a16z: Predictive Market Oracle Mechanism plays the role of "Judge, Jury, and Executioner" simultaneously, and contract execution faces settlement arbitration bottlenecks

BlockBeats News, January 25th, a16z Crypto released a long article titled "What to Do When the Prediction Market Fails." It stated that the hardest problem in a prediction market is not pricing the future but determining what actually happened. One of the biggest bottlenecks in the scaling of prediction markets is "how contracts settle."

At the beginning of the year, former Venezuelan President Maduro was captured by the US military, while Polymarket denied that Venezuela was invaded, labeling the "US invasion of Venezuela" market as false, sparking widespread controversy. Polymarket later explained that "the market referred to the US military action aimed at establishing control, and the capture of Maduro and evacuation cannot be considered an invasion."

a16z Crypto commented that the prediction market is facing a tricky situation, as the execution of prediction contracts should follow either official information (Maduro wins) or a consensus of credible reports (opposition wins). Polymarket's dispute resolution mechanism played the roles of "judge, jury, and executioner" in this political drama, and the settlement of contracts was heavily manipulated.