Oracle Resolution

How Prophet’s AI oracle resolves markets using 0G Compute — the full lifecycle from deadline to payout.

The Resolution Problem

Every prediction market must answer one question at deadline: did the event happen or not? The quality of this answer determines whether the market produced a useful signal or a worthless one.

Prophet delegates resolution to an AI oracle agent that runs on 0G Compute — a decentralized GPU inference network. The oracle uses DeepSeek V3 (testnet: Qwen 2.5 7B) to reason about the outcome, writes its full chain-of-thought to 0G Storage, and posts only the verdict on-chain. Anyone can verify the reasoning independently.

---

Market Lifecycle

Open
  │
  │ (deadline passes, anyone calls triggerResolution)
  ▼
PendingResolution
  │
  │ (oracle agent runs inference, calls postResolution)
  ▼
Challenged
  │                │
  │ (no challenge  │ (someone files challenge within 24h)
  │  window closes)│
  ▼                ▼
finalizeResolution  Second inference
       │                 │
       ▼                 ▼
    Resolved          Resolved
       │
       │ (oracle calls revealPositions)
       ▼
   Payouts Distributed

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Step 1: Open → PendingResolution

When a market’s deadline timestamp passes, the market is eligible for resolution. Any address (not just the oracle) can call:

function triggerResolution() external;

This emits a ResolutionTriggered event and sets the market status to PendingResolution. This open-trigger design ensures markets resolve even if the oracle is temporarily offline — anyone can initiate the process.

The oracle agent listens for ResolutionTriggered events. It also runs a periodic scan every 5 minutes to catch any expired markets it may have missed.

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Step 2: Oracle Agent Runs Inference

When the oracle receives a resolution trigger, it executes the following sequence:

1. Read metadata from 0G Storage

   The oracle fetches the market’s metadata (question, resolution criteria, approved sources, deadline) from 0G Storage using the root hash stored in the market contract.

2. Call 0G Compute (inference)

   The oracle calls the 0G Compute endpoint with a structured prompt. It uses the @0glabs/0g-serving-broker SDK to get the provider’s endpoint, verify TEE attestation, and send the inference request.

   const prompt = `
   Market Question: "${question}"
   Resolution Deadline: ${deadline}
   Resolution Criteria: The question resolves YES if the described event occurred before the deadline.
   
   Approved data sources to check:
   ${sources.join('\n')}
   
   Today's date: ${new Date().toISOString()}
   
   Respond with this exact JSON structure:
   {
     "verdict": true or false,
     "confidence": 0-100,
     "reasoning": "Full explanation of your decision",
     "evidenceSummary": "Brief summary of evidence found",
     "sourcesChecked": ["source1", "source2"],
     "inconclusiveReason": "Only if verdict is INCONCLUSIVE"
   }
   
   If you cannot determine the outcome with >70% confidence, set verdict to null.
   `;
   
3. Check confidence threshold

   If the model returns confidence below 70%, the oracle marks the result as inconclusive and may extend the resolution window or trigger a second inference pass. A market is never resolved on a low-confidence reading.

4. Write reasoning to 0G Storage

   Before posting anything on-chain, the oracle uploads the full reasoning object to 0G Storage:

   {
     "verdict": true,
     "confidence": 88,
     "reasoning": "Arsenal clinched the Premier League title on May 11, 2026...",
     "evidenceSummary": "Multiple primary sources confirm Arsenal's title win.",
     "sourcesChecked": ["BBC Sport", "Premier League official site", "ESPN"],
     "timestamp": "2026-05-12T14:23:00Z"
   }
   

   The upload returns a root hash (e.g., 0xabc123...).

5. Post verdict on-chain

   The oracle calls postResolution(verdict, reasoningHash) where reasoningHash is the 0G Storage root hash. This permanently links the on-chain verdict to the off-chain reasoning.

   function postResolution(bool verdict, bytes32 reasoningHash) external onlyOracle;
   

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Step 3: The Challenge Window (Challenged Status)

After postResolution is called, the market enters Challenged status with a 24-hour challenge window. During this window:

• The market is not yet finalized — no payouts distributed, no positions revealed
• Anyone can file a challenge by calling fileChallenge() and posting a bond
• If no challenge is filed, the window expires and the verdict is accepted

The challenge window is a safety valve. It allows the community to flag a clearly incorrect oracle verdict before it becomes permanent.

