Market Lifecycle

A prediction market follows a lifecycle from creation to final settlement. Each stage defines how markets are introduced, traded, and ultimately resolved.

Understanding the lifecycle helps participants see how prediction markets evolve over time.

Market Creation

A prediction market begins with the creation of a question about a future event.

The market must clearly define

• the event being predicted
• possible outcomes
• the resolution criteria
• the deadline or resolution time

Clear market definitions ensure that participants understand exactly what outcome is being forecasted.

Market Activation

Once a market is created, it becomes available for trading.

During this phase

• participants can explore the market
• traders can buy or sell outcomes
• prices begin to reflect expectations

As trading begins, market prices start forming probability signals about the event.

Market Trading

During the trading phase, participants interact with the market by buying or selling outcomes.

Market prices continuously change based on

• trading activity
• new information
• shifts in market sentiment

This process allows the market to aggregate information from many participants.

Market Resolution

After the event occurs, the market enters the resolution phase.

During this stage

• the actual outcome of the event is determined
• reliable data sources are used to verify the result
• the correct outcome is confirmed

Accurate resolution ensures fairness and transparency in the prediction market.

Market Settlement

Once the outcome is confirmed, the market settles.

During settlement

• the correct outcome is finalized
• the market is closed
• final positions are determined

Settlement marks the completion of the market lifecycle.