Source of Truth
In prediction markets, every event must be resolved using a clearly defined reference. The source of truth specifies where that confirmation comes from, such as an official announcement, published dataset, or authorized report.
This source is set when the market is created. It removes ambiguity by stating exactly which information will be used to determine the outcome. Using a clear source of truth helps prevent disputes. All participants know in advance which evidence will matter and which will not. The choice of source of truth directly affects trust. Reliable, transparent sources lead to cleaner resolution and higher confidence in prediction markets data.
For analysts, the source of truth explains why a market resolved a certain way. It provides context for resolution timing, delays, or disagreements. Over time, consistent sources of truth improve data quality. They make historical prediction markets data more reliable for evaluation and modeling.
Why It Matters
Without a clear source of truth, outcomes can be disputed or unclear. A defined source ensures fair resolution and trustworthy prediction markets data.
What is considered a source of truth in prediction markets?
In prediction markets, a source of truth is the specific external reference used to decide the final outcome. This could be an official announcement, published dataset, or authoritative report named in advance. Only this source is used at resolution, even if other information exists. Clear definition prevents ambiguity and disagreement.
How is the source of truth chosen for a prediction market?
The source of truth is defined when the market is created. Market designers select a source that is public, verifiable, and widely accepted. The choice depends on the event type, data availability, and resolution clarity. Poorly chosen sources can lead to delays or disputes.
Can prediction markets resolve differently if sources of truth conflict?
Prediction markets do not weigh multiple sources equally. If conflicting information appears, only the predefined source of truth matters. Even widely reported alternatives are ignored if they are not designated. This strict rule ensures consistency, but it also makes source selection critical.
On Kalshi, an economic market may use an official government statistics release as its source of truth. The market resolves based only on that published data, not on estimates or leaks.
Source of Truth and FinFeedAPI
FinFeedAPI’s Prediction Markets API provides prediction markets data that includes resolution references tied to a defined source of truth. Analysts can identify which sources were used and align resolution timing with external datasets. This supports data validation, auditability, and accurate backtesting. The API enables consistent analysis of source-of-truth effects across prediction markets.