There’s been a split in the Polymarket on the MicroStrategy sell-off lately, with ongoing debates about the criteria for confirming a 'sell'.

MicroStrategy actually sold 32 BTC between May 26-31, and only disclosed it on June 1 via an 8-K. The market on Polymarket for 'Did they sell before May 31?' is currently leaning towards No, citing a lack of publicly verifiable information before the deadline.

Support for this ruling (like in CarOnPolymarket's article) suggests that prediction markets need a hard cutoff.

If information disclosure is allowed to retroactively affect outcomes, the market loses its finality and predictability. Traders are betting not on 'will it be found out in the future', but rather on 'can it be reasonably known before that point in time'.

This logic itself has its rationale, especially in highly liquid markets.

But I think a key distinction is overlooked here:

The nature of the information source differs, which should lead to different reasonable timing for judgment.

If a company primarily relies on periodic disclosures (like 8-Ks, financial reports, etc.) to publicly announce its Bitcoin trading activities, then the rules must allow for a reasonable delay window for disclosures.

Otherwise, it would mean requiring companies to disclose at the same time as the trades occur, which does not align with the actual operational rhythm of traditional public companies.

On the flip side, if the trades are fully on-chain traceable and can technically be independently monitored and verified (like directly transferring from known addresses with attribution), then it can quickly be determined whether it occurred after the cutoff time.

In this scenario, it makes sense to strictly pin the judgment to a specific time point. Because the information itself is real-time visible, there's no issue of 'disclosure lag'.

MicroStrategy's recent sell-off of coins falls into the first category; it follows the traditional disclosure path of a US public company rather than the direct on-chain verifiable real-time actions.

Therefore, imposing a standard that requires public information before the cutoff for an event that needs disclosure creates a mismatch.

The result is that the event occurred before the cutoff, but because the disclosure happened later, it gets judged as 'not happening'. This feels like the rules are punishing those who bet 'Yes' for the 'natural delay of information disclosure'.

A better approach might be to design different standards for different types of events:

> Pure on-chain, independently verifiable actions: strictly judge by the event occurrence time + monitorable status before the cutoff;
> Actions requiring company voluntary disclosure: explicitly provide a reasonable disclosure window in the rules (for example, disclosures within X days after the event still count for that period);
> Or directly state in the market title and rules: 'based on the time of initial public disclosure'.

This both protects the predictability of the market and aligns more closely with the flow of information in the real world.

The greatest value of prediction markets is to compress the future of a complex world into tradable probabilities.

However, if the rules lack fine distinctions on 'how information is generated and flows', absurd results will continue to arise, where something clearly happened but is judged as 'not happening' because of disclosure timing.

This is detrimental to market credibility and does not incentivize relevant companies to improve transparency.

This incident exposes the roughness of prediction market rules when dealing with traditional financial entities.

Companies like MicroStrategy, which operate as Bitcoin treasury firms, will continue to generate similar controversies in the future regarding coin sales, financing, and even large transfers.

Rather than relying on post-fact disputes and UMA voting every time, it would be better to differentiate 'disclosure-related events' from 'on-chain verifiable events' during the market design phase and provide a more reasonable judgment timing.