Prediction Markets: How They Work

Prediction Markets

CoinExchange.Cash hosts a non-custodial prediction market where users can trade on the outcomes of real-world events.

How It Works

1. Markets are created around binary questions (e.g., "Will BTC exceed $100K by December 2026?")
2. Users buy shares — YES shares pay out if the event happens, NO shares if it does not
3. Prices reflect probability — if YES shares trade at $0.70, the market estimates a 70% chance
4. Resolution — when the event outcome is known, winning shares pay $1.00

Pricing Model

CoinExchange.Cash uses a pool-based pricing model where the price of YES/NO shares is determined by the ratio of funds in each outcome pool. As more users buy YES shares, the price increases.

Market Categories

• Crypto — price targets, protocol launches, ETF approvals
• Politics — election outcomes, policy decisions
• Sports — game outcomes, tournament winners
• Economics — interest rates, GDP, inflation data
• Science & Technology — product launches, discoveries
• Culture — award shows, viral events

Risk Warning

Prediction markets involve risk. You can lose your entire position if the outcome goes against you. Only trade with funds you can afford to lose.