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The secret to making huge profits in prediction markets often lies in the most inconspicuous places—those terms, restrictions, and definitions. Take Polymarket as an example, the players who truly profit are not the ones making money from news sensitivity.
Recently, the market for the declassified document disclosure is a typical example. While most people celebrate and cheer for tens of thousands of declassified contents, with the YES odds soaring to 99%, what are the savvy traders doing? They are studying the Resolution Rules. Because how the market ultimately settles is not determined by the news facts, but by those seemingly dull rules and clauses.
This is called "Rule Kill"—it's not about who predicts the news more accurately, but about who understands the game rules more thoroughly. The YES that market sentiment pushes up may instantly turn into a joke due to a definitional ambiguity. This is the dark side of prediction markets—information asymmetry often loses to rule asymmetry.