Polymarket contracts asking whether President Donald Trump would declassify UFO files in 2025 remained at 5.5% on Dec. 6, but jumped toward 90% the next day.
It is believed that the trigger was not a White House announcement or a Pentagon press conference, but a resolution proposal submitted to the UMA Protocol, a decentralized oracle that resolves polymarket disputes.
On December 7th, someone claimed that the September document from the All Domains Anomaly Resolution Authority was declassified, and traders bought accordingly.
The deal had raised a lifetime total of more than $16 million by the time it was finalized last night, but the odds spiked not because of new information but because of a governance vote in favor of a payout by the end of the year.
The resolution hinges on whether AARO’s four-page information document, published Sept. 19 and titled “AARO and the Declassification Process,” meets the terms of the agreement. That’s what the whales decided.
The document discusses AARO’s commitment to transparency and includes screenshots of a previously classified video known as the “Jellyfish Video,” now available on the Defense Video Information Distribution Service.
The proponent argued that AARO operates under the Department of Defense, which reports to President Trump, and that the agency’s official X account states that the content includes “newly declassified video.”
According to the Dec. 7 UMA proposal, “All parts of the rule have been met. This market should resolve with a Yes.”
How the oracle controversy works
Polymarket’s resolution process routes disputed markets to the UMA protocol, a decentralized truth machine where token holders vote on the outcome.
The terms of the contract state that a “yes” will only be paid if the Trump administration declassifies previously classified files related to extraterrestrial life and unidentified aerial phenomena by 11:59 p.m. ET on Dec. 31, 2025.
The main source of information for the solution is official information from the US government, and the “Agreement on Credible Reporting” is used as an alternative. AARO documents meet the first criterion because they are official .mil domain publications of the Department of Defense.
However, whether this constitutes “declassification” of the UAP file is a matter of debate.
Contrarian users disputed this proposal, arguing that AARO’s paper was procedural guidance on the declassification process, not the declassification of specific UAP files.
This document explains why UAP images often remain classified to protect sensor functionality rather than because of extraterrestrial content, and outlines the multi-step review process that AARO uses to facilitate declassification.
Some previously shelved files are not released. We publish a single video that explains the bureaucratic workflow. The dispute progressed through UMA’s escalation ladder: first proposal, controversy, governance vote, second controversy, and final review.
According to the UMA document, no objections remain after the final review and Polymarket users must accept the results.
Two questions arise regarding this timing.
First, why did it take nearly three months for someone to file a resolution? The AARO document was filed on September 19th, but the UMA proposal arrived on December 7th.
Second, why did polymarket odds skyrocket on the same day the proposal was submitted? Either traders got ahead of the governance outcome and bought YES shares cheaply before the resolution was forced by vote, or UMA token holders orchestrated a squeeze by using their governance voting power to fabricate payments and monetize early positions.
AlphaRaccoon precedent
The controversy comes weeks after another insider trading incident at Polymarket.
On December 4th, it was reported that trader AlphaRaccoon made more than $1 million in profits in one day by betting on Google’s “Search Annual” market.
Google briefly leaked the data early on and then retracted it, but not until AlphaRaccoon won 22-23 on the prediction. The trader’s account had $3.9 million in open positions and showed a history of early bets on the release of Gemini 3.0 before official results were announced.
The market judgment is that this behavior suggests insider trading.
The governance dynamics of the UFO contract reflect the information asymmetry that made AlphaRaccoon’s trade so profitable.
In either case, it would not be impossible for a small group of potential Google insiders or UMA token holders with early knowledge of the solution to act before the broader market reprices.
If someone knows that the “Yes” proposal will be decided on December 7th and understands how UMA voting works, they could accumulate YES shares at 5.5% and exit after the odds have increased.
The difference is that AlphaRaccoon may have misused private data. UFO trading takes advantage of ambiguities in the language of resolutions and the timing of governance proposals.
Statements from information disclosure activists
The Disclosure Party, a decentralized network focused on UAP transparency, dismissed the AARO document released in September as a public relations stunt.
In a detailed post on September 19, the group argued that AARO’s claims about transparency “do not stand up to legal scrutiny” and that the agency’s justification for withholding UAP data was “legally indefensible.”
The group noted that AARO claims its sensors are protected by UFO secrecy. However, the Pentagon has already released UAP footage from the same sensor, creating contradictory accounts that would fail in a FOIA lawsuit.
This assessment goes both ways. If the AARO document is procedural PR rather than substantive declassification, the UMA proposal should fail.
On the other hand, the agency’s commitment to transparency and the release of the jellyfish video give the “yes” side an argument.
The contract language does not specify how many files need to be declassified or whether procedural guidance is important.
Asking whether the administration will “declassify previously classified files,” the AARO document reveals at least one video frame that was marked “unclassified” after review.
Whether it meets the spirit of the contract is a question for UMA’s governance to answer, not the facts themselves.
Who decides the truth?
This resolution will determine whether decentralized oracles can determine ambiguous real-world events or are vulnerable to governance manipulation if the language is lax.
If UMA votes “yes,” traders who sold on the rally will argue that the oracle rewarded semantic games rather than content. If UMA votes “no,” early purchasers will argue that the platform ignores official government documents and fails to adhere to its own resolution standards.
Polymarket promotes itself as a forum for price discovery at real-world events. Still, the UFO contract shows that “real world” outcomes depend on who interprets the language and when proposals are submitted.
Traders who bought YES at 5.5% on Dec. 7 either believed the AARO documents met the terms of the deal, or they believed UMA’s governance would be persuaded regardless.
The deal was resolved after UMA’s final review concluded last night, and the market will now decide whether the prediction platform will resolve the dispute by evidence or through token-weighted voting.
