Prediction markets settle on facts, not just prices — which calls for a different kind of oracle.
A price feed can tell you ETH/USD, but it can’t tell you who won an election. Prediction markets need an oracle that resolves arbitrary, sometimes subjective claims.
The standard: UMA’s optimistic oracle proposes an outcome, allows a dispute window, and only escalates to a token-holder vote if challenged. It settles Polymarket.
Increasingly used alongside optimistic settlement to reduce risk on price-based markets.
First-party price data for markets that resolve on a measurable price at a deadline.
For arbitrary-outcome markets, UMA is the default; layer a price oracle (Chainlink or Pyth) when the question reduces to a number.