The US Presidential Elections will probably provide another surprise! Some will support Trump, some will support Harris. The odds for each candidate are constantly shifting and the prediction markets are reaching record breaking volumes.
Any user with a web3 wallet can bet on events and receive fair rewards if the bet is correct, but how did blockchain enhanced the user's experience? UMA's Optimistic Oracle played a major part in the prediction markets success story!
The UMA ecosystem is growing fast. The Optimistic Oracle, Oval, and oSnap serve a wide array of blue chip protocols. The most interesting segment of the ecosystem? I will say prediction markets without thinking twice about it!
Prediction markets have been a major focus in the crypto space ever since they were first mentioned in the Ethereum whitepaper. These markets enable users to bet on the outcomes of real-world events, like elections or sports results, in a decentralized and trustless manner.
Online bookies are bullies, charging high fees and even blocking successful players from betting. Online betting companies will enforce low maximum limits to customers and play any card in their sleeves to make profit. The synergy created by the Optimistic Oracle and Polymarket created an open and trustless alternative.
Prediction markets have long held a place at the heart of the Cryptoverse and the Polymarket success story was built on UMA's Optimistic Oracle. The Web3 platform helps users bet on current events in sports, politics and more. The OO uses game theoretical principles to find a Schelling Point for any outcome, which makes it a powerful tool for resolving Polymarket disputes.
Sometimes, disputes arise when there is disagreement over the outcome of a particular event. In blockchains, most problems are resolved cryptographically. Prediction markets however require blockchains to verify natural language statements, which can be subjective and open to interpretation.
Prediction markets are fun, but disputes aren’t. It’s a zero-sum game and intersubjectivity is inevitable, especially when the stakes are high. So, what is the best way to resolve prediction market disputes? The answer is ... a decentralized and transparent manner! This ensures that no single-entity has control over the resolution and establishes a trustless foundation to operate upon.
UMA’s Optimistic Oracle has proven itself to be the best tool for the job. The Optimistic Oracle uses a unique Data Verification Mechanism (DVM) to verify real-world information on-chain. The DVM effectively employs a Schelling Point approach for dispute resolution.
In this method, a group of reasonable individuals without a direct stake in the outcome are asked to vote on the dispute in a shielded manner. The goal here is to reach a "Schelling Point,” which is a natural focal point where everyone arrives at a reasonable and fair conclusion.
This approach leverages the wisdom of the crowd and reduces the likelihood of manipulation or bias. It's a unique way to resolve disputes while maintaining decentralization, fairness, and trust. So far, the Optimistic Oracle has successfully settled over 22,000 outcome assertions with a 1.67% dispute rate.
Several prediction market platforms, including Polymarket, use the Optimistic Oracle to settle prediction markets and resolve disputes onchain. Polymarket went mainstream and was featured on CNN due to the Presidential markets. However, not many know that UMA's Optimistic Oracle is under the bonnet!
The Predict beta just went live on Blast! I had a look at the yield-bearing prediction market and explored the range of available forecasts, from the outcomes of the presidential elections to upcoming crypto prices.
This is something different! You pick your poison and place your bets, then you’ll earn 6% native yield on the stables you hold on Predict, whether they’re deployed in open positions or chilling in your wallet! No-brainer!
That's not all! The users provide liquidity and earn Blast Gold and points! I started small, predicting the upcoming price of $ETH and $SOL! Won one and lost one, then put the full amount on Kamala Harris! The value of my positions earns yield, blast points and hopefully a chunk of Blast Gold!
At UMA, we believe in the power of decentralized, community-driven solutions. The Optimistic Oracle allows us to resolve disputes fairly, transparently, and in a decentralized manner. As prediction markets evolve and become more integral to the DeFi ecosystem, the ability to resolve disputes fairly and transparently will continue to be absolutely critical.
Across is proud to be part of the UMA ecosystem, with the Optimistic Oracle powering the Across bridge and oSnap securing the Snapshot space. The ecosystem is getting bigger and bigger! The growth is as wonderful as Taylor Swift's success!
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