Chainfeeds Introduction:
Currently, prediction market oracles still require improvements in many aspects of mechanism and user experience, including settlement time, incentive models, data continuity, and permissionless settlement. Prediction markets will bring new opportunities for oracle product and architectural innovation.
Article Source:
https://mp.weixin.qq.com/s/DGh8oPnaVrE3ugq3zasFFg
Article author:
IOSG Ventures
Viewpoint:
IOSG Ventures: Settlement can be categorized as centralized or decentralized. Most early prediction markets adopted centralized solutions. Decentralized solutions are costly and difficult to implement. However, to protect prediction markets from a single point of control and ensure their value as a true media source of truth, decentralized settlement solutions are necessary, which in turn relies on oracles. This bottleneck technology determines whether an on-chain prediction market can sustainably operate independently and support a large market. This is why BSC needs to first address the oracle issue if it wants to develop a prediction market project. Furthermore, oracles are also necessary to ensure that prediction market data generates value and circulates on-chain. Oracles can use prediction market results as a data source for on-chain use. The collaboration between Kalshi and Pyth focuses on this. Prediction market data serves as a primitive, enabling on-chain application developers to create new products. Pyth officials cite the development of futures markets based on real-world events. These protocols can use Kalshi's real-time odds as a baseline reference, automatically adjusting prices as the source market fluctuates. Understanding UMA's current monopoly can be measured by the TVS (TVS) in prediction markets. TVS (total value secured) measures the total value secured by oracles. Currently, Polymarket holds an 80% market share, with Chainlink providing the remaining 20% of the price market. In terms of its business model, Stable prioritizes market share expansion over revenue in the near term, leveraging gas-free USDT payments to acquire users and build payment traffic. Long-term profitability will primarily come from within its consumer applications, supplemented by select on-chain mechanisms. Beyond USDT, Stable also sees significant opportunities in other stablecoins. With PayPal Ventures' investment in Stable in late September 2025, as part of the transaction, Stable will natively support PayPal's stablecoin, PYUSD, and promote its distribution, enabling PayPal users to make payments directly with PYUSD, with gas fees also paid in PYUSD. This means that PYUSD will also be gas-free on the Stable chain—extending the operational simplicity of the USDT payment rail that has attracted PSPs to PYUSD. Polymarket currently uses UMA's Managed Optimistic Oracle V2 (MOOV2) to settle markets. When a market matures and needs to be settled, the market closes first, and the proposer submits the result. This result is considered correct if it is not challenged within the dispute window. If challenged, UMA's decentralized arbitration mechanism intervenes to render a verdict. The UMA optimistic oracle has gone through four versions, evolving from an initial focus on synthetic assets to adapting to prediction markets. Polymarket currently supports MOOV2 contracts. This change follows UMA's adoption of the UMIP-189 governance proposal on August 6th. Previously, a problem with MOOV2 was that many proposals were submitted prematurely and inexperienced, often leading to disputes and delaying market settlement for days. Risk Labs, the entity behind UMA, has released an initial whitelist of 37 addresses. The whitelist includes employees of Risk Labs and Polymarket, as well as users with more than 20 proposals and an accuracy rate exceeding 95%. This is the current prototype of UMA's meritocratic governance.
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