Optimistic Oracle

UMA’s Optimistic Oracle allows contracts to quickly request and receive various types of data. The Optimistic Oracle acts as a generalized escalation game between contracts that initiate a request and UMA’s dispute resolution system known as the Data Verification Mechanism (DVM).

Data proposed by the Optimistic Oracle will not be sent to the DVM unless it is disputed. This enables contracts to obtain information within any predefined length of time without the need to have the data recorded on-chain.

Who is it for?

DeFi projects whose users demand the highest level of financial security and recourse against exploits and errors.

Prediction markets, option platforms, and other market types that require precise information

dApps which require accurate data for long-tail assets

How is it better?

Resolves requests accurately and quickly for various types of data (e.g., price information, outcomes of real-world events, long-tail assets, performance outcomes)

Constructed with a priceless contract design to minimize reliance on oracles, making contracts on UMA more secure, gas efficient and less prone to manipulation

Leverages UMA’s Data Verification Mechanism (DVM) as a backstop to resolve disputes; any attempt to manipulate the oracle triggers a dispute

Backed by economic guarantees around the cost of corrupting the DVM to ensure it will cost more to corrupt the oracle (i.e., obtain 51% or more UMA tokens) than the amount someone could profit from corrupting the oracle (i.e. stealing funds within contracts on UMA).

For L2 solutions, a cross-chain bridge can ensure efficient settlement and security for L2 products.

Examples

A prediction market creates bespoke markets based on real-world information and uses the OO to resolve its markets.

A developer creates a financial product based on real-world data such as stock prices and benefits from the OO’s design that does not require a secured price feed.

An insurance provider wants to offer insurance on a space launch and uses the OO to report the outcome of the launch.

How do I get started?