Betting on Events

System Overview

The Basis Predict+ betting system represents a significant advancement in decentralized prediction markets. Through the combination of AMM-style pools, Stable+ token technology, and a robust multi-layered resolution process, the platform provides a fair, transparent, and efficient marketplace for event prediction.

The innovative resolution economic model, with its carefully designed fee structure and bond requirements, incentivizes accurate resolution while preventing manipulation. BASIS staker governance provides decentralized final arbitration, ensuring that disputes are resolved fairly and transparently.

By aligning incentives through the fee distribution model and providing multiple resolution pathways, the system creates a sustainable and trustworthy prediction market ecosystem that benefits all participants.

Key Components

Smart Contract Infrastructure: Automated execution of bets and payouts
AMM-Style Pool: Dynamic odds adjustment based on volume
Oracle System: Automated and community based outcome resolution
Dispute Mechanism: Bond-based challenge system with BASIS staker governance voting

Betting Phase Mechanics

Initialization

When a prediction event launches and completes its bonding phase, the betting phase automatically initiates with the following parameters:

All outcomes begin with equal odds (e.g., 50/50 for binary events)
Initial liquidity pools are established for each outcome
Betting is enabled using both Predict+ tokens, USDC or native Basis Tokens

Betting Process

Selection: User selects an event outcome to bet on
Currency Choice: User chooses to bet with Predict+ tokens, USDC or another native Basis Token
Amount Input: User specifies bet amount
Share Calculation: System calculates outcome shares based on current odds
Transaction Execution: Smart contract processes the bet and adjusts odds

Dynamic Odds Adjustment

Odds automatically adjust after each bet based on the volume distribution across outcomes.

This AMM-style mechanism ensures:

Market efficiency through volume-based price discovery
Protection against manipulation through algorithmic adjustment
Real-time reflection of market sentiment

Odds Calculation System

Core Formula

The system uses a constant product formula for price calculation:

Prediction Odds = Outcome USDC Pool / Total Event USDC Pool

This formula ensures that as more bets are placed on a specific outcome, its odds decrease (becomes more expensive), while other outcomes become more attractive (cheaper).

Buying Shares

When a user places a bet (buys shares), the calculation follows:

User inputs USDC amount or token amount
System calculates shares received based on current pool ratio
Pool rebalances, adjusting odds for next bet

Example: If Outcome A has 1000 USDC and Outcome B has 1000 USDC (50/50 odds), a 100 USDC bet on A would shift odds to approximately 52.4/47.6.

Selling Shares

Users can exit positions before event resolution by selling shares.

Selling outcome shares happens via a P2P order book — you choose your sell price, and another buyer fills it. There's no protocol-imposed cap on gains; the price you can realize depends entirely on what someone else is willing to pay.

The order-book exit lets users:

Cut losses if market sentiment shifts
Manage risk dynamically throughout the event lifecycle
Take profits before resolution if the market moves in your favor

Event Resolution Process

Fee Structure

The Predict+ platform charges fees at various stages of betting to incentivize accuracy and fund resolution:

Transaction Fees

Buy: 1.5% of transaction value (gross)
Sell: Sells happen via the P2P order book — there is no AMM sell-side fee; you and the buyer settle at your chosen price

Bettors who hold their position until event resolution do not pay a sell fee.

Fee Distribution

0.95% to the winning pot (accuracy incentive)
0.05% to the bounty pool (resolution incentive)
0.5% to Basis (primarily the creator and Share NFT holders)

Resolution Bond Requirements

Bonds and stake requirements are fixed canonical values:

Proposal bond: 5 USDB
Dispute bond: 5 USDB
Minimum stake to vote: 5 tokens

Resolution requires a 70% supermajority of staked voters to reach consensus.

Time-Based Creator Markets

For markets with predetermined resolution times, the following process applies. Canonical post-Phase-1 timing targets are listed below; Phase 1 currently uses 30-minute test values for all periods.

Resolution Timing (Post-Phase-1 Targets)

Proposal window: 2 hours
Dispute window: 24 hours
Voting window: 24 hours
Veto window: 1 hour
Consensus required: 70% supermajority of staked voters

Creator Resolution (Priority)

Creator has the 2-hour proposal window after time expiration to provide an outcome
If undisputed during the dispute window, creator receives the bounty pool and bond return

Community Resolution (Fallback)

If creator doesn't respond within the proposal window, a community member can propose the outcome by posting the 5 USDB proposal bond
If undisputed during the dispute window, the community proposer receives bounty and bond return

Dispute Process

Disputes can be raised within the 24-hour dispute window by posting the 5 USDB dispute bond and proposing an alternative outcome
Once disputed, BASIS staker governance votes to resolve within the 24-hour voting window and receives the bounty pool
Dispute winner: Receives loser's bond and retains their bond
Dispute loser: Forfeits their bond (distributed to the winner)

