A Prediction Market in Polkamarkets will always be in one of three states in its lifecycle:
When a Prediction Market is created, it is immediately Open for trading. Users can now make their predictions by buying outcome shares, sell their outcomes, or add and remove liquidity to markets. Other than that, the market is immutable: the Market Creator cannot edit any information such as the questions, the outcomes, the description, the closing date, etc. For more information on Polkamarkets Prediction Markets properties and how to create them, please read Market Creation.
Closed / Awaiting Resolution
Every prediction market on Polkamarkets has an immutable closing date that is set by the Market Creator during the creation process. When the closing date elapses, the prediction market closes, and the trading stops — no outcomes can be bought or sold anymore. The market is now in the resolution stage. At this stage, the correct outcome must be defined so that the market can be resolved. POLK token holders can now place bonds on the outcome they believe to be the correct (truthful) one, including whether the market should be considered Invalid. For instance, consider the market “Which of these will replace Boris Johnson as the leader of the UK Conservative Party: Rowan Atkinson or Ed Sheeran?”. If someone other than Rowan Atkison or Ed Sheeran replaces Boris Johnson, the correct outcome should be “Invalid”, as the correct outcome is not within the range of possible outcomes. As soon as someone places a bond on an outcome, a 3-day lock period starts. Before the lock period lapses, any user can place a bond on a different outcome, effectively disputing the previous user’s resolution. Every time a new bond is placed, the 3-day period restarts, and the amount of POLK tokens required to place a bond is doubled. When the 3-day lock period lapses without any challenges, the last outcome bonded is chosen as the winning outcome and the market is resolved. Any user that bonded POLK to an incorrect outcome will lose the bonded tokens. The last user that bonded the correct outcome will claim their POLK back, in addition to any POLK bonded to the incorrect outcomes, minus any POLK previously bonded by other users on the correct outcome. Note that placing a bond on the same outcome that was previously chosen is pointless, and that you will lose the amount bonded. In technical parlance, these penalisations are the equivalent to “slashing” an oracle that is providing incoherent information. For more information, read the section.
When a market is resolved, users who predicted the correct outcome can claim their earnings. All shares of the winning outcome are now worth 1 unit of the market’s token. Users who predicted any of the incorrect outcomes will not be able to claim any earnings, as the value of their shares is now worth 0. When a market resolves as Invalid, users can claim back/receive the amount of outcome shares that they bought, but at the price of the outcomes at the moment of market closure, not at the price that they originally bought their shares at.