Resolved

#Market State Progression

Unopened → Open → Closed → Settled/Resolved

#Definition

Resolved is the market state where the official outcome has been determined and declared, but payouts have not yet been fully distributed. This is the transitional stage between a closed market (awaiting outcome) and a settled market (payouts complete).

#Position in Market Lifecycle

Created → Open → Closed → RESOLVED → Settled
                            ↑
                      You are here

#What "Resolved" Means

✅ Outcome officially determined ✅ Winner declared (YES or NO, or specific categorical outcome) ✅ Oracle/platform has made decision ⏳ Payouts being processed ⏳ May still have dispute window ❌ Cannot trade ❌ Payouts not yet in your account

#The Resolution Process

#Step 1: Data Collection

After market closes:

Platform/Oracle:
→ Consults resolution source
→ Verifies outcome
→ Cross-checks multiple sources (if specified)
→ Confirms no ambiguity

Example:

Market: "Will Bitcoin reach $100k in 2025?"
Close: Dec 31, 2025 23:59 UTC
Resolution source: Coinbase BTC/USD price feed

Jan 1, 2026:
→ Check Coinbase API for all timestamps in 2025
→ Find highest price: $98,450 (never reached $100k)
→ Outcome: NO
→ Market now RESOLVED to NO

#Step 2: Resolution Declaration

Platform announces outcome:

"Market resolved: NO"
"Resolution source: Coinbase BTC/USD"
"Winning shares will receive $1.00 each"
"Settlement processing..."

#Step 3: Dispute Window (Optional)

Some platforms allow challenges:

UMA Optimistic Oracle (Polymarket):

• 2-hour dispute period
• Anyone can dispute by staking collateral
• If disputed → Goes to token holder vote
• Incorrect side loses stake

Centralized platforms (Kalshi):

• Email appeals within 24-48 hours
• Platform staff reviews
• May re-resolve if error found

#Step 4: Settlement Processing

Once resolution is final:

Resolved → Settlement queue → Payouts distributed → Settled

#Duration of "Resolved" State

#Instant Settlement

Some platforms settle immediately upon resolution:

9:00 PM: Game ends, score confirmed → RESOLVED
9:01 PM: Payouts sent → SETTLED
Duration: 1 minute

Common for:

• Play-money platforms (Manifold)
• Simple, uncontroversial outcomes
• Automated settlement systems

#Standard Settlement

Most platforms have a processing delay:

10:00 AM: Outcome determined → RESOLVED
10:30 AM: Payouts distributed → SETTLED
Duration: 30 minutes

Common for:

• Regulated platforms (Kalshi)
• Real-money markets
• Verification needed

#Delayed Settlement

Some markets stay resolved for extended periods:

Monday: Outcome confirmed → RESOLVED
Wednesday: Payouts finally sent → SETTLED
Duration: 2 days

Reasons:

• High-value markets requiring extra verification
• Dispute period (24-48 hours)
• Weekend/holiday processing delays
• Technical issues

#What You Can Do While "Resolved"

#Allowed Actions

✅ View resolution outcome: See who won ✅ Calculate returns: Know your profit/loss ✅ File dispute: If you believe resolution is wrong (time-limited) ✅ Prepare for withdrawal: Plan what to do with winnings ✅ Trade other markets: Use other available capital

#Not Allowed Actions

❌ Trade this market: Still frozen ❌ Withdraw winnings yet: Not in your account yet ❌ Modify position: Too late ❌ Transfer shares: Market closed

#Platform-Specific Resolution

#Kalshi

Resolution authority: Platform staff Process:

1. Staff consult resolution source
2. Verify against contract rules
3. Click "Resolve" button
4. Outcome recorded
5. Settlement queue processes payouts

Dispute process:

• Email support@kalshi.com
• Include evidence
• 24-48 hour review
• May re-resolve if error found

#Polymarket

Resolution authority: UMA Optimistic Oracle Process:

1. Price requester asks for outcome
2. Data provider proposes answer
3. 2-hour liveness period (dispute window)
4. If no dispute → Resolution accepted
5. Smart contract settles

Dispute process:

• Stake dispute bond (typically ~$500)
• Triggers token holder vote
• Voting period (typically 48 hours)
• Correct side wins, wrong side slashed

#Manifold Markets

Resolution authority: Market creator Process:

1. Creator declares outcome
2. Instant resolution
3. Mana distributed immediately
4. Market settled (resolved and settled simultaneously)

Dispute process:

• Comment on market
• Community pressure
• Creator may re-resolve
• Affects creator reputation

#Resolution Methods

#Automatic Resolution

Smart contracts can auto-resolve for some markets:

