Market Resolution

Learn how Prediction Markets use the UMA Optimistic Oracle to confirm outcomes and how winning positions are redeemed.

Once an event outcome is known, the Market enters the resolution process. Resolution determines the final winning outcome so that the corresponding outcome token can be redeemed for 1 USDT per share, while losing outcome tokens become worthless.

Prediction Markets can use the UMA Optimistic Oracle for decentralized outcome confirmation. Any eligible participant can propose an outcome and can dispute a result they believe is incorrect.

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Resolution Rules

Before trading begins, each Market should define its resolution rules, including:

• Resolution Source: the data source used to determine the outcome, such as an official announcement or specified website;
• End Date: when the time condition for resolution is satisfied;
• Edge Cases: how exceptional, ambiguous, or special situations are handled.

Read the complete resolution rules before trading. The market title is only a short summary of the question; the specific Resolution Rules determine how the market is actually settled.

1. Submit a Proposal

   The proposer selects the final outcome, posts a bond, and submits the Proposal to the UMA Oracle.

   If the result is correct and no one disputes it, the proposer can recover the bond and receive the applicable reward.

   Submitting an incorrect outcome or proposing too early can result in loss of the bond. Only submit a Proposal after confirming the result and understanding the resolution rules.

2. Challenge Period

   After the Proposal is submitted, a challenge period begins and other participants can dispute the result.

   • No challenge: the Proposal is accepted and the Market resolves.
   • Challenge occurs: another Proposal round begins; if disputes continue, the process can escalate to UMA DVM voting.

   Common flows include:

   1. No dispute: Proposal → Resolve.
   2. One dispute: Proposal → Challenge → Second Proposal → Resolve.
   3. Multiple disputes: further escalation to UMA voting for the final result.
3. Dispute

   Raising a dispute generally requires posting a Counter Bond corresponding to the proposer’s bond. If the dispute escalates, the process can enter an evidence and discussion stage.

4. UMA Voting

   When a dispute reaches the DVM, UMA Token holders vote on the final result.

   Result	Handling
   Proposal is correct	Original Proposal is accepted
   Disputer is correct	Original Proposal is rejected and the result must be determined again
   Too Early	The event has not yet met the resolution conditions
   Unknown / 50-50	Rare cases that cannot be determined clearly may use special settlement rules

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After Resolution

Once the Market is resolved:

• trading stops;
• each winning outcome token can be redeemed for 1 USDT;
• each losing outcome token is worth 0.

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Redeeming Outcome Tokens

Users can burn winning ERC-1155 outcome tokens through the relevant CTF / Collateral Adapter and receive the released USDT collateral.

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Resolution Timing

Actual resolution time depends on whether disputes occur:

Stage	Typical Duration
Challenge Period	About 2 hours
Debate Period (if disputed)	About 24–48 hours
UMA Voting (if escalated)	About 48 hours

Resolution is generally faster when no dispute occurs. With multiple dispute rounds, the full process may take several days.

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Next Steps

Positions & Outcome Tokens

Learn how winning Tokens become redeemable positions.

Markets & Events

Review how Markets and Events are organized.