Resolution Criteria
The fine print that decides who wins.
#Plain-English Definition
Resolution Criteria are the exact rules written in a market's description that define what counts as a "Yes" and what counts as a "No".
It's not enough to ask "Will the Knicks win?". The criteria must specify:
- Does overtime count?
- What if the game is postponed?
- Which official source determines the score (e.g., NBA.com)?
#Why It Matters
Ambiguity is the enemy of prediction markets. If the criteria are vague, traders won't participate because they can't accurately price the risk.
Example of Bad Criteria: "Will Bitcoin go up?" (Up from when? By how much? On which exchange?) Example of Good Criteria: "Will the price of Bitcoin (BTC) on Coinbase Pro exceed $100,000.00 at 12:00 PM UTC on December 31, 2024?"
#The "Source of Truth"
Every market lists a Resolution Source. This could be:
- A URL: (e.g., "The New York Times homepage").
- A Data Feed: (e.g., "The National Weather Service API").
- An Oracle: (e.g., "UMA Optimistic Oracle").
#Key Takeaways
- Always read the resolution criteria before you trade.
- Small details (dates, time zones, specific data sources) can change the outcome.
- Disputes usually happen when criteria fail to account for edge cases.