How do platforms settle complex bets? Dive into the technical landscape of market resolution protocols š§µš
Prediction markets require robust settlement & dispute resolution protocols. Let's examine 3 primary architecturesā¦
1. Centralized Resolution
- A single trusted entity (often the platform) determines outcomes
- Pros: Low latency, high throughput
- Cons: Single point of failure, potential for censorship
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2. Oracle-Based Resolution
- Decentralized networks of data providers report real-world data on-chain
- E.g., UMA's Optimistic Oracle: Utilizes optimistic verification + decentralized dispute resolution
- Pros: Scalable, resistant to manipulation
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3. Hybrid Models
- Combine multiple resolution methods
- E.g., Centralized feed with decentralized arbitration fallback
- Pros: Balances efficiency and trustlessness
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Each architecture presents unique trade-offs in security, speed, and decentralization. The optimal choice depends on specific use cases and risk tolerance. Which resolution model do you prefer? š®
