▸ PREDICTION MARKET INFRASTRUCTURE · CONVICTION-BASED

WHERE
TIME
DISCOVERS
TRUTH

Conviction Markets reward when you believe, not just how much you bet. The size of your conviction matters — but so does the moment you chose to believe.

CORE CONCEPTS
MARKET PARTICIPANTS

TWO TRADERS.
TWO EDGES.

⚡
TRADER TYPE 01
THE INSIDER

Enters late with privileged information. Knows the outcome before the crowd. In traditional markets, timing the entry just before resolution is the entire strategy.

THEIR EDGE
INFORMATIONAL

Asymmetric access to facts, data, or events not yet priced into the market. The edge is what they know, not when they believed.

▸Enters near settlement when outcome is clearer
▸Pays the highest conviction fee for the smallest reward slice
▸Capital size amplified — but conviction pool share is not
* Last epoch conviction fee is as low as 0.5% — late entry is never penalised. The market simply rewards those who believed first.
◎
TRADER TYPE 02
THE BELIEVER

Enters early based on reasoning, research, and genuine conviction. No privileged access — just a formed view taken before the crowd arrived and held through uncertainty.

THEIR EDGE
BELIEF

A formed view taken early and held with conviction. The edge is when they committed — and the strength of staying the course through uncertainty.

▸Enters in early epochs when outcome is uncertain
▸Pays the lowest conviction fee for the largest reward slice
▸Position size still matters — conviction multiplies it

Conviction Markets don't exclude either — they simply ensure that the timing and strength of your belief is rewarded alongside the size of your position. The earlier you commit, the greater your conviction multiplier.

MECHANISM FLOW

HOW CONVICTION MARKETS WORK

⬡
STEP 1 — MARKET CREATED
Platform or community deploys a market with defined epochs and conviction fee schedule.
THE PARADIGM SHIFT

CONVICTION
WITH CAPITAL

✕ TRADITIONAL MARKETS
Rewards = f(Capital)
✓ CONVICTION MARKETS
Rewards = f(Capital × Time × Consistency)
▸ Early believers earn disproportionate rewards
▸ Active traders compound the reward pool for holders
▸ 1 share held with conviction beats 1000 held without
REWARD BY EPOCH — BELIEVE EARLIER, EARN MORE

EARLIER =
LARGER REWARD

Epoch 1$2,000 each · 40%
Epoch 2$500 each · 25%
Epoch 3$187 each · 15%
Epoch 4$167 each · 10%
Epoch 5+$83 each · 10%
⚡ Epoch 1: $1 fee → $2,000 reward = 2000× ROI

* Illustrative example only. Actual epoch weights, pool sizes, and per-trader payouts are subject to market parameters, participation levels, and testnet calibration. Practical results may vary.

THEORETICAL FOUNDATION

BELIEF DYNAMICS
MARKET THEORY

OPEN INFRASTRUCTURE

PERMISSIONLESS
PREDICTION MARKETS

Most "permissionless" platforms fill up with spam, duplicates, and low-effort questions. Centralised curation fixes this — but kills openness. Conviction Markets takes a different approach.

THE CORE PRINCIPLE

Permissionless creation with economic accountability.

Every market begins as a proposal, not a live market. The creator posts a bond — not as a fee, but as a signal. It says: I checked for duplicates, I defined clear resolution criteria, I thought through the question. The bond is returned if approved. It exists solely to punish laziness, not creativity.

⬡
MECHANIC 01
PROPOSAL BOND

Every market starts as a proposal. The creator stakes a bond returned on approval. This single requirement eliminates spam — effort is required before a market can exist.

⚖️
MECHANIC 02
CHALLENGE WINDOW

During the proposal window, anyone can challenge by staking a dispute bond. Challenges claim duplication or structural misplacement. Correct challengers are rewarded — research is incentivised, not voluntary.

🔀
MECHANIC 03
GRADUATED OUTCOMES

Not all mistakes are equal. A duplicate market? Creator bond is slashed, challenger paid. A misplaced but valid question? Rerouted as a submarket — creator keeps credit, reputation, and a reduced fee share. Honest mistakes are corrected, not punished like fraud.

◎
MECHANIC 04
LIFETIME FEE SHARE

Once a market goes live, the creator earns a small percentage of trading fees for its entire lifetime. Market creation becomes ongoing stewardship — creators are incentivised to design markets people actually want to trade.

