Prediction markets

How a pot market works

Two pots, one question about a launch on this chain, and a payout that is each winner's share of the whole pot.

Version: 1.0
Updated: 2026-10-14
Source: Prediction market contract sources · Predict, common and drops contracts — design reference

Status#

Two pots, no price#

A market is one yes-or-no question and two pots, YES and NO. Nothing is priced: there is no order book and no AMM. Each market is an EIP-1167 clone of one fixed ParimutuelMarket implementation, so no key can change a live market’s logic.

A market's life

Step	Call	Who
Create	`PredictionMarketFactory.createMarket` — opens with an equal opening stake on both sides	Anyone, paying the creation fee
Stake	`stake(side, amount)` — no unstake	Anyone
Settle	`LaunchOutcomeOracle.settle(marketId)`	Anyone
Claim	`claim()` — a payout or a refund	Each staker; no expiry

See Creating a market and Settlement and refunds.

The payout#

ParimutuelMarket payout arithmetic

Quantity	Formula
Pot	`totalYes + totalNo`
Protocol fee	`pot × feeBps / 10,000`
Featured-placement fee	`pot × marketingBps / 10,000` — zero unless the market was featured
Payout pool	`pot − protocol fee − featured fee`
A winner’s payout	`stake on the winning side × payout pool / winning pot`, rounded down

code

pot = 10 ETH  (YES 4, NO 6)   feeBps = 200   outcome = YES
payout pool = 10 − 0.2 = 9.8 ETH
a 1 ETH YES stake receives 1 × 9.8 / 4 = 2.45 ETH

When nobody pays a fee

Case	Every staker gets
Voided	Their stake back at par; both fees zero
Settled with one side empty	Their stake back at par; both fees zero

Division truncates, so payouts never exceed the payout pool; the remainder of under one base unit per claimant stays in the market and is never swept.

What a market is about#

Every question is about The Hood’s own launchpad on the same chain: LaunchOutcomeOracle answers it by reading the launchpad’s contracts directly. No signer, no bond, no challenge window, no off-chain data.

code

question = (family, metric, subject, comparator, threshold, deadline)
outcome  = compare(observedValue, comparator, threshold)   // YES when true

Which metrics may be asked: Creating a market. The ids and reads: Prediction markets metrics.

Currencies and limits#

A market is denominated in one currency for its whole life, chosen at creation from SettlementRegistry. Stakes, fees and payouts are all in that currency, and figures are never summed across currencies.

SettlementRegistry routes

Currency	How it is listed	Default protocol fee
Native ETH	Always listed; cannot be delisted or denied	200 bps (2%) on production
Core stablecoin	Owner, via `addCoreCurrency`	Set at listing
Project token	A graduated Hood launch token that meets the listing bars, after a 7-day notice	0 bps unless the owner sets one

Native ETH limits, set in the SettlementRegistry constructor

Limit	Value	Refusal
Minimum stake	0.001 ETH	`StakeBelowMinimum`
Per market	100 ETH	`StakeExceedsMarketCap`
Per address, per market	10 ETH	`StakeExceedsPerAddressCap`
Protocol fee ceiling	500 bps — `MAX_FEE_BPS`	`FeeAboveHardCap`

A market copies its currency’s fee and limits at creation; a later change to the registry affects new markets only. ERC-20 stakes credit the measured amount received, so a fee-on-transfer token credits what actually arrived.

Staking window#

When staking closes

Condition	Refusal
The deadline has passed	`StakingClosed`
The market settled or voided before its deadline	`StakingClosedMarketResolved`
The market or the factory is paused	`StakingPaused`