Polkamarkets 101 Series: How market resolution works?
--
In the fourth article of the Polkamarkets 101 Series, we cover the topic of how market resolution works on Polkamarkets. Polkamarkets 101 is a series of videos and extended Help Center articles that make it easier for users to get started with Polkamarkets.
How market resolution works
Oracles are sources of truth for blockchain-based protocols. In Polkamarkets, anyone can be an Oracle and determine the winning outcome of a prediction market. This is important because the payouts are based on the market resolution.
One of the main differences between Polkamarkets-powered prediction marketplaces and other blockchain-based marketplaces is that the resolution mechanism is crowd-sourced and decentralized by default. Developers and businesses building prediction markets using the Polkamarkets tech toolkit can modify this default behavior to suit their needs.
For example, developers can hook into the reality.eth bonding contract that we leverage, and use our partner Kleros to implement court-based dispute resolution, use partner ChainLink to automate market resolution, or to build a centralized mechanism to resolve markets themselves and become the only Oracle in their marketplace.
Using Polkamarkets on Moonriver and Moonbeam, via the smart contracts directly or via our app, any individual can act as an Oracle. This article explains how anyone can participate in the correct resolution of prediction markets using the Polkamarkets app.
Crowdsourced Event Resolution
Anyone can use the POLK token to be an Oracle:
- After the event resolution date has elapsed, anyone can use POLK to place bonds — let’s call them answers — on the outcome that they believe is the correct one.
- Answers can be challenged via the posting of another answer and a higher bond.
- A timeout period is started after an answer is placed. After that timeout expires with no challenges, that final unchallenged answer is accepted as the correct one.
- Correct answers receive their bond back, plus the reward and incorrect answers lose their bond.
Under the hood, Polkamarkets uses the reality.eth smart contract for bond management. You can check out their documentation to know in detail how payouts work.
How-to Instructions
After the event expiration date elapses, users can now place a bond, using POLK as an ERC20 for disputes.
Step 1: Get POLK on Moonriver
Check our guide on how to buy POLK on Moonriver, or how to bridge it from the Ethereum network.
Step 2: Allow the platform to use POLK
Allow our platform to use your POLK. Click on the Allow Polkamarkets button. You’ll get a wallet popup to authorize the transaction.
Step 3: Placing bonds
Place a bond on the correct outcome. Use the input field or slider for your convenience.
After the bond is placed, a 3-day timeout period is started, which will allow other users to dispute and place bonds on other outcomes.
Every time a user places a bond on a different outcome, that 3-day period restarts, and the POLK amount needed to place a bond doubles.
You can show how much time is left until the timeout period expires and the market resolves on the report screen above the input.
Step 4: Wait for the timeout period
Please wait until the timeout period has elapsed.
Once elapsed, you are now one step away from claiming your winnings! After the timeout period is completed, the smart contract needs to acknowledge the bonds placed and compute the market payouts. That can be done by clicking Resolve on the screen below:
Step 5: The market is Resolved
The market is resolved 🎉 Go to your portfolio and claim your winnings.
You can learn more in the help center, where you’ll find information regarding the following topics:
- Basic information about the Polkamarkets Protocol
- How to create a verifiable market
- POLK Token & Tokenomics
- Other Frequently Asked Questions
About Polkamarkets
Polkamarkets is an Autonomous Prediction Market Protocol built for multi-chain information exchange and trading where users take positions on outcomes of real-world events–in decentralized and interoperable EVMs.
