How to Make a Prediction

This page walks through what happens when you forecast on Precog, from finding a market to collecting your winnings.

Step 1: Find a Market

Browse open markets on Precog Core. Each market shows:

• The question being asked
• The current probability of each outcome (e.g., “Outcome A: 45% / Outcome B: 35% / Outcome C: 20%”)
• The closing date (after this, no new positions can be taken)
• The collateral token used (e.g., ETH, USDC)

Markets on Precog support multiple outcomes, not just Yes/No. A market might ask which candidate will win an election, which team will win a tournament, or which option a DAO should choose — with each option showing its own probability.

The probability shown is not just a display number; it is the market’s current price. Buying “Outcome A” at 45% means you’re paying 0.45 tokens per share. If Outcome A wins, each share pays out 1 token.

Step 2: Form Your View

Before buying, decide whether you think any outcome’s price is too low or too high.

• If the market prices Outcome A at 20% but you think it’s closer to 45%, buying Outcome A is good value
• If the market prices Outcome B at 60% but you think it’s closer to 30%, buying one of the other outcomes is good value

In a multi-outcome market, you can also spread positions across several outcomes if you think the market is mispricing more than one. You don’t need to be right about the exact probability; you just need the market to be wrong in the direction you’re betting on.

See Forecasting 101 for techniques to sharpen your estimates.

Step 3: Buy Outcome Shares

Don’t have funds yet? See Getting Funds onto Precog to bridge or onramp before continuing.

Select the outcome you want to back and enter an amount. The interface will show you:

• How many shares you’ll receive
• The effective price per share (the implied probability you’re paying)
• The price impact: larger trades move the curve and cost more per share

Confirm the transaction in your wallet. Your outcome shares are now held onchain.

The price you pay reflects the curve at the moment you trade. If others buy the same outcome after you, the price rises. If they buy the other side, it falls. Your shares keep the price you locked in.

Step 4: Track Your Position

After buying, your position appears in your portfolio. You can see:

• Which outcome you hold shares in
• How many shares
• The current market probability vs. your entry price
• Unrealized gain or loss based on current prices

Step 5: Wait for Resolution (or Sell Early)

If you hold until the market closes:

• If your outcome wins, each share pays out 1 token
• If your outcome loses, your shares are worth 0

If you want to exit early:

• You can sell your shares back to the curve at the current market price
• This locks in a gain if the probability moved in your direction, or limits a loss if it moved against you

Risks

• You can lose your full position. If the outcome you backed does not win, your shares pay out nothing. There is no partial payout for being “close.”
• Price impact on large trades. The LS-LMSR curve means large buys shift the price against you. Check the price impact before confirming big trades.
• Smart contract risk. As with all onchain protocols, bugs in the contracts are a possibility.

After Resolution

Once the market resolves (see Resolution), winning shares become redeemable. If funds haven’t been automatically distributed yet, go to your portfolio and claim your own winnings directly.

Funds go straight to your wallet onchain.