THE RESULT
→
DUPLICATES ARE IRRATIONAL
Economic cost removes the incentive entirely
→
CURATION IS REWARDED
Research and flagging earn real returns
→
SUBMARKETS EMERGE NATURALLY
Liquidity consolidates instead of fragmenting
→
NO CENTRAL AUTHORITY
No entity decides what you're allowed to predict on

Permissionless does not have to mean unstructured. With the right incentives, structure emerges organically — maintained by the same people who trade, research, and care about the markets themselves.

TRUST BY DESIGN

RULES WRITTEN
IN STONE

Once a prediction market graduates, its rules are locked forever. No edits. No reinterpretation. No platform interference. The market you entered is the market that settles.

HUMAN-READABLE RULES
Resolution criteria: objective & verifiable
Settlement date & evidence source defined
Edge cases & dispute conditions declared
Epoch structure & conviction fee curve set
⬡
MARKET
GRADUATES
→
ON-CHAIN HASH · IMMUTABLE
0x8f3a2c1d9e4b7f06
a5d2e8c3f1b9a4e7
d6c2f8a1b3e5d9c4
Verified · Locked · Permanent
Any change to the rules produces a different hash. Tampering is immediately detectable by anyone.
⊕
SIMPLE LANGUAGE

Rules are written in plain, unambiguous language before hashing. Anyone can read them. No legal jargon, no hidden clauses.

◎
VERIFIABLE ON-CHAIN

The hash is published on-chain at graduation. Any participant can verify the rules at any time by comparing the hash to the original document.

The rules you read when entering a market are the rules that govern its settlement. No platform, no operator, and no dispute can rewrite them retroactively. Trust is built into the structure — not promised by the team.

TRUST ARCHITECTURE

TWO-STAGE
RESOLUTION

No centralised oracle. No single point of failure. Resolution is handled by staked community voters with verifiable randomness — making coordination attacks structurally impossible.

⬡
STAGE 01
RESOLUTION LOTTERY

The standard resolution path. A jury is formed from Solana token stakers. Votes are cast — then a random subset is selected using verifiable randomness to determine the outcome.

01
STAKE TO JOIN JURY
Solana token holders stake to become eligible voters. Skin in the game ensures accountability.
02
ALL VOTES CAST
Every eligible voter submits their resolution vote. Full participation — but not all votes will count.
03
RANDOM SUBSET SELECTED
Verifiable on-chain randomness picks which votes actually count. No voter knows in advance if their vote is selected.
04
TRUTH VERIFIED · VOTES CHECKED
Each selected vote is checked against verified truth. Voters who voted against truth are slashed. Honest voters are rewarded.
WHY COORDINATION IS IMPOSSIBLE
Even if voters conspire, they cannot know whether their vote enters the final count. Manipulating the outcome requires controlling the verifiable randomness itself — which is cryptographically infeasible.
DISPUTE
TRIGGERED
→
◎
STAGE 02 · DISPUTE ONLY
SCHELLING POINT

Triggered only when a resolution is disputed. Voters independently converge on the "obvious" answer without any coordination — a natural focal point emerges from honest reasoning alone.

01
DISPUTE RAISED
A participant challenges the Stage 1 outcome. A bond is posted to prevent frivolous disputes.
02
INDEPENDENT VOTING
A fresh voter pool casts votes in isolation. No communication. No coordination. Each voter reasons purely from available evidence.
03
FOCAL POINT EMERGES
Honest voters naturally converge on the same answer — the Schelling Point. The majority answer wins without any explicit agreement.
04
FINAL · NO APPEALS
Stage 2 is the final authority. Voters who aligned with the majority are rewarded. Outliers are slashed. The dispute bond is forfeited if the challenge fails.
THE GAME THEORY
The optimal strategy for every voter is to vote honestly — because if you vote with the minority, you lose your stake. This creates a self-reinforcing mechanism where truth always has the dominant strategy.

Stage 1 handles all standard resolutions. Stage 2 activates only on dispute — and its verdict is final. Together they eliminate centralised oracle risk without sacrificing resolution speed or accuracy. No single entity decides the truth.

THE CONVICTION THESIS · BDMT
"Truth" is a subset of "beliefs". In prediction markets, it is revealed only at settlement. Informational value lies in the dynamics of conviction over time.
— Dinkar Dogra · NVISION · Conviction Markets v1.0