Betting on Events

System Overview

The Basis Predict+ prediction system combines a modified pari-mutuel pool, Stable+ token technology and a multi-layered resolution process to give a transparent, efficient marketplace for event prediction.

The resolution model, with its bond requirements, rewards accurate resolution and makes manipulation costly. Disputes are settled by a vote of staked voters (BASIS stakers after TGE), with a veto that escalates to Basis as the last resort.

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

  1. Smart Contract Infrastructure: automated execution of predictions and payouts
  2. Modified Pari-Mutuel Pool: all stakes merge into one pot; odds adjust with volume; up to 150 outcomes per market
  3. Oracle System: automated and community-based outcome resolution
  4. Dispute Mechanism: bond-based challenge system with staked-voter voting

Betting Phase Mechanics

Initialization

When a prediction event launches and completes its reward 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
  • Predictions can be placed with USDB (USDG at launch), Predict+ tokens or other native Basis Tokens

Prediction Process

  1. Selection: user selects an event outcome
  2. Currency Choice: user chooses USDB (USDG at launch), Predict+ tokens or another native Basis Token
  3. Amount Input: user specifies the amount
  4. Share Calculation: System calculates outcome shares based on current odds
  5. Transaction Execution: the smart contract processes the prediction and adjusts odds

Dynamic Odds Adjustment

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

This pool 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 pool prices each outcome by its share of the pot:

Prediction Odds = Outcome Pool / Total Event Pool

As more money goes on a specific outcome, it becomes more expensive, while other outcomes become cheaper.

Buying Shares

When a user makes a prediction (buys shares), the calculation follows:

  1. User inputs a USDB (USDG at launch) or token amount
  2. System calculates shares received based on the current pool ratio
  3. The pool rebalances, adjusting odds for the next prediction

Example: if Outcome A has 1,000 USDB and Outcome B has 1,000 USDB (50/50 odds), 100 USDB 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

Transaction Fees

  • Buy: from the Robinhood Chain launch, the 0.60% base fee plus any creator fee (1.5% during testing on BNB Chain)
  • Sell: sells happen via the P2P order book: there is no sell-side pool fee; you and the buyer settle at your chosen price

Holders who keep their position until resolution do not pay a sell fee. The fee split is described in Transaction Fees.

Resolution Bond Requirements

Current values (shown in the dapp, subject to change):

  • 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, the creator's bond is returned

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's bond is returned

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, staked voters vote to resolve within the 24-hour voting window
  • Dispute winner: receives the loser's bond and keeps their own
  • Dispute loser: forfeits their bond (paid to the winner)

Veto

  • Within one hour of the vote, anyone may veto the vote outcome by posting a bond (one veto per market)
  • A veto escalates the market to Basis for final resolution; after TGE this role moves to BASIS staker governance

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, the resolver's bond is returned

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, staked voters vote to resolve within the 24-hour voting window (70% supermajority required)
  • Dispute winner: receives the loser's bond and keeps their own
  • Dispute loser: forfeits their bond (paid 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

  • AI resolver: Proposes most outcomes within hours
  • Second AI auditor: independently audits the proposed outcome: two bonded judges accountable to each other
  • Chainlink: For objective, data-driven outcomes
  • AI-triggered data feeds: For subjective outcomes

Humans are the appeals layer: disputed AI proposals escalate to a vote of staked voters.

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 a vote of staked voters 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, staked voters vote to resolve within the 24-hour voting window (70% supermajority required)
  • Dispute winner: receives the loser's bond and keeps their own
  • Dispute loser: forfeits their bond (paid to the winner)

Invalid Market Resolution

  • All participants receive a full refund of their stakes
  • Bonds are returned to correct resolvers and forfeited by incorrect ones, as in any other dispute
  • No winning or losing positions are declared

Staked-Voter Voting Process

Staked voters decide disputed resolutions (BASIS stakers after TGE):

Voting Eligibility

  • Voters must hold a minimum stake of 5 tokens; one staker, one vote
  • 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 on the correct side share the market's resolution bounty; the bonds go to the correct proposer or disputer

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 positions matching the resolved outcome.

Payout Calculation Formula

Winners split the whole pot:

Total Prize Pool = everything staked on the market, winning and losing outcomes together

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

Claiming Process

Winners claim their payouts through the Basis dApp:

  1. Navigate to the resolved event page
  2. Click "Claim Winnings" button
  3. Confirm transaction in wallet
  4. Receive the payout directly to your wallet (USDB during testing, USDG at launch)

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 USDB (40% of the pot)

Total "No" pool: 15,000 USDB (60% of the pot)

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

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

Risk Management

Stable+ Token Advantages

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

  • Price Floor: token price cannot decrease. This is contract-enforced.
  • Incentive Alignment: no sell-side pool fee means holding to resolution costs nothing extra
  • 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
  • Staked voters settle disputes, with a veto that escalates to Basis as the last resort
  • 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