RESOLUTION SOURCES & DISPUTES
A prediction market is only as good as how it resolves. Read the resolution criteria before you click — many traders learn the hard way that 'when did the war end?' or 'is this a recession?' have no clean answer.
Every market should specify exactly what data source determines the outcome and exactly when it's checked. A clean example: 'Will the Fed raise rates at the March meeting?' resolves YES if the Fed funds target range is raised, NO otherwise, decided at the close of the FOMC announcement. Unambiguous.
A messy example: 'Will there be a US recession in 2025?' Whose definition? Two consecutive quarters of negative GDP? The NBER's official call (which often comes a year late)? The market's resolution criteria must specify, and most ambiguous markets resolve via committee or by reverting to the platform's dispute process.
Polymarket and Kalshi have different dispute procedures. Polymarket uses UMA's optimistic oracle — proposers post a bond, anyone can dispute, disputes go to a token-holder vote. Kalshi resolves through its CFTC-registered process with explicit rulebooks. Neither is perfect; both have had high-profile contested resolutions.
Practical rules: avoid markets with vague criteria. Avoid markets resolving on subjective sources (like 'mainstream media reports'). Always read the resolution section in full before sizing up — and if you wouldn't bet your house on the resolution being clear, size as if you might lose to a contested outcome.
Takeaways
- →Resolution criteria are the contract — read them like one.
- →'Recession,' 'war,' 'crisis,' and 'mainstream' are all words that cause disputes.
- →Different platforms have different dispute mechanisms — know yours.
- →If criteria are unclear, the price discount won't compensate for the resolution risk.