What is an information market?

An information market is where people buy and sell shares on how a future event will resolve. Prices change in response to trading activity. You can buy, trade, or sell shares in future outcomes.

Who sets the probabilities on a market?

The prices of shares in each market reflect the probabilities of the outcomes. Shares are valued between $0.00 and $1.00 and prices change depending on tradersโ€™ collective beliefs on the likelihood of the market resolving in either direction. For instance, if the price for a โ€œYesโ€ share is $0.75, then the market believes the probability that the event will occur is 75%.

What are the different types of markets?

There are 3 types of markets that currently exist:

  • Binary - A market with two options that will resolve either $1 or $0. (ex: Will Tetranode have over 100k Twitter followers by 12/31/2025? YES/NO)

  • Categorical - A market with multiple options that will resolve either $1 or $0. (ex: What ice cream will have the most sales in 2025? Chocolate/Vanilla/Strawberry/Other)

  • Scalar - A market that resolves to where the final value sits between a lower and upper bound.

    • What will the population of Spain be in their upcoming census (47M-55M)? Long/Short)

    • If the population is 50M, the outcomes will resolve to: Long = $0.375 & Short = $0.625

I have a great idea for a market. Do you take suggestions?

Our community is always open to ideas! Check out our Discord and explain your idea on the โ€œformal-market-suggestionsโ€ channel.

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