> pay out to neither side and pocket all funds at stake That's also not possible, as far as I understand. If the smart contracts are worth their salt, the only

> pay out to neither side and pocket all funds at stake That's also not possible, as far as I understand. If the smart contracts are worth their salt, the only possible outcomes per binary option is to pay out in full to either "yes" or to "no" holders, not to any other unrelated party, including Polymarket. The real risk is somebody subverting a sufficiently large proportion of (anonymous, stake-based) arbiters on UMA, which is the on-chain entity that actually arbitrates outcomes and as such releases funds to one side or the other. Then, somebody could buy the "wrong" outcome tokens for cheap and flip the payout their way. No idea how feasible that is and which game-theoretic protections UMA/Polymarket have against that possibility, but I don't think we've seen a smoking gun for that yet.