Polymarket partners with UMA Protocol to create Oracle for betting verification
UMA Protocol, EigenLayer, and Polymarket Develop AI-Powered Oracle for Bet Resolution
UMA Protocol has announced it is developing a real-world event oracle in partnership with EigenLayer and Polymarket, aiming to resolve bet outcomes with undeniable on-chain evidence.
The initiative comes as Polymarket, which reached peak volumes of over $75 million and sees up to 337K new accounts per month, struggles with markets that fail to close despite one-sided token outcomes.
Key Takeaways
- Innovative Oracle Development: UMA Protocol, EigenLayer, and Polymarket are collaborating to build a real-world event oracle that uses re-staking liquidity and the EIGEN token, addressing unresolved bet closures.
- Natural Language and AI Integration: The oracle will analyze natural language to assess events and handle edge cases, potentially training AI agents for verifiable data.
- Expanding Market Coverage: UMA Protocol, already securing $109.55 million on Polymarket (with peaks above $455 million during the 2024 elections), aims to expand its coverage via community voting and advanced dispute resolution.
- Shifting Bet Dynamics: Polymarket is transitioning to smaller bets from a broader user base, with complex markets including cultural events and political scenarios driving volumes up to $10 million.
Innovative Oracle for Bet Resolution
Polymarket has long faced challenges with bets that fail to close even when one outcome reaches 100% due to unresolved event proofs. UMA Protocol’s new oracle, developed alongside EigenLayer, will leverage the re-staking protocol’s liquidity and the EIGEN token.
Loading...
This system will track natural events and opinion markets by parsing natural language and, when needed, deploy AI agents to handle ambiguous cases. The process is designed to be transparent and community-engaged, with UMA Protocol already incentivizing market participants through its UMA token.
Market Impact and Evolving Dynamics
While Polymarket has traditionally focused on sports and straightforward political issues, the platform is now embracing diverse markets—from a 33% chance for Kanye West to launch a token to predicting a Bitcoin reserve by the end of Trump’s first 100 days.
"Will Trump create Bitcoin reserve in first 100 days" chances chart. Source: Polymarket.
Despite overall trading volumes dipping to a baseline of $31 million on slower days, peak volumes have hit over $75 million, driven by more than 70K daily users.
Conclusion & Outlook
The collaboration among UMA Protocol, EigenLayer, and Polymarket signals a transformative step for prediction markets. By integrating AI-driven natural language analysis and community voting, the new oracle is set to enhance market efficiency and trust. As Polymarket shifts toward smaller, more diverse bets, this initiative could pave the way for broader adoption and higher liquidity in the crypto prediction space.
Recently we wrote, that Polymarket, a popular crypto-based prediction platform, is facing criticism from its users following the contentious resolution of a high-stakes market titled “TikTok banned in the US before May 2025?”
