Resolution

Resolution is the critical final step in any prediction market trade. When the event a contract is tied to concludes — an election is decided, a game is played, a regulatory announcement is made — the platform determines the outcome and pays out winning shares accordingly. Winning shares typically pay $1.00 each, while losing shares expire at $0.

Most reputable platforms use one or more independent data sources to verify outcomes. Polymarket has historically used UMA Protocol's optimistic oracle system, where proposed resolutions can be challenged and arbitrated on-chain. Kalshi as a CFTC-regulated exchange uses its own internal resolution processes with defined sourcing rules.

Resolution disputes can arise when events have ambiguous outcomes or when source data conflicts. For example, a contract on "unemployment rate below 4%" may need to specify whether it uses the initial release or the revised figure. Traders should always read the resolution criteria before entering a position, as markets have occasionally resolved in unexpected ways due to technical interpretation of the contract terms.