Three major oracles divide the prediction market: Polymarket introduces Chainlink, Pyth reduces settlement risk

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The prediction market has seen explosive growth in recent years, but at the other end of this celebration, there is a role that has always stood outside the spotlight and been repeatedly cursed by users: the oracle. (Context: Aptos developers expose inside stories! Questioning secret agreements with exchanges, excessive node centralization, fake PoS mechanisms...) (Background: Perspective | How did the new public chain Aptos maximize market expectations?) Over the past two years, the prediction market has become the brightest narrative in the crypto industry. The entire sector saw a combined trading volume of nearly $10 billion by the end of last year, with monthly growth momentum accelerating significantly in the second half of 2025. But at the other end of this celebration, there is a role that has always stood outside the spotlight and been repeatedly cursed by users: the oracle. Over the past year, there have been multiple major controversies surrounding Polymarket, such as whether Ukrainian President Zelensky "wears a suit" (cumulative trading volume reached $237 million), the Ukraine mineral agreement (involving $7 million, with a whale using about 5 million UMA to manipulate the vote), and whether the Trump administration would declassify UFO files in 2025 ($16 million market, proven to be user-publicized) regarding its Optimistic Oracle and token governance structure. The design logic of UMA's Optimistic Oracle is: anyone proposes a result and puts up a bond; if no one disputes it within the challenge period (usually 2 hours), the result is defaulted as true; if there is a dispute, it is decided by UMA token holders through a Data Verification Mechanism (DVM) vote. The advantages of this mechanism are obvious: it is cheap, can handle long-tail events, and can handle "subjective issues," such as whether "Zelensky's suit counts as a suit," a problem that traditional price oracles cannot handle at all. However, multiple controversies on Polymarket have exposed the flaws in this design. For example, the Ukraine mineral agreement incident in March last year, where the cumulative trading volume of the prediction event was about $7 million, focused on whether Trump would reach a rare earth mineral agreement with Ukraine before April. Although no agreement was reached, the market was still settled as "Yes." According to reports from The Defiant and Cryptopolitan, the main reason was that a UMA whale held about 5 million UMA through three accounts, accounting for about 25% of the voting weight in that round, and pushed the vote to Yes. Subsequently, Polymarket clearly stated in a Discord announcement: "This is not a system failure, but the result of the governance mechanism, so we refuse to refund." It can be said that Polymarket's reliance on UMA is facing systemic risk. The oracle, originally designed as a "neutral truth adjudication layer," has now seen its governance token's concentrated distribution become a tool for a few to influence market results. According to the crypto asset data platform RootData, it was not until September last year, when Polymarket began to push cryptocurrency events, that it urgently needed to introduce more deterministic data sources. Therefore, it began to hand over part of the settlement work to another oracle with a completely different system: Chainlink. CoinDesk reported that Polymarket began introducing Chainlink to improve its method of determining prediction results. Both parties announced that Polymarket would use Chainlink to automatically settle markets related to asset prices to reduce latency and the risk of tampering. Initially, it focused on crypto asset price markets and simultaneously explored application space in more subjective markets. The significance of this cooperation is that Polymarket has added a track for automated determination by directly reading market prices via Chainlink, in addition to relying on UMA's "group game-style subjective consensus adjudication." From the perspective of the market landscape, Chainlink is the undisputed leader in the oracle track, with a market share of over 87% in the oracle market and a TVS share of 61.58% (about $62.9 billion), significantly ahead of the second-place Chronicle (10.15%) and the third-place RedStone (7.94%). It can also be said that its penetration in DeFi is almost saturated. Mainstream protocols, from Aave, GMX, and Synthetix's liquidation and pricing to Curve's security references and Lido's cross-chain standards, almost all use different services provided by Chainlink. Market share is reflected in its layout. This scale is equivalent to Chainlink expanding itself from a "single-chain price feed intermediary" to an "information and asset exchange layer between multiple chains." But saturation also means that DeFi is no longer its growth curve. According to a deep report by Galaxy, about 97% (about $399 million) of Chainlink's cumulative

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