> For the complete documentation index, see [llms.txt](https://docs.predict.fun/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.predict.fun/the-basics/quickstart.md).
# How Does Predict Work?
Predict lets you buy and sell YES and NO shares priced on the probability of a future event. Learn how binary and multi-outcome markets work.
Predict is a **prediction market**: a platform where you can buy and sell shares whose value is **based on the outcome of a future event**.
In many ways, it's similar to the classic trading venues you know. In others, not so much.
Let's dive right in with an example of a market:
#### **`Will Candidate McCandidateFace win the election on December 21, 2026?`**
There are only two answers to the question above: **yes** and **no**. Fittingly, the market has two tradable assets (we call them *shares*): **YES** and **NO**. One other thing you need to know, each market is time-bound, meaning it has an **expiry date**.
The above market expires on December 21, 2026, which is when we'll know for certain whether Mr. McCandidateFace has won the election. Once we reach this stage, the correct share can be redeemed for **$1** — while the other becomes valueless.
Up until that point, though? These shares will trade freely, but the market will price them commensurate with their probability of occurring.
For instance, if YES trades at **$0.95** while NO trades at **$0.05**, it would suggest a high likelihood (**95%**) that Candidate McCandidateFace will win, based on currently available information. Naturally, as more information becomes available, the market will trade to reflect an updated price.
Assuming Mr. McCandidateFace wins and **YES** resolves to $1.00, anyone that purchased a share at $0.95 will make a $0.05 profit on it. However, should he drop out of the race or lose, **YES** resolves to $0.00 while **NO** resolves to $1.00 — meaning that anyone having purchased **NO** at $0.05 would have made a per-share profit of $0.95.
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**Why does price represent probability?**
In short, because people like making money. With an incentive to be correct, rational participants will examine all available information before taking a position — bidding the price to the probability they assign to that event.
In a case where the wider market believes probability to be higher than the share’s current trading price, it’ll bid it up until the share is no longer ‘undervalued.’
By aggregating these ‘educated guesses’ across hundreds, thousands, or millions of people, we arrive at an approximate probability of an event taking place.
Note, however, the inherent limitations of these systems: participants have limited liquidity and may be risk-averse, meaning they won’t necessarily bet with full conviction on a single position.
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### Multi-outcome Markets
Above, we demonstrated how an event with only two possible outcomes works. But Predict also supports *multi-outcome* markets, where you can place bets on more than two options. For instance:
#### `Which candidate will win the 2026 December election?`
* `Candidate McCandidateFace`
* `Runner McRunnerFace`
* `Politician McPoliticianFace`
The same rules apply as in binary markets, but this YES/NO mechanism is used on a per-candidate basis (such that each 'answer' will resolve to either YES or NO). Again, only **one** of these outcomes is possible — so the winning candidate's YES share will resolve to $1 upon expiry, while the rest becomes valueless.
### How Are Answers Determined?
At present, Predict's outcomes are proposed by AI workflows and reviewed by our in-house team (based on trusted sources such as reputable news sites or official data sources) upon market resolution.
### What are Bond Markets?
Will Elon Musk twerk on the surface of Mars in 2026? Will DOGE flip BTC in market cap by the end of the month? Will the Cookie Monster be the first Sesame Street character to become US President?
Ask 99% of people, and the answer to these questions will be a resounding *NO*. Many would even consider these events not happening to be a certainty, and, therefore, any **NO** share trading at less than $1 to be free money.
As mentioned, the vast, vast majority of participants accept these events to be virtually impossible — but some outliers will buy very cheap **YES** shares in the same way they might purchase a lottery ticket.
We call these markets *bond markets*, as they provide an opportunity for ‘rational’ actors to earn a slight return by parking their funds in them until market expiry. For example, buying **NO** shares at $0.98 in a bond market would result in a $0.02 profit (effectively, a 2% yield) upon market resolution.
However, it’s worth noting that there’s **no such thing as a sure thing**. No matter how certain an outcome looks, there’s always a chance that it doesn’t pan out.
