How are contracts settled on Polymarket compared to Kalshi?

Kalshi contracts settle based on predefined, regulator-approved data sources, while Polymarket contracts rely on oracle mechanisms and platform-defined resolution processes.

Detailed Explanation

Settlement mechanics differ significantly between these two platforms. Kalshi contracts specify objective resolution criteria tied to authoritative data sources—typically government agencies, official institutions, or widely recognized third-party data providers. The CFTC reviews these criteria before markets go live.

Polymarket uses decentralized or platform-managed oracle systems. Resolution may involve community governance, designated resolvers, or automated data feeds. While this allows for faster market creation, it introduces governance risk and potential ambiguity in edge cases.

The key implication: on Kalshi, you can often trace exactly how a contract will resolve before trading. On Polymarket, resolution may depend on interpretation or governance decisions that are harder to predict.

Common Scenarios

• Evaluating settlement risk before taking a position
• Comparing how the same event might resolve differently across platforms
• Assessing whether resolution criteria align with your thesis
• Understanding dispute mechanisms and their implications

Exceptions & Edge Cases

• If a data source is delayed or unavailable, then settlement timing may differ from expectations.
• If governance disputes arise on Polymarket, then resolution may be contested or delayed.
• If an event is ambiguous relative to contract language, then settlement risk increases regardless of platform.

Practical Examples

Consider a market on whether a specific economic report exceeds a threshold:

• Kalshi would specify the exact data release (e.g., BLS CPI) and the precise number that triggers resolution
• Polymarket might reference the same metric but leave more room for interpretation or revision handling
• If the BLS revises the number after initial release, the resolution process could differ

Actionable Takeaways

• ✅ Read settlement criteria carefully before trading
• ✅ Prefer clear, objective resolution sources when precision matters
• ✅ Account for governance risk where applicable
• ✅ Align settlement structure with your use case