Data Providers

The Data Provider is an entity connected to the protocol with the responsibility to create and cancel events, as well as update (or reprice) sell-side odds. Data Providers ensure that there are Conditions (opens in a new tab) to predict on, and that the probabilities for these conditions are such that the pool generates a profit from the predicting over time.

When creating a new Condition, the Data Provider sets the following:

1. Total Reinforcements (opens in a new tab) for each condition and the respective outcomes

2. Margin for each condition/outcomes, thus setting the odds (opens in a new tab)

For its services, the Data Provider receives a share of the profit that is due to the Pool. It can be either the Pool owner or any other address, for additional security.

In contracts infrastructure, the Data Provider is represented as an address to which a part of the profit share is credited by LP after the completion of each Condition.

Currently, the Data Provider is also responsible for resolving Conditions in good-faith, with AzuroDAO acting as the arbiter of last resort in case of disputes. For instance, Pinnacle (one of Azuro’s Data Providers) has published an extensive document outlining the general rules to which it intends to use as a basis to resolve markets (https://www.pinnacle.com/en/future/betting-rules (opens in a new tab)).

Data Providers are required to put up collateral up to the total Reinforcement amount that they expect to use for the pricing of sell-side odds across involved prediction markets.