Technology

Oracle is built using an AMM (Automated Market Maker) which facilitates the trading of prediction shares without relying on a traditional order book. Here’s how it works:

Users stake funds on different prediction outcomes (e.g., election results), and these funds form a liquidity pool. The AMM algorithm adjusts the price of prediction shares based on the amount of liquidity in each outcome pool, maintaining a balance through the constant product formula. As participants choose outcomes, the ratio of funds shifts, affecting the price of shares for each prediction.

On the tech side, Oracle Cat is built on the Solana blockchain for its speed and scalability. We developed a composit tried and tested algorithm that handles the core functionality of the prediction market, including liquidity management, payouts, and share pricing. The Anchor framework simplifies the development of these contracts. For the frontend, Solana.js is typically employed, allowing users to interact with the prediction market through a user-friendly interface. Additionally, off-chain data, such as real-time event results, may be handled in some cases by trusted oracles and in some cases a third-party tracking and managing platform, ensuring the accuracy of outcomes for market settlement.

This stack ensures efficient and reliable prediction markets with low transaction fees and high throughput.