Understand the purpose, structure, and role of FORS in the prediction market ecosystem.
Prediction markets trade expectations rather than assets. Each contract represents a future outcome, and its price reflects the market’s current confidence that the outcome will occur. A probability of 0.62 means participants collectively estimate a 62% likelihood at that moment, so prices update continuously as beliefs change instead of converging toward intrinsic value.
Independent Venues
There is no single global prediction market. Every platform operates with its own participants, liquidity, and activity patterns, causing the same event to trade at different probabilities across venues. A price therefore represents local consensus inside that environment rather than a universal expectation.
Information Flow
New information reaches traders unevenly. Some markets react immediately while others adjust gradually depending on who trades there and how active they are. Multiple probabilities can therefore coexist for the same event without any being invalid.
Liquidity Meaning
Displayed price and executable price are not identical. A market capable of absorbing large size expresses stronger confidence than one that moves instantly when traded, meaning probability is defined not only by price but by the capital supporting it.
Market of Markets
Since each venue reflects only a partial view, the broader expectation of an event emerges from observing many markets together. The ecosystem effectively forms a higher-level market composed of independent belief sources rather than a single shared order book.
