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market-resolution-process

How Markets Are Resolved

📅 Dec 27, 2025✍️ Poly Team⏱ 10 min read

Understanding how prediction markets are resolved is crucial for avoiding disputes and knowing when you'll get paid. Let's walk through the entire process.

What Is Market Resolution?

Resolution is the process of determining the outcome of a prediction market and distributing payouts to winning traders. Once a market resolves, "Yes" shares either become worth $1.00 (if the event occurred) or $0.00 (if it didn't).

Who Decides the Outcome?

Different platforms use different resolution mechanisms:

Centralized Resolution

On platforms like Kalshi, the platform itself resolves markets based on predetermined criteria and trusted data sources. They typically use official sources like government agencies, major news outlets, or specific data providers.

Decentralized Resolution

Some platforms use decentralized oracle systems where multiple parties vote on the outcome. This can be more resistant to manipulation but may take longer and occasionally lead to disputes.

Always Read the Resolution Criteria

Before trading, carefully read how the market will be resolved. The exact wording matters. "Will X happen in 2025?" is different from "Will X happen by December 31, 2025, 11:59 PM EST?"

The Resolution Timeline

Markets typically follow this timeline:

  1. Event Occurs (or Deadline Passes): The real-world event happens or the market's deadline is reached.
  2. Verification Period: The platform verifies the outcome using specified sources (usually 24-72 hours).
  3. Resolution: The market is officially resolved, and shares are converted to their final value.
  4. Payout: Winning shares are paid out (usually immediately or within 24 hours).

What Happens in Disputes?

Sometimes the outcome isn't clear-cut. Maybe the resolution criteria were ambiguous, or there's conflicting information from different sources. Here's what typically happens:

Review Period

Most platforms have a dispute or review period where traders can challenge the resolution. You'll need to provide evidence supporting your position.

Platform Decision

The platform reviews the evidence and makes a final determination. On centralized platforms, this decision is usually final. On decentralized platforms, there may be additional voting rounds.

Invalid/Ambiguous Markets

In rare cases where the outcome is truly ambiguous or the event didn't occur as specified, markets may be resolved as "invalid" or "ambiguous." In these cases, all traders typically get their money back regardless of which side they took.

Tips for Avoiding Resolution Issues

  • Only trade markets with clear, objective resolution criteria
  • Avoid markets that depend on subjective judgments
  • Check what sources will be used for resolution
  • Be wary of markets with distant resolution dates—criteria can become outdated