Oracle and Market Resolution

Written By neostake

Last updated 4 months ago

What is the Oracle?

The Oracle is Neostake’s community-based system that decides the result of every market. Instead of a central authority, eligible users vote after an event ends. This guarantees fairness, transparency, and decentralization.

Standard Resolution Flow

  1. Resolution date: When the scheduled resolution time arrives, voting opens.

  2. Voting: Users cast their vote for the outcome they believe is correct.

  3. Minimum Difference Rule

    • The leading outcome must win by at least 5% more votes than the runner-up.

    • If the difference is smaller, the market is canceled and all trades are refunded.

  4. Settlement

    • The winning outcome is set to 1.

    • All other outcomes are set to 0.

    • Users who backed the correct outcome are paid out based on their positions.

  5. No votes?

    • If no one votes before the deadline, the market is canceled and all trades are refunded.

“Not Yet Occurred” (Postpone Resolution)

Some events don’t happen on time or can’t yet be verified (e.g., an exam is postponed, or results aren’t published).
In this case, voters can select “Not Yet Occurred” (NYO) and propose a new resolution date.

If the majority agrees, the market is paused until that new date.

When does postponement trigger?

  • During the resolution window, users may select Not Yet Occurred instead of an outcome.

  • If ≥ 50% of votes are NYO, the market is postponed.

  • Why? Because the majority agrees it cannot be resolved fairly yet.

How is the new date chosen? (Median Rule)

  • All NYO voters must also propose a new resolution date.

  • Neostake takes the median of all submitted dates (not the average).

    • Example: one proposes May 1, another May 30 → median = May 15.

  • Rules:

    • The new date must be in the future (at least 24h later).

    • If a date is invalid (e.g., in the past), it is corrected automatically.

    • With fewer than 3 dates, the system takes the middle/closest valid date.

Market state during postponement

  • Paused/Inactive

    • Trading is disabled (no new buys or sells).

    • Prices are frozen; no fees accrue.

    • Your positions remain visible and still count toward your Net Worth (based on their last valid value).

  • At the new resolution date, the market re-enters the resolution process.

Multiple postponements

  • If at the new date voters again select Not Yet Occurred ≥ 50%, the process repeats.

  • To prevent abuse:

    • Neostake may limit postponements (e.g., maximum 2 times).

    • Or require a higher threshold (e.g., 60%) for repeat postponements.

Voting Incentives (Why vote honestly?)

The Oracle rewards voters who align with the majority and penalizes those who do not:

  • Correct vote (matches majority) → positive multiplier on leaderboard score.

  • Incorrect vote (against majority) → negative multiplier (the penalty is stronger than the reward).

  • If you are unsure → it’s better not to vote.

This system makes it optimal to vote honestly, even if your personal trades would profit from a different outcome.

Resolution Summary

  • Market reaches resolution date → voting opens.

  • If an outcome wins by ≥ 5% margin → resolve to that outcome; settle payouts.

  • If Not Yet Occurred ≥ 50% → compute median new date, pause, reschedule.

  • If no margin, no clear NYO majority, or no votes → Cancel & Refund.

  • Voter multipliers apply:

    • Correct vote → reward

    • Incorrect vote → penalty (stronger)

In short: The Oracle ensures that every market is resolved fairly, even if an event is delayed. Users always have clarity: either an outcome is resolved, postponed, or refunded.