Conditional Tokens

PredMarkets uses the Conditional Tokens Framework (ERC-1155) to represent each binary market outcome. Every market produces two outcome positions backed by the same collateral token.

Lifecycle

1. Prepare condition - the MarketFactory creates the condition for a specific asset, duration, and epoch.
2. Match orders - when liquidity crosses, settlement funds and distributes the corresponding outcome positions.
3. Hold or trade - positions can be held to expiry or sold back into the order book before resolution.
4. Resolve - the PythResolver verifies a Pyth price proof and reports the winning outcome after the epoch closes.
5. Redeem - holders of winning tokens redeem for collateral through Conditional Tokens.

Index Sets

UP / YES uses index set 1 and DOWN / NO uses index set 2. Those index sets derive the ERC-1155 position ids from the condition id.