How prediction market odds work
A prediction market shows a price, not odds, and the price is a probability. Here is how that number is built, how it turns into a payout, and what moves it.
Price is probability
Every market is a YES/NO question with a close time. The YES price, shown in cents, is the probability the market assigns to YES. Buy at that price and, if you are right, each share pays out 1:
payout multiplier = 1 / price
65¢ → 1.54× 41¢ → 2.44× 20¢ → 5.00× 80¢ → 1.25×A 10 USDT bet on YES at 65¢ buys 15.38 shares and pays 15.38 USDT if YES resolves. The other side loses its stake. There is no draw.
Where the number comes from
The house does not guess. Each market carries a reference probability pulled from a large public prediction market every 30 seconds — the midpoint of its order book, where real money is trading the same question. Markets with no public reference are set by hand and marked as such in their rules.
Margin: why YES + NO exceeds 100%
A fair market would price YES and NO to sum to exactly 100%. The house adds a margin of 6% by default, split evenly: 3 points on each side. A 62% reference becomes YES 65¢ and NO 41¢, which sum to 106%. That overround is the house edge, paid by whichever side is wrong; it is the same mechanism bookmakers use, expressed as a price instead of odds.
yes = reference + margin/2 + lean
no = (1 − reference) + margin/2 − leanLean: the price reacts to money
If bettors pile onto one side, the house's worst-case loss grows. The price then leans against the heavy side by a fixed amount per thousand dollars of net exposure (50 basis points per ,000, capped at 8 points). It is a small, mechanical shade, not an opinion, and it unwinds as the book rebalances. Each market also has a hard exposure cap; bets that would push the house past it are refused.
Freezes and price-moved errors
If the reference feed is older than three minutes, or the reference moves more than 5 points in one refresh, the market freezes: no bets until it settles. Separately, every bet carries the price you saw; if the live price has moved more than a quarter of a point by the time it lands, the bet is rejected and you are shown the new price. You can never be filled at a price you did not see.
Cash-out
Open positions can be sold back before the market closes. The bid is the current price for your side minus the margin and a 2-point spread, never below a 1¢ floor. Buy YES at 65¢, watch it move to 80¢, and the cash-out bid is roughly 72¢: a profit locked in before resolution. Cash-out closes 15 minutes before the market does, so nobody can sell into a result that is already known.
Resolution
Every market names its settlement source in the rules. After close, one admin proposes an outcome with a link to the evidence and a second admin must confirm it — a four-eyes rule — before winners are paid. If the question cannot be settled cleanly, the market is voided and every stake returned in full.
Questions
What does a YES price of 65¢ mean?
The market prices YES at 65% probability. A 1 USDT bet on YES pays 1 / 0.65 = 1.54 USDT if YES resolves, and nothing if NO does.
Why do YES and NO add up to more than 100%?
That is the house margin. The reference probability is split around the midpoint by a fixed number of basis points on each side, so the two prices sum to about 106%. It is the same overround a bookmaker builds into odds.
Where does the reference probability come from?
From a public prediction market, refreshed every 30 seconds. If the feed is stale or the reference jumps sharply in a short window, the market freezes until it settles so nobody bets on an old price.
How is cash-out calculated?
Cash-out sells your position back at the current price for your side minus the margin and a small spread, with a floor so it never goes below a minimum. It is unavailable in the final 15 minutes before a market closes.
Who decides the result?
Two people. An admin proposes the outcome with evidence; a second admin must confirm before any payout is made. Ambiguous markets are voided and stakes returned.