Final Veto

One hour following the staker vote, a community member may veto the vote outcome by posting a bond
A Basis admin will provide final resolution

Non-Time-Based Creator Markets

For markets without predetermined resolution times, resolution can occur through:

Resolution Options

Creator resolution
Community member

Resolution Process

Either the creator or community member can propose an outcome at any time by posting the 5 USDB proposal bond
If undisputed within the 24-hour dispute window, resolver receives bounty pool (bond returned if applicable)

Dispute Process

Disputes can be raised within the 24-hour dispute window by posting the 5 USDB dispute bond and proposing an alternative outcome
Once disputed, BASIS staker governance votes to resolve within the 24-hour voting window (70% supermajority required) and receives the bounty pool
Dispute winner: Receives loser's bond and retains their bond
Dispute loser: Forfeits their bond (distributed to the winner)

Private Creator Markets

A "private" event may be created where the creator is the sole resolver for the event outcome:

The creator, and up to 10 whitelisted wallets, are solely responsible for resolving the event.
There is no dispute process available and the creator designates the outcome.
In the case where multiple wallets (up to 10) are approved for resolution voting, the event will be considered resolved once a majority vote has been submitted.
- For example, a majority vote is reached when 6 out of 10 wallets vote "yes".

Basis is unable to verify the outcome of private event so event participants are trusting the creator to resolve accurately.

Basis-Created Markets

Markets created by Basis utilize automated resolution mechanisms for efficiency:

Automated Oracle Resolution

Chainlink: For objective, data-driven outcomes
AI-triggered data feeds: For subjective outcomes

Community Oracle Fallback

When automated oracles unavailable, community member can act as oracle by posting the 5 USDB proposal bond
Both automated and community proposals can be disputed within the 24-hour dispute window
Disputed resolutions escalate to BASIS staker governance voting within the 24-hour voting window (70% supermajority required)

Invalid Markets

Markets may be declared invalid by the creator or community member by posting a bond:

Invalid Market Declaration

An "invalid" outcome can be disputed by a community member by posting the 5 USDB dispute bond.
Once disputed, BASIS staker governance votes to resolve within the 24-hour voting window (70% supermajority required) and receives the bounty pool
Dispute winner: Receives loser's bond and retains their bond
Dispute loser: Forfeits their bond (distributed to the winner)

Invalid Market Resolution

All bettors receive full refund of their bet values
If undisputed, the bounty pool is distributed to the resolver
If disputed, the bounty pool is distributed to staked voters who voted
The accuracy incentive pool (0.95% fee) is distributed to the insurance fund
No winning or losing positions are declared

BASIS Staker Governance Voting Process

Staked voters serve as the final arbiter for disputed resolutions:

Voting Eligibility

Voters must hold a minimum stake of 5 tokens
Resolution requires a 70% supermajority of staked voters to reach consensus

Voting Timeline

Time-based markets: 24 hours to reach consensus
Non-time-based markets: 24 hours to reach consensus
Phase 1 currently uses 30-minute test values for all periods

Compensation

Staked voters receive a portion of the bounty pool

Payout Distribution

Winner Determination

Once the dispute window closes and the outcome is finalized through the resolution process, the system determines winners based on their bet positions matching the resolved outcome.

Payout Calculation Formula

Winners receive payouts calculated as follows:

Total Prize Pool = All USDC from losing outcomes + Accuracy Bonus

Individual Payout = (User's Winning Shares / Total Winning Shares) × Total Prize Pool

Claiming Process

Winners claim their payouts through the Basis dApp:

Navigate to the resolved event page
Click "Claim Winnings" button
Confirm transaction in wallet
Receive USDC directly to wallet

There is no time limit for claiming winnings. Payouts remain available indefinitely in the smart contract.

Example Payout Scenario

Event: "Will Bitcoin reach $100,000 by December 31?"

Total "Yes" pool: 10,000 USDC (40% of bets)

Total "No" pool: 15,000 USDC (60% of bets)

Outcome: Bitcoin reaches $100,000 ("Yes" wins)

Winner with 100 USDC bet on "Yes" receives: (100 / 10,000) × 25,000 = 250 USDC (2.5x return)

Risk Management

Stable+ Token Advantages

The use of Stable+ technology for Predict+ tokens provides unique risk management benefits:

Price Floor Protection: Tokens cannot decrease below floor price
Incentive Alignment: Fee structure encourages holding positions until resolution
Reduced Volatility: Up-only mechanics reduce panic selling

Resolution Security

The multi-layered resolution process provides robust security:

Bond requirements deter frivolous disputes
Economic penalties for incorrect resolutions
BASIS staker governance provides decentralized final arbitration
Multiple oracle sources reduce single point of failure

Peer-to-Peer Marketplace

The decentralized nature of the marketplace provides inherent risk mitigation:

No counterparty risk (smart contract holds all funds)
Transparent pool sizes and odds visible on-chain
Immutable betting records prevent manipulation
Automated execution eliminates human error