Resolution Process

Actions

• Initiate - Binary CTF markets are initialized via the UmaCtfAdapter's initialize() function. This stores the question parameters on the contract, prepares the CTF and requests a price for a question from the OO. It returns a questionID that is also used to reference on the UmaCtfAdapter. The caller provides:

  1. ancillaryData - data used to resolve a question (i.e the question + clarifications)
  2. rewardToken - ERC20 token address used for payment of rewards and fees
  3. reward - Reward amount offered to a successful proposer. The caller must have set allowance so that the contract can pull this reward in.
  4. proposalBond - Bond required to be posted by OO proposers/disputers. If 0, the default OO bond is used.
  5. liveness - UMA liveness period in seconds. If 0, the default liveness period is used.

• Propose Price - Anyone can then propose a price to the question on the OO. To do this they must post the proposalBond. The liveness period begins after a price is proposed.

• Dispute - Anyone that disagrees with the proposed price has the opportunity to dispute the price by posting a counter bond via the OO, this proposed will now be escalated to the DVM for a voter-wide vote.

Possible Flows

When the first proposed price is disputed for a questionID on the adapter, a callback is made and posted as the reward for this new proposal. This means a second questionID, making a new questionID to the OO (the reward is returned before the callback is made and posted as the reward for this new proposal). This allows for a second round of resolution, and correspondingly a second dispute is required for it to go to the DVM. The thinking behind this is to doubles the cost of a potential griefing vector (two disputes are required just one) and also allows far-fetched (incorrect) first price proposals to not delay the resolution. As such there are two possible flows:

• Initialize (CTFAdapter) -> Propose (OO) -> Resolve (CTFAdapter)
• Initialize (CTFAdaptor) -> Propose (OO) -> Challenge (OO) -> Propose (OO) -> Resolve (CTFAdaptor)
• Initialize (CTFAdaptor) -> Propose (OO) -> Challenge (OO) -> Propose (OO) -> Challenge (CtfAdapter) -> Resolve (CTFAdaptor)