Concepts
Decision markets
PASS and FAIL copies, two pools and the time-weighted verdict.
A decision is priced by two markets on the fund's own shares: one in the world where the proposal runs, one in the world where it doesn't. Whichever world the market values the fund higher in decides.
PASS and FAIL copies
Each proposal has two kinds of collateral, fund shares and USDC, and each splits into a pair of copies:
pays 1 USDC if the action runs
pays 1 USDC if it doesn't
- Split turns one unit into one PASS copy and one FAIL copy. It is open while the proposal is a draft or trading.
- Merge turns one PASS and one FAIL copy back into one unit, at any time before the decision settles.
- Redeem, after the decision settles, turns each copy of the winning side back into one unit. PASS wins only if the route was executed; in every other outcome FAIL wins.
A pair always redeems for exactly what was split, so copies never create or lose collateral.
The two pools
PASS pool
PASS sharesPASS USDC
Its price is what a fund share is worth if the action runs.
FAIL pool
FAIL sharesFAIL USDC
Its price is what a fund share is worth if it doesn't.
PASS time-weighted price > FAIL time-weighted price × (1 + margin)
The PASS pool trades PASS shares against PASS USDC; the FAIL pool trades FAIL shares against FAIL USDC. Each is a constant-product pool with a 0.30 % trading fee that stays in the pool for its liquidity providers. A pool's price is the USDC per share in its world.
Both pools must open at exactly the same price, each with at least the configured minimum depth, before trading can start. Liquidity is locked from the start of trading until the decision settles.
The time-weighted verdict
Every second of the window counts the same. Each pool keeps a running sum of its price multiplied by the seconds it held, updated before each trade with the reserves as they stood, and stopped at the close. A trade moves the price from that moment on; it can't change what earlier seconds were worth.
At the close the program compares the two sums directly:
PASS sum × 10,000 > FAIL sum × (10,000 + margin in bps)
If it holds, the proposal passes. Comparing the exact sums means no rounding of either average can tip the result. The app shows the averages, the time-weighted lead, for reading.
Reading the line
On a decision's page, the market's line runs through the proposal's words while it trades. Its height is PASS's lead over FAIL against the fund's margin: through the middle of the words means no lead; the dotted line under them is a lead equal to the margin. When the decision lands, the line settles under the words if the route ran, and through them if nothing ran.
Why trading decides
If you think the move will make the fund worth more, a PASS share is worth more to you than the PASS pool's price: buy PASS. If you think it will make the fund worth less, buy FAIL, or sell PASS. Your copies of the losing side are worth nothing at settlement and your copies of the winning side redeem one for one, so the prices that hold up are the ones people are willing to back.