DeFi · 60 / 86 · 2 min

Prediction markets

A prediction market pays out based on an outcome someone has to judge. You are betting. You are also trusting the judge and the oracle.

A worked case

A market says 90 percent. A person treats that as news. The referee resolves the other way, or late. The 90 was a crowd's bet. The payout was the referee's decision.

The bet

The price of a share is a crowd's probability, not a fact. You can lose the stake. A market that says 90 percent is not a promise.

The judge

Someone decides what really happened. That person or committee can be late, biased, or bribed. Read who resolves the market before you like the odds.

It is not a salary and it is not news. It is a bet with a referee.

The crowd is not the referee

Prediction markets let people trade on an outcome. The price looks like a probability. It is a crowd's bet, plus a fee, plus whoever is willing to take the other side. Polymarket and similar sites became widely cited during elections. A contract still has to decide what really happened. Someone writes the resolution rule. Someone, or some oracle, applies it. They can be late. They can be disputed. A market that said 90 percent and then paid the other way did not break. It revealed that 90 was not a fact.

You are betting. You are also trusting the judge. Read the resolution text before you like the odds, including what happens if the event is ambiguous. Ambiguous events are where the money actually fights.

It is not news, and it is not a salary. A high price is not a promise from the exchange or from the universe.

Read it yourself

• Prediction market
• Polymarket

These links are the record. They are not a recommendation, and they are not instructions. A news story or a court paper can still be wrong about a detail. The check does not change because a famous name is in the story.

Apply the check

Open a question. The line is about this topic. It is not a verdict that anything is safe.

Check yourself