Oracle
An external data source that provides real-world information to smart contracts, used by prediction markets to determine resolution outcomes.
Definition
An oracle is a trusted data feed that bridges off-chain real-world information to on-chain smart contracts. In prediction markets, oracles determine which outcome wins at resolution. Oracles must be tamper-resistant and aggregated across multiple sources to prevent manipulation. Polymarket uses Chainlink RTDS for short-duration crypto markets and the UMA optimistic oracle for longer-horizon events.
In practice
For 5-minute BTC binary markets, the Chainlink RTDS oracle publishes a signed price tick at the market end time. The Polymarket resolver reads this tick and sets the winning outcome accordingly. Predtools bots never trust Binance's price alone to determine win/loss — they poll resolveViaGamma() until the Gamma API confirms a winning outcome token above $0.99, which reflects the on-chain oracle result. This is critical: Binance and Chainlink prices can diverge by several dollars in fast markets.