Prediction Context

A market for trading tokens that reflect the probability of a future event occurring. Prices update in realtime based on supply and demand.

_{Prediction Core Concepts}

Example

Event: "Bitcoin above $100,000 before 2027-01-01?"
Current market pricing:
YES = $0.68 → the market estimates a 68% probability the event will happen
NO = $0.32 → 32% probability it won't happen
Total YES + NO ≈ $1.00

Payout matrix when the market resolves:

Actual outcome	YES holder	NO holder
Event happens	`1 YES = $1.00` ✅	`1 NO = $0` ❌
Event doesn’t happen	`1 YES = $0` ❌	`1 NO = $1.00` ✅

Why Price Is a Good Information Signal

People who believe the event will happen → buy YES → push the price up.
Aggregates opinions from many participants into a single transparent number.
Skin in the game: real money → traders only profit if they’re correct. Stronger than ordinary polls (where respondents have nothing at stake).
Research consistently shows that prediction markets are often more accurate than expert forecasts for events with statistical data (elections, sports, macroeconomics).

Compared to Traditional Bookmakers

Category	Bookmaker (Bet365, 1xBet…)	Prediction market
Counterparty	House (the platform)	Other users (peer-to-peer)
Pricing	House sets it, wide spread	Market-driven, AMM + CLOB
Custody	House holds funds (custodial)	Non-custodial, on-chain
Sell before resolution	Difficult / impossible	Yes - resell tokens anytime
Auditable	No	Yes - on-chain explorer
Fees	Baked into odds (hidden)	Transparent, shown before confirmation
Censorship	House can ban users	Permissionless

Limitations of Prediction Markets

Oracle Dependence

Requires a source to report the outcome on-chain. Oracles can be wrong, disputed, or delayed. PrediX uses pluggable oracles to mitigate single point of failure risk.
Read more: Resolution.

Liquidity Providers

Markets with no trading activity → wide spread → high slippage. Liquidity providers are incentivized via gauge voting.

Token Value

Tokens only have value within their market context
Example: 1 YES from market A cannot be used in market B. After resolution, losing tokens = $0.

Black Swan Events

Extremely rare events may not be priced correctly. Markets self-correct over time as information becomes public.

Quick Start

Read in order if you’re new, or jump to the section you need.

		Cover image
PrediX Market	CLOB with Uniswap v4.	46.png
Outcome Tokens	YES/NO, split/merge, $1 invariant.	48.png
CLOB + AMM hybrid	combines 2 liquidity mechanisms.	49.png
Resolution & Oracle	Who decides the outcome.	47.png