Outcome Resolution System for Prediction Markets

Prediction Market Outcome Resolution System

Prediction market — betting market on real events: "Will team A win?", "Will ETH reach $5000 by year-end?", "Will bill X be passed?". Entire tokenomics works only if outcome determined correctly and honestly. Resolution system — critical component.

Event Types and Their Resolution

Price-based: "Will BTC be above $100K by Dec 31?"

• Auto-resolves via Chainlink/Pyth price feed at expiration
• Least controversial, fully on-chain

Sports/Political: "Who wins the election?"

• Requires external data
• Oracles like Augur, UMA, API3, Kleros

Subjective: "Did project deliver promise?"

• Requires human judgment
• Claim-challenge systems, collective voting

Automatic Oracle-Based Resolution

For objectively verifiable events — automatic resolution via oracle.

contract PriceMarket {
    AggregatorV3Interface public priceOracle;
    uint256 public resolutionTimestamp;
    uint256 public targetPrice;
    
    bool public resolved;
    bool public outcomeYes;
    
    function resolve() external {
        require(block.timestamp >= resolutionTimestamp, "Too early");
        require(!resolved, "Already resolved");
        
        // Check oracle staleness at resolution
        (,int256 price,,uint256 updatedAt,) = priceOracle.latestRoundData();
        require(updatedAt >= resolutionTimestamp - 3600, "Oracle stale");
        
        resolved = true;
        outcomeYes = uint256(price) >= targetPrice;
        emit MarketResolved(outcomeYes, uint256(price));
    }
}

Key nuances:

• Which exact price to take? Price at exact expiration moment, or TWAP over last hour?
• What if oracle updated long before expiration? Get historical value via roundId.

UMA Optimistic Oracle

UMA's Optimistic Oracle — popular for prediction markets (Polymarket uses UMA).

Mechanism:

1. Proposer proposes result + bond
2. Dispute window (2 hours): anyone can dispute + counter-bond
3. No dispute → result accepted
4. Dispute → UMA DVM voting (token holders vote)

UMA optimistic: 95% requests resolve without dispute. Makes it cheap and fast.

Reality.eth for Subjective Events

Reality.eth — escalation game for subjective questions:

1. Anyone asks question + bond
2. Anyone answers + bond (overrides previous)
3. Each dispute — bond doubles, timeout increases
4. Final answer via Kleros arbitration at high bond

Rational behavior: if you know right answer — profitable to dispute wrong one (get loser's bond). Creates truthful result.

System for Pausing on Disputed Outcomes

Even with automatic resolution, edge cases exist: oracle returns clearly wrong value, event cancelled, force majeure.

address public guardian;  // multisig DAO

function disputeResolution() external {
    require(msg.sender == guardian, "Not guardian");
    require(block.timestamp < resolutionTimestamp + DISPUTE_WINDOW, "Too late");
    
    resolved = false;  // Reset
    emit ResolutionDisputed(msg.sender, block.timestamp);
    // Trigger manual resolution process
}

Prediction market resolution system — 4-8 weeks development plus Legal review for compliance with gambling regulations in target jurisdictions.