Bayes Market structures predictions into two fundamental types of questions: Binary and Multi-outcome. This structure is foundational to how trading works, how liquidity is provided, and how the markets are resolved.
Binary Questions
Binary markets are the simplest and most common form of prediction market.
Structure: They present a question with two possible outcomes, typically expressed as:
Yes/No (e.g., "Will the Fed raise rates by year-end?")
Up/Down (e.g., "Will Apple's stock price be up or down tomorrow?")
Trading Mechanism:
Each outcome (Yes/No or Up/Down) is represented by a tradeable asset, sometimes referred to as a token or share.
Each of these tokens has its own order book, meaning there's a separate market for buying and selling the "Yes" token and the "No" token.
Multi-outcome Questions
Multi-outcome questions allow users to predict events with more than two potential results, providing a richer forecasting environment.
Structure: These questions present three or more distinct outcomes.
Trading Mechanism (Built on Binary Logic):
Each unique outcome (e.g., "Candidate A", "Candidate B") is built on a financial structure that, at its core, operates similarly to separate binary markets.
Crucially, each outcome has its own set of rules, its own order book, and its own resolution process, separate from the other outcomes in the same question.
⚠️Important Note: The rules and resolution criteria for Multi-outcome markets can be complex. Some questions are structured so that multiple answers could technically be correct (e.g., a specific weather condition in two different cities), while others are strictly categorical (only one answer can be correct). Users must read the market rules carefully before trading to understand the exact resolution criteria.