> For the complete documentation index, see [llms.txt](https://yubit.gitbook.io/yubit/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://yubit.gitbook.io/yubit/prediction-market/yubit-prediction-market-price-source-and-settlement-price-explained.md). # YUBIT Prediction Market Price Source & Settlement Price Explained To ensure that price-based prediction events are settled using objective, transparent, and verifiable market data, certain YUBIT Prediction Market events use **Chainlink Data Streams** as their price data source and, where specified, **TWAP (Time-Weighted Average Price)** as the settlement reference. The actual price source, observation period, and settlement rules for each prediction event are specified in the corresponding event rules. *** #### Q1: Where does YUBIT Prediction Market price data come from? Certain price-based prediction events on YUBIT use market data provided by **Chainlink Data Streams**. Chainlink is a decentralized oracle infrastructure widely used across the blockchain ecosystem. It aggregates and validates market data through multiple data sources and oracle nodes to provide reliable external market data to blockchain applications. Therefore, the settlement price of applicable prediction events is not determined solely by YUBIT. Event outcomes are determined according to the predefined event rules using the specified Chainlink data. *** #### Q2: Why does YUBIT use Chainlink as a price source? For prediction markets, the settlement price directly determines the outcome of an event. Therefore, the reliability and transparency of the price source are critical. YUBIT uses Chainlink for several key reasons: **1. More objective market data** Compared with relying solely on the price of a single exchange, Chainlink provides market data through decentralized data infrastructure, reducing dependence on any single trading venue or data source. **2. Reduced impact from anomalies on a single market** During periods of extreme volatility, individual exchanges may temporarily experience price deviations, insufficient liquidity, or abnormal trades. Using a broader market data infrastructure helps reduce the impact of short-term anomalies from a single venue on prediction outcomes. **3. Publicly accessible and independently verifiable** Users can view relevant market data through Chainlink's official data pages and independently verify the price reference used for applicable prediction events. **4. More transparent settlement rules** YUBIT specifies the relevant price source, observation period, and settlement methodology in the rules of each applicable prediction event, allowing users to understand how the outcome will be determined before participating. Our principle is simple: **Clear Price Source · Defined Rules · Verifiable Results** *** #### Q3: What is TWAP? TWAP stands for **Time-Weighted Average Price**. Instead of relying on the price at a single instant, TWAP considers prices observed over a specified time window and calculates a time-weighted average. For example, if an event uses a **30-second TWAP**, the settlement reference is not simply the price displayed at one particular second. Instead, it reflects price data across the specified observation window. As a result, TWAP can provide a more representative view of the market price over that period. *** #### Q4: Why use TWAP instead of a single point-in-time price? Crypto markets can move extremely quickly. If settlement were based solely on a single instant, a temporary price spike, an isolated abnormal trade, or a brief price discrepancy between markets could have a disproportionate impact on the event outcome. By considering prices across a defined time window, TWAP can: * **Reduce the impact of momentary price spikes** * **Limit the influence of short-term abnormal trades** * **Reduce reliance on a single point-in-time price** * **Better represent the overall market price during the observation window** For example: Suppose BTC trades around **60,000 USDT** for most of the settlement window but briefly spikes to **60,500 USDT** before quickly returning to its previous level. If only that instant were used for settlement, the temporary 60,500 USDT price could directly determine the event outcome. With TWAP, prices across the observation window are considered, reducing the influence of an extremely short-lived price movement. This is one of the key reasons YUBIT uses TWAP for applicable price-based prediction events: **We aim to use a price that is more representative of market conditions, rather than relying on a single momentary price.** *** #### Q5: Does using TWAP mean YUBIT can manually adjust the settlement price? **No.** TWAP is calculated according to the data source and observation window specified in the event rules. It is not manually adjusted by YUBIT based on prediction outcomes. Users can review the applicable price source, observation period, and settlement methodology before participating in an event. YUBIT determines the event outcome according to the rules published in advance. The calculation method is not changed based on the number of participants, prediction amounts, or prediction direction. *** #### Q6: Why can the settlement price differ slightly from the price I see on an exchange? This is normal. Prices may differ slightly across trading platforms due to differences in liquidity, order book depth, trading activity, and data methodologies. In addition, when an event uses **TWAP**, the reference price represents the time-weighted average over a specified observation window rather than the latest traded price displayed by a particular exchange at a specific second. Therefore: **Exchange Spot Price ≠ Chainlink Data Price ≠ TWAP for a Defined Time Window** A small difference does not necessarily indicate an abnormal price. The price source and methodology specified in the corresponding event rules will serve as the final basis for determining the outcome. *** #### Q7: How can users independently verify Chainlink price data? Users can visit the official Chainlink Data Streams page to review the relevant market data. For example, for **BTC/USD 30-second TWAP**: 1. Open the official Chainlink BTC/USD TWAP data page. 2. Select **1D** as the timeframe. 3. Locate the relevant time according to the settlement time specified in the event rules. 4. Review the corresponding price data and compare it with the event settlement rules. **Chainlink Official BTC/USD 30s TWAP:** For other underlying assets, please refer to the Chainlink data source specified in the corresponding prediction event rules. *** #### Q8: Why does YUBIT use this pricing mechanism? One of the most important principles of a prediction market is ensuring that users can clearly understand: **“What determines the final outcome?”** By using Chainlink market data and TWAP where applicable, YUBIT aims to reduce the impact of a single exchange, a single point in time, and short-lived abnormal price movements on prediction outcomes. Through **Chainlink Data Streams + Clearly Defined Event Rules + TWAP Observation Windows**, YUBIT aims to make price-based event settlement: **Objective · Transparent · Verifiable · More Representative of Market Conditions** Before participating, users can review the corresponding event rules to understand the specific price source, observation time, TWAP period, and settlement methodology. > **Important:** Different prediction events may use different price sources, observation windows, or settlement methodologies. The rules published on the corresponding event page shall always serve as the final basis for settlement.