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Settlement is the most important moment in any prediction market. It is also the moment most products quietly compromise on decentralization. Prediction Arena does not.

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The principle

Every round settles against a price that has been cryptographically signed by an independent, first-party oracle network. That signature is verified by the Prediction Arena smart contract before any payout occurs. If the signature is missing, malformed, expired, or produced by a key not in the oracle’s authorized guardian set, the contract refuses to settle. There is no manual override. There is no admin bypass. There is no “in case of emergency, set price manually” function.

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Who provides the price

Prediction Arena uses Pyth Network, a first-party oracle published by the same exchanges, market makers, and trading firms that originate the prices in the first place. This is fundamentally different from “scraper” oracles that pull numbers off public APIs and re-publish them — Pyth’s publishers sign the prices they themselves are quoting in their own venues, and the network aggregates and re-signs them. This matters because the security of the price is not “we trust Prediction Arena.” It is not even “we trust Pyth.” It is “we trust the same publishers that the rest of the trading industry already trusts to produce real prices, because they are signing those prices with the same key infrastructure they use for their own businesses.”

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What our role actually is

Our role in settlement is a liveness role only. We carry signed price bytes from the oracle network to the smart contract and pay the gas to do so. That is it. We cannot:
  • Substitute a different price.
  • Forge a signature.
  • Settle a round at a timestamp the oracle did not sign.
  • Settle when the oracle’s reported confidence is outside the per-market safety threshold.
  • Change which oracle the contract trusts.
If our entire team disappeared tomorrow, anyone — anyone in the world — could carry the same signed bytes to the same contract and settle the same round. Settlement does not depend on us.

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The confidence gate

Every signed price from Pyth comes with a confidence interval — essentially, how tight the publishers’ agreement on the price is at that moment. During liquid hours on liquid assets, this interval is razor-thin. During holiday weekends on metals, or during a major exchange outage, it widens. Each Prediction Arena market has a per-asset maximum confidence threshold. If the oracle’s confidence interval exceeds that threshold at the round-end timestamp, the contract refuses to settle and the round is automatically delayed until a clean reading is available. Players’ funds remain locked in the contract — they are not at risk — and the round resolves as soon as the oracle returns to normal. This is the opposite of how most platforms behave. Most platforms settle on whatever the screen says, then handle disputes in support tickets. Prediction Arena refuses to settle on bad data in the first place.