What is Precedent?

Precedent refers to the use of past resolutions as references for resolving new disputes. When a proposal is disputed, UMA stakeholders may look at how similar cases were resolved in the past. This helps keep resolutions consistent and predictable.

Precedent is generally not established by a single resolution. Instead, it develops when multiple proposals follow a consistent pattern. When discussing a dispute, stakeholders may also consider how a decision could affect existing precedents or create new ones.

UMA community members typically treat established precedent as strong evidence, with Polymarket clarifications generally taking priority. For example, in P4 cases, if precedent requires waiting for the next data point, evidence supporting a P1 or P2 outcome may not be enough to override that precedent.

However, whether a precedent applies can itself be disputed. Stakeholders may disagree over whether a past resolution actually established a precedent, whether that precedent is still valid or relevant, whether the situations are sufficiently similar, or whether the original resolutions were correct.

Precedents are also market-specific. A precedent established for one type of market, such as the NBA, may not apply to another, such as F1.

Guiding Principles

• Precedent generally develops through repeated, consistent resolutions rather than a single case.

• Precedents apply only within their relevant market context.

• Precedents may be overturned if the underlying resolutions are found to be incorrect.