Decentralized Validation Mechanics for ROI & Polls Prediction Markets

Introduction

In the realm of ROI & Initial Listing Prediction Markets and Polls Prediction Markets — Validation is crucial in ensuring the accuracy and fairness of prediction outcomes. Decentralized Validation introduces a community-driven approach where eligible users actively verify results, increasing transparency and trust within the platform.

Overview of Validation in Prediction Markets

Validation is the process by which the correctness of prediction outcomes is confirmed. Traditionally, outcome determination relied on centralized methods, which could lead to discrepancies and a lack of trust among participants. By decentralizing this process, Oriole Insights empowers its community to have a direct hand in validating outcomes and promoting fairness and accuracy.

Importance of Decentralized Validation

1) Increasing Transparency and Fairness

2) Improving Decision Accuracy

3) Community Engagement and Trust

Requirements and Eligibility Criteria for Validators

For each prediction market, there are specific requirements that users must meet to become Validators. These requirements ensure that only qualified and impartial individuals participate in the validation process, maintaining the integrity of the outcomes.

Validators must have certain Levels (Level 2, Level 3, etc.) or belong to specific User Types (Expert, Analyst, etc.). These criteria are defined in advance for each market and clearly stated in its Validation requirements, making them visible to all users.

Note: users who have participated in predicting the outcome of a market cannot be Validators for that same market. This measure prevents any conflict of interest, ensuring that Validators remain unbiased.

Validators' Reward Pool

A dedicated Validators' Reward Pool is established for each market to incentivize and reward Validators for their contributions. The size of this reward pool is determined in advance and may vary from market to market. Oriole Insights funds it and is separate from the rewards distributed to successful predictors.

Rewards from the Validators' Pool are distributed among Validators based on their Reputation and participation in the validation process. Both Validators who Agree and those who Disagree with the proposed outcome are eligible for rewards, promoting honest and thoughtful assessments. This approach encourages Validators to make decisions based on evidence rather than aligning with the majority for the sake of rewards.

The calculation of individual rewards takes into account several factors:

• The Validator's Reputation: A higher reputation yields a larger share of the reward pool, incentivizing Validators to maintain high accuracy and reliability.

• The total number of Validators: Rewards are distributed proportionally among all participating Validators.

Validation Process

The validation process begins after Oriole Insights proposes a correct outcome based on data from pre-specified sources. Validators are expected to conduct a thorough and independent analysis before making their decision.

Firstly, Validators access the proposed outcome through the platform's validation interface. They are provided with all relevant data and evidence from official channels specified in the market's description. This transparency ensures that all Validators have access to the same information when evaluating the proposed outcome.

Validators then perform their own analysis, gathering additional evidence such as official project announcements, reputable exchanges, and verified news outlets. They utilize their expert judgment to assess the accuracy of the proposed outcome, considering all available information.

Based on their analysis, Validators Agree or Disagree with the proposed outcome. Their decision should be informed and unbiased, focusing solely on the evidence rather than personal preferences or potential rewards.

Each market has a predefined Validation Delta

Note: Validation Delta—the difference required in validator votes to determine whether an answer is correct or not. This difference can be either agreement or disagreement. When the delta is reached, it signifies a consensus level among validators, leading to either a re-selection of the correct outcome or confirmation of the initially selected outcome.

• If the delta is reached for the "Agree" option, the proposed outcome is considered validated. The market moves to the Finished Stage, and rewards are distributed to successful predictors and Validators (according to Validators' Reward Pool).

• If the delta is reached for the "Disagree" option, the proposed outcome is rejected. Oriole Insights conducts a re-validation process, formulating a new proposed outcome based on further analysis. The validation process then repeats with the new proposal.

• If neither "Agree" nor "Disagree" reaches the required delta, the validation period may be extended to allow more Validators to participate. Oriole Insights may also provide additional information to assist in reaching a consensus. This extension ensures enough input is gathered to make a well-informed final decision.