How prediction markets work
Understand the mechanics behind prediction markets, resolution, and payouts.
What is a prediction market?
A prediction market is a platform where users forecast the outcome of real-world events. Users stake funds on YES or NO outcomes. When the event resolves, correct predictors earn a payout proportional to their stake.
Market prices reflect collective wisdom. If 70% of users predict YES, the market is signaling a 70% probability of that outcome. This aggregation often outperforms individual experts.
Market types on Predex
Event Markets
Long-form questions on politics, sports, entertainment, and world events. End dates range from days to months. Example: "Will Trump win the 2026 midterms?"
3-Minute Crypto Markets
Fast-paced markets on BTC, ETH, BNB, and 45+ other cryptocurrencies. Predict if the price will go UP or DOWN in 3 minutes. Continuous rounds 24/7.
Resolution process
Every market has clearly-defined resolution rules shown at creation. Resolution happens three ways:
Crypto price markets resolve automatically via Chainlink price feeds. Tamper-proof and instant.
Sports markets resolve via verified sports data APIs immediately after events conclude.
Political and news events are resolved by verifying outcomes against reputable sources (Reuters, BBC, official announcements).
Payout math
When a market resolves, winners split the losing pool proportional to their stakes.
Maximum payout: 1.95x. Minimum: 1.01x (when pool is very lopsided). Fee of 1.5% is deducted from winnings in crypto markets.
AI-powered predictions
Every market shows AI-generated probability estimates powered by GPT-4. The AI analyzes:
- • Current event context and recent news
- • Historical precedent for similar events
- • Time remaining until resolution
- • Market-specific factors
AI predictions are informational only. They complement your research, not replace it.