// Example: Price threshold market
if (oraclePrice >= 100000) {
  resolve("YES");
} else if (currentTime > deadline) {
  resolve("NO");
}

Advantages:

• Fast, instant resolution
• No human bias
• 24/7 operation
• Cost-efficient

Limitations:

• Only for objective, API-accessible data
• Vulnerable to oracle manipulation
• Cannot handle nuance or edge cases

#Manual Resolution

Human review for complex markets:

When needed:

• Ambiguous outcomes
• Multiple interpretation possible
• Subjective elements
• Source conflicts

Process:

1. Staff/creator reviews evidence
2. Interprets rules
3. Makes judgment call
4. Documents reasoning
5. Declares resolution

#Hybrid Resolution

Combination approach:

1. Oracle proposes resolution (automated)
2. Dispute window allows human challenge
3. If disputed → Manual review
4. Final resolution based on review

Benefits:

• Speed of automation
• Safety of human oversight
• Efficient for most cases
• Review only when needed

#Resolution and Probability

The resolved outcome provides data on market accuracy:

#Well-Calibrated Market

Market: "Will Biden win Pennsylvania?"
Closed at: 72¢ YES
Resolved: YES (Biden won)

Analysis: Market was confident and correct
→ 72% implied probability, outcome was YES
→ Over many markets, 72% confidence should win ~72% of time

#Mispriced Market

Market: "Will asteroid hit Earth?"
Closed at: 35¢ YES (35% probability)
Resolved: NO (no impact)

Analysis: Market overestimated risk
→ True probability was much lower (<1%)
→ NO at 65¢ was underpriced (should have been >99¢)
→ Opportunity for informed traders

#Resolution Errors

#Incorrect Resolution

Rare but possible:

Example:

Market: "Will Fed raise rates?"
Correct outcome: NO (rates held steady)
Resolved to: YES (error)

Problem:
→ Someone misread the Fed statement
→ Or consulted wrong source
→ Or interpreted ambiguous language incorrectly

What happens:

1. Users dispute
2. Platform investigates
3. Reviews resolution rules
4. If error confirmed: Re-resolves to correct outcome
5. Reverses settlements (debits/credits accounts)

#Ambiguous Outcome

Sometimes the real-world outcome is genuinely unclear:

Example:

Market: "Will Bitcoin reach $100k?"
Scenario: Flash spike to $100,001 for 2 seconds on one exchange, but not others

Question: Did it "reach" $100k?
→ Depends on resolution rules
→ "Coinbase only" vs. "any exchange"
→ "Sustained 5 minutes" vs. "any timestamp"
→ Rules must specify

Resolution options:

• Resolve YES (technically hit target)
• Resolve NO (not sustained/only one exchange)
• Void market (outcome ambiguous, refund all)

#Source Unavailable

What if resolution source doesn't exist?

Example:

Market: "What will CPI be?"
Expected: BLS releases data Jan 15
Problem: Government shutdown, no data released

Options:
→ Wait for delayed release
→ Use backup source (if specified in rules)
→ Void market after reasonable time
→ Platform makes best judgment

#Best Practices

#For Platforms

✅ Clear communication: Announce resolution immediately ✅ Show reasoning: Explain how outcome was determined ✅ Display source: Link to resolution source ✅ Allow disputes: Provide challenge mechanism ✅ Fast settlement: Process payouts quickly after resolution ✅ Document process: Keep records for audits

#For Traders

✅ Verify resolution: Check it matches the rules ✅ Review source: Confirm outcome is correct ✅ Dispute quickly: Challenge windows are time-limited ✅ Be patient: Settlement processing takes time ✅ Track performance: Record your accuracy vs. market price

#Resolution vs. Settlement

Key distinction:

Resolved = "We know who won" Settled = "Winners have been paid"

Timeline:
3:00 PM: Outcome determined → RESOLVED
3:30 PM: Payouts sent → SETTLED

Between 3:00-3:30: Market is RESOLVED but not SETTLED

Many users use these terms interchangeably, but they represent distinct stages.

#Why Resolution Matters

Resolution is the moment of truth for prediction markets:

✅ Accuracy revealed: Did the market price reflect true probability? ✅ Winners determined: Who gets paid? ✅ Platform reputation: Fair resolution builds trust ✅ Information value: Correct resolution validates information aggregation ✅ Trader learning: Feedback for calibration

Poor resolution: ❌ Erodes trust ❌ Drives away users ❌ Invites manipulation ❌ Reduces market quality ❌ Regulatory scrutiny

Fair, accurate, and timely resolution is essential for prediction market success.