules

The community then launched into a debate over this.

Supporters argue that, based on the literal wording of the rules, “issuing a token” is not limited to having to be a “governance token,” but rather refers generally to all tokens. Under this premise, Polymarket USD, as a fungible token issued by Polymarket such as an ERC20/SPL token, essentially satisfies the definition of “issuing a token.” In addition, the official follow-up clarifications are more a reiteration of the original rules rather than a temporary rule change, so they have a degree of reasonableness in terms of compliance.

But the challengers do not accept this explanation. On one hand, they argue that including a stablecoin in the category of “issuing a token” is an overinterpretation of the rules—classic wordplay. On the other hand, even if a stablecoin is admitted to count as “issuing a token,” the core of this prediction market is still “Polymarket FDV,” not “Polymarket USD FDV.” Stablecoins are more like collateral (collateral) or a settlement instrument; their market-cap structure differs fundamentally from the project’s main token (such as the POLY governance token). Therefore, they should not be directly equated with or replace the project’s overall valuation logic.

Which side are you on?

Overall, these controversial incidents in prediction markets all come down to one core question: are you betting on “reality,” or betting on “the rules”? In many cases, these two do not completely overlap.

For those of us participating in prediction markets, understanding the rules themselves may be more important than judging the direction of an event. How the information source defines terms, whether there are exception clauses, and whether there is room for interpretation—these details will directly determine who wins or loses at critical moments.

And it’s precisely because of this that some high-probability events look like a “get-rich scheme,” and they may not be without risk—possibly even a “lose-everything scheme.” Many reversals happen right in these overlooked details. Compared with blindly placing bets, taking a closer look at the rules is more useful than complaining after losing money.

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