How does a prediction market work?

A prediction market operates very much like a stock market – but instead of stocks, you’re trading outcome shares of an event. Each event is posed as a yes/no question (for example, “Will Team A make the playoffs?”). If you think the answer is yes, you buy “Yes” shares; if you think the answer is no, you buy “No” shares. The price of a share (in USDC, a stablecoin pegged to the US dollar) ranges from $0 to $1 and reflects the market’s perceived probability of that outcome. These shares can be bought and sold at any time. For instance, if a “Yes” share is trading at $0.65, the market believes there’s a 65% chance of the event happening. If the event indeed happens and resolves “Yes,” each “Yes” share pays out $1; if not, those shares expire worthless. Essentially, you profit by buying low and selling high or by holding winning shares until resolution. This crowd-driven pricing gives a live forecast of the event’s odds, and you can trade in and out at any time before the market resolves.