Filing a Challenge

function fileChallenge() external payable;

Requirements:

• Bond must be at least 5% of the total pool or 50 USDT minimum (whichever is larger)
• Only one challenge per market
• Bond is returned if the challenge is upheld, forfeited if the oracle’s original verdict is confirmed

When a challenge is filed, the contract records the challenger’s address. The oracle agent detects this via the ResolutionChallenged event.

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Step 4a: No Challenge → finalizeResolution

If the 24-hour window expires with no challenger (contract’s challenger field remains the zero address), anyone can call:

function finalizeResolution() external;

This sets the market status to Resolved and emits ResolutionFinalized. The oracle agent listens for this event and proceeds to reveal positions and distribute payouts.

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Step 4b: Challenge Filed → Second Inference

If a challenge is filed, the oracle agent runs a second, independent inference pass — potentially with additional context or a different prompt structure. The result of the second inference determines the final verdict:

• If the second inference confirms the original verdict: challenge is rejected, challenger’s bond is forfeited to the protocol
• If the second inference overturns the original verdict: challenge is upheld, challenger receives their bond back plus a portion of the forfeited oracle fee

After the challenge is resolved, finalizeResolution is called and the market moves to Resolved.

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Step 5: Position Reveal and Payout

After ResolutionFinalized is emitted, the oracle agent calls:

function revealPositions(
    address[] calldata traders,
    bool[] calldata isYes,
    uint256[] calldata amounts,
    bytes[] calldata signatures
) external onlyOracle;

This decrypts the sealed positions (the oracle holds the decryption key) and records each trader’s actual position. After reveal, traders can call redeemWinningShares() on MarketContract to collect their payout.

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Why Reasoning Is Stored on 0G Storage

The reasoning hash in the contract is not just a convenience — it is a commitment to accountability.

• Permanent: 0G Storage Log layer is immutable. The reasoning cannot be deleted or altered.
• Verifiable: Anyone with the root hash can download the exact JSON the oracle submitted.
• Tamper-proof: The hash stored on-chain must match the content in 0G Storage. If they disagree, the resolution is fraudulent — detectable by anyone.
• Complete: The full reasoning, not a summary, is stored. Every source the model considered, every piece of evidence, every confidence estimate.

This creates an oracle track record that any user can audit. Over time, this record is the oracle’s reputation — markets where the oracle performed poorly are visible to everyone.

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Confidence Threshold

The oracle will not post a verdict if its confidence is below 70%. In these cases:

1. The market may extend its resolution window if the contract supports it
2. The oracle logs the inconclusive result to 0G Storage
3. A second inference pass is triggered with a longer reasoning budget

Markets that are genuinely unresolvable (e.g., the question turned out to be ambiguous) can be cancelled via cancelMarket(), which enables redeemCancelledShares() for all participants.

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Oracle Prompt Design

The oracle uses a fixed system prompt and a structured user prompt. Temperature is set to 0.1 for deterministic, consistent reasoning. The model is instructed to respond only in valid JSON — no preamble, no markdown.

System: You are a decentralized prediction market oracle. Your job is to determine the 
outcome of prediction markets based on evidence. You must be objective, cite your sources, 
and provide a confidence score. Respond ONLY in valid JSON.

User: Market Question: "..."
      Resolution Criteria: The question resolves YES if the described event occurred...
      Approved data sources: [...]
      Today's date: ...
      
      Respond with: { verdict, confidence, reasoning, evidenceSummary, sourcesChecked }

The structured format ensures the oracle response can be parsed programmatically and stored consistently across all markets.

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Challenge Economics

The challenge bond mechanism is designed to align incentives:

Scenario	Challenger outcome	Oracle outcome
Challenge filed, original verdict confirmed	Bond forfeited	Reputation maintained, fee kept
Challenge filed, original verdict overturned	Bond returned + bonus	Reputation damaged, fee forfeited
No challenge filed	N/A	Verdict finalized normally

The bond requirement (5% of pool or 50 USDT minimum) ensures that challenges are only filed by participants with genuine conviction — random challenges are economically irrational.