How prediction markets work

Prices are probabilities. Here is how that works in practice.

Every market has two sides — Yes and No — whose prices always add up to about 1.00 USDC. If Yes trades at 0.70, No trades at about 0.30.

Buying

Buying Yes shares profits if the event happens; buying No profits if it does not. You can buy either side of any market.

Prices move

Naugur uses an automated market maker plus a live order book. As people buy a side, its price rises; as they sell, it falls. Sports markets also re-price automatically from the live score.

Settlement

When the event concludes, the market resolves to the true outcome. Winning shares are worth 1.00 each; losing shares are worth 0. See “Payouts & Resolution”.

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