Who decides how a prediction market resolves

A prediction market resolves when an exchange or its designated oracle confirms the outcome against a source named in the market's rules, paying $1 or $0 for each contract.¹²

Whether a trade pays out depends on who holds resolving power and what information sources they are required to check.³ Kalshi and Polymarket use two distinct models to answer that question.⁴⁵

Where is a prediction market's resolution source written?

A market's resolution source is written directly in its contract rules before trading opens, and rules can specify a single source or several acceptable outlets.⁶⁷⁸ Polymarket states in its help center: "The rules specify the resolution source, the market end date, and they outline how the market should resolve in various edge-cases".⁹

On Kalshi, each market lists its settlement sources in its rules; for example, a market on a presidential address named 14 acceptable outlets, including the Associated Press, Reuters, CNN and The Wall Street Journal.¹⁰

Exchanges establish these sources before any trades occur.¹¹ Kalshi's help center notes that markets rely on a "source agency" such as official league statistics, government releases, or other event authorities to publish finalized results.¹² If none of the sources listed in the rules report the outcome, the contract does not count it.¹³

How does Kalshi decide the outcome?

Kalshi resolves outcomes through internal staff checks and a board review committee.

1. Market close: Trading ends at the scheduled time, or immediately when an outcome occurs.¹⁴
2. Staff verify against source agencies: Most markets settle within a few hours after the outcome is known, often within about three hours.¹⁵ Each contract contains a predefined settlement timer specifying when payouts finalize after a determination is reached.¹⁶
3. Outcome Review Committee evaluation: Kalshi can route the market to a three-member committee (including at least two public directors) that must issue a final decision within 24 hours.¹⁷

Further, if contract rules cannot determine an outcome, Kalshi may settle the market at the last traded price or defer the ruling to the committee (Rule 6.3(c)).¹⁸ If a designated source agency stops publishing or undergoes significant changes, Kalshi reserves the right to designate a substitute source (Rule 7.2).¹⁹

How does Polymarket decide the outcome?

Polymarket's international platform settles outcomes through a decentralized proposal and dispute system powered by the UMA Optimistic Oracle.

1. Proposal: A whitelisted address submits the proposed outcome along with a collateral bond.²⁰²¹ The initial whitelist of 37 addresses included Risk Labs and Polymarket employees.²²
2. Challenge window: A two-hour window opens upon proposal submission. Any market participant can challenge the proposed outcome during this window by posting a matching bond. Undisputed proposals finalize automatically when the window closes.²³²⁴
3. Debate and vote: If a proposal is disputed twice, the issue escalates to UMA token holders, who vote to select the winning outcome.²⁵²⁶²⁷ Disputed resolutions typically take four to six days to fully resolve.²⁸

Polymarket US, the CFTC-regulated exchange, operates differently. Rather than using decentralized oracle votes, Polymarket US functions like Kalshi, relying on centralized internal authority to review outcomes under its own rulebook, where determinations made by the exchange are final.²⁹

Can a resolution be reversed?

Resolutions generally cannot be reversed once an exchange or oracle finalizes the outcome.³⁰³¹ Polymarket notes in its help documentation: "Polymarket is non-custodial and cannot alter or reverse market resolutions. Once finalized by UMA, outcomes are immutable".³² Following the contested $7 million Ukraine minerals market, Polymarket declined user requests for refunds: "because this wasn't a market failure, we are not able to issue refunds".³³

Exchanges operating under US jurisdiction rely on formal legal frameworks rather than blockchain immutability.³⁴³⁵ On Kalshi, the Outcome Review Committee's determinations are final.³⁶ A participant can elect to take a claim against another participant arising from a Kalshi contract to arbitration under Chapter 10 of its DCM rulebook.³⁷

Similarly, participant disputes on Polymarket US proceed to binding arbitration in New York under Chapter 9 of its rulebook.³⁸ A market's rules and resolution sources are set before trading starts.³⁹⁴⁰