How ProbiFi Markets Work
ProbiFi prediction markets are powered by a share-based bonding curve system, designed to balance liquidity, pricing, and fairness all on-chain and without the need for centralized order books or custodians.
Share System Overview
Each market has multiple possible outcomes (e.g., YES or NO). When a user places a trade, they are not betting directly on a result — instead, they are buying "shares" representing one of the outcomes.
Buying Shares: When a user buys into an outcome, they are exchanging KAS (or supported tokens) for newly minted shares of that outcome. The number of shares received is calculated dynamically based on the bonding curve (see below).
Selling Shares: Users can sell their shares at any time before market resolution. When this happens, the shares are burned, and the user receives KAS based on the current share price.
Post-Resolution: Once a market is resolved by the oracle, only the correct outcome’s shares are redeemable for 1:1 payout in KAS. Shares for incorrect outcomes become worthless and are burned.
Bonding Curve Mechanics
Pricing in ProbiFi markets is governed by a bonding curve, a dynamic formula that adjusts the price of shares based on demand and total outstanding supply:
As more users buy a specific outcome, the price of that outcome’s shares increases.
Selling shares reduces supply, causing prices to decrease slightly.
This creates a market-driven price discovery mechanism, where odds reflect real-time sentiment and supply-demand dynamics.
Why It Works
Scalable: No need for counterparty matching or liquidity walls.
Fully On-Chain: All minting, burning, and pricing logic is enforced by smart contracts.
Efficient: Shares allow fractional ownership and flexible entry/exit.
Fair: Early sellers fund deeper payouts for outcome winners, promoting conviction-based participation.
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