Last updated
Last updated
When a market expires, Predict queries 's optimistic oracle — a decentralized system that reports the correct outcome of a given event. The oracle acts as Predict's source of truth, leveraging a clever mechanism for settlement and dispute resolution.
When an event occurs, Predict asks UMA for the outcome.
On the UMA side, users are financially incentivized to provide the correct response:
A user (referred to as an Asserter) puts forward an answer, locking up their own funds in a 'bond.'
A dispute period is initiated, where anyone can contest the answer provided.
If no one raises a dispute within this period, the answer is assumed to be true, and the Asserter's bond is returned plus a reward.
Should someone (a Disputer) wish to challenge the Asserter's answer, they will also put up a bond and trigger a dispute.
At this stage, Voters, who stake UMA's native token, determine the correct result independently and cast a vote to that effect.
Based on the outcome of the vote:
The correct voters receive additional tokens, while the incorrect ones have their staked amount slashed.
The losing Asserter/Disputer loses their bond, with half of it paid to the other party in the challenge and the other half paid to the protocol.
This system relies on a combination of incentives and sanctions to keep participants acting honestly.
Learn more over at .