How Do Markets Resolve?

Markets resolve when someone proposes an outcome that satisfies the market's resolution criteria. If the event occurs, the market resolves Yes; if it doesn't happen by the deadline, it resolves No. In disputed or unclear cases, resolution may involve community discussion and a vote.

The Resolution Process

Polymarket uses UMA, a decentralized oracle, to resolve markets through the following process:

1. Proposal: A user submits an answer and stakes a bond (usually $750).

2. Challenge Window (2 hours): Anyone can challenge the proposal during this period.

3. If Not Challenged:

   • The proposal is automatically accepted.

   • The proposer receives their bond plus a reward (usually $5).

   • Accepted proposals cannot be challenged later.

4. If Challenged:

   • The challenger stakes the same bond amount (usually $750).

   • A community discussion begins around the disputed proposal.

   • In the next voting cycle (starts within 0–48 hours), UMA token holders vote on the correct outcome.

   • The winning side receives a portion of the losing bond and any reward.

Bond and Reward: Most market proposals require a $750 bond with a $5 reward. Higher-volume markets may require more.

Resolution: The losing bond is split between the winning side and the UMA Foundation. For $750 disputes, the winning side receives $250 of the loser's bond.

Let's take a look at a successful and disputed proposal.

Successful Proposal

Market: Will the US confirm that aliens exist in 2025?

1. Proposal: Akira believes the event has happened and proposes Yes, staking a $750 bond.

2. Challenge Window: No one challenges Akira's proposal within 2 hours.

3. Result: Akira's proposal is automatically accepted. He receives $755 (bond + $5 reward), and the market resolves Yes.

Disputed Proposal

Market: Will the US confirm that aliens exist in 2025?

1. Proposal: Akira proposes Yes, staking $750.

2. Challenge: Sakura believes the answer is wrong and, within the 2-hour challenge period, disputes it by staking $750.

3. Discussion & Vote: A community discussion is created, and UMA stakers vote on the outcome in the next voting cycle.

4. Outcome: The vote sides with Sakura. Sakura receives $1,000 (her $750 bond + $250 of Akira's bond). Akira loses his bond. The market resolves No.

What's Next

Now that you've learned how markets resolve, let's explore what happens when proposals are disputed.