Oracle
An oracle is the source of truth used for settlement, such as a publication, official data release, or rule-defined authority.
Definition
An oracle is the rule-defined source used to determine the market outcome at settlement. An oracle can be a specific website, a government release, a sports league authority, or any other source explicitly named in the market rules.
Why it matters
Oracle quality determines settlement integrity. A strong oracle is public, stable, and verifiable. A weak oracle can introduce uncertainty, late revisions, or opportunities for disputes.
What to check
• Is the oracle public and easy to verify?
• Is it stable, or does it change historical data?
• Is the oracle uniquely defined, or are multiple sources allowed?
• Does the market define what happens if the oracle is unavailable?
Common pitfalls
Vague source wording: Words like official sources without naming them can create ambiguity.
Revision risk: Some data series are revised days or weeks later.