Prediction Markets
Understanding prediction market mechanics on Trufonomics
What Are Prediction Markets?
Prediction markets are financial instruments where the price of a share reflects the market's collective estimate of the probability of an event occurring. On Trufonomics, these events are economic outcomes — inflation readings, employment numbers, housing data.
Share Pricing
Shares always trade between $0.00 and $1.00.
- A share priced at $0.70 implies the market believes there is a 70% probability the event occurs
- You profit when the market moves toward your position
- At settlement, shares resolve to either $1.00 (event occurred) or $0.00 (it did not)
How Shares Are Created
When a buyer and seller are matched at complementary prices (e.g., Yes at $0.65 and No at $0.35), the system mints a new share pair from $1.00 of collateral.
When a holder of both Yes and No shares wants to exit, the system burns the pair and returns $1.00 of collateral.
This mint/burn mechanism ensures shares are always fully collateralized.
Data Advantage
Traditional prediction markets resolve against government releases (BLS, BEA). Trufonomics markets resolve against real-time TRUF data streams, giving you:
- Daily data updates vs. monthly government releases
- Category-level granularity (food, housing, transport, energy)
- 2-3 week information lead on official numbers
Risk
- Market risk: Prices move against your position before settlement
- Liquidity risk: Thin orderbooks may cause slippage on large orders
- Oracle risk: Settlement depends on TRUF data stream accuracy