How UMA's Optimistic Oracle Secures Prediction Markets 𧔠đ
The Optimistic Oracle plays a crucial role in securing and resolving prediction markets, like @Polymarket.
Decentralized prediction markets face the hard problems of getting the outcomes of real-world events onchain and resolving market disputes when they occur.
The Optimistic Oracle is designed to solve these problems by delivering this data to the Ethereum blockchain. There are three steps:
1. Proposal: When an event outcome needs to be determined, a proposal is submitted to the oracle.
2. Challenge Period: There is a set period during which the proposed outcome can be challenged. If no valid challenge is made, the proposed outcome is accepted.
3. Resolution: If challenged, a decentralized dispute resolution process is initiated, ensuring that the final outcome is as accurate as possible.
This system ensures that the markets remain fair and trustworthy, as it relies on decentralized consensus rather than a single point of failure.
UMA's Optimistic Oracle is the leading tool for resolving prediction markets onchain. It has resolved more than 10,000 markets for Polymarket and secures several other prediction markets including @poly_bet, @ForeProtocol, Bookies, and @predictdotfun
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