Everything you need to know about prediction markets and trading on Probily
Prediction markets are exchange-traded markets where participants buy and sell contracts based on the outcomes of future events. Unlike traditional betting, prediction markets use continuous double auctions — similar to stock exchanges — to discover the probability of events in real time. Each contract trades between $0.01 and $0.99, representing the market's consensus probability. When the event occurs, winning contracts pay $1.00 and losing contracts pay $0. The price of a contract at any moment reflects the crowd's best estimate of the probability of that outcome. For example, if a contract asking "Will Bitcoin exceed $150K by December 2026?" trades at $0.42, the market collectively estimates a 42% probability.
Prediction markets are information aggregation tools. Unlike casino games with fixed odds, prediction market prices continuously update based on new information from informed participants. Academic research from institutions including MIT, Wharton, and the University of Chicago has shown that prediction markets produce more accurate forecasts than polls, expert panels, and statistical models across domains including politics, economics, technology, and sports.
Hedge funds use them for risk assessment. Journalists reference them for real-time probability estimates. Corporations use internal prediction markets for project forecasting. Researchers study them for information aggregation. Individual traders use them to profit from superior knowledge and analysis.
Prediction markets operate under various regulatory frameworks globally. In the US, platforms like Kalshi are regulated by the CFTC as Designated Contract Markets. Crypto-native platforms like Polymarket operate on decentralized infrastructure. Probily uses on-chain settlement on Polygon for transparency and verifiability.
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