EigenLayer, Polymarket, and UMA will develop the next-generation oracle system

The project aims to introduce an innovative system for a wider range of scenarios as prediction markets evolve

20.02.2025 - 15:00

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What’s new? UMA, known for its Optimistic Oracle system, has announced in a blog post its collaboration with Polymarket and EigenLayer. It will focus on improving the functionality and scalability of oracles in prediction markets. The teams plan to develop an oracle that improves both the economic security and capacity of the oracle system. Polymarket, a decentralized prediction platform where users trade based on the results of real-world events, has been using the UMA oracle system since its inception.

What else is known? The joint project aims to implement a system that may be better suited to a wider range of scenarios as prediction markets evolve. The partnership with EigenLayer may allow Ethereum (ETH) stakers to protect the oracle, strengthening its economic support at the expense of Ethereum security.

Unlike traditional decentralized oracle networks such as Chainlink and Pyth, which aggregate off-chain data from multiple sources, this new oracle system focuses on community consensus and dispute resolution, making it well-suited for prediction markets.

What is the benefit of the project? Oracles play a crucial role in blockchain ecosystems as they bridge the gap between smart contracts on-chain and data off-chain. They allow decentralized applications (dApps) to access real-world information such as price flows, weather data, or sports results, which is essential for functions such as prediction markets, DeFi platforms, and insurance contracts.

In August 2024, leading financial data and news services provider Bloomberg LP said it intends to incorporate election betting data from cryptocurrency betting platform Polymarket into its widely used terminal.

In November 2024, France’s National Gambling Authority (ANJ) intended to shut down access to Polymarket. The platform attracted a lot of attention in the run-up to the US election: the volume of trades related to the outcome of this event on this platform approached $4 billion.

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