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Polymarket + UMA
Overview
Polymarket supports UMA as a resolution source for markets displayed on the Polymarket.com interface. Polymarket, at its core, is oracle agonistic, but the UMA integration provides another option for market creators.
The Polymarket-UMA adaptor is deployed on the Polygon network at the following address:
And the code for this adaptor has been open-sourced in the following repository:
What is UMA?
UMA is an optimistic oracle (OO) that uses economic guarantees to secure markets. Unlike mechanically restrictive price feed oracles, an optimistic oracle is able to serve any arbitrary data on-chain. UMA’s flexible oracle serves data for uses including a cross-chain bridge, insurance, and custom derivatives.
For markets secured by UMA’s optimistic oracle, UMA token holders are an impartial arbiter of the outcomes of relevant markets. These markets can proceed with an entirely decentralized and trustless resolution mechanism.
How does the Polymarket, UMA integration Work?
Underlying each market displayed on the Polymarket.com interface is a condition, prepared using the Gnosis conditional token framework (CTF). Per Gnosis’s documentation, “a condition is a question to be answered in the future by a specific oracle in a particular manner.” Thus, to prepare a market resolved by UMA’s optimistic oracle, what’s needed is a contract, marrying the two systems, that can be referenced as the market’s oracle. Specifically this means that the contract must be able to report the payout of a question answered by UMA. To do this, a condition and corresponding ancillary data need to be associated, the request flow required by the optimistic oracle must happen, and at the point of resolution, some data translation must happen to take the price proposed by UMA’s OO and propose it in the correct format to the CTF for the specific questionID. The UMA binary contract adapter does exactly this.
The binary adapter can be used by anyone to prepare a binary condition via the CTF that will be resolved by UMA. It is worth noting the possibility of invalid or unknown outcomes in UMA-resolved markets, which are configured to resolve 50/50. For traders using well-written markets, this will happen very infrequently.
Last modified 3mo ago
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