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Markets

There are two market types deployed by Outcome:
  1. Leverage Prediction Markets
  2. Leverage Financial Markets: Stocks, Commodities, Forex, Indices, and more.

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Market Specifications

Outcome deploys two distinct categories of leveraged markets, each utilizing specialized oracle architectures and settlement mechanics to ensure fair pricing and robust liquidity.
  1. Leveraged Prediction Markets
These markets allow traders to take leveraged positions on binary events. The pricing engine seamlessly maps binary probabilities to a tradable long/short structure.

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Oracle Architecture:

Outcome utilizes a custom weighted oracle to derive a fair mark price, dynamically weighting underlying prediction market contracts to filter noise and manipulation.

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Market Structure (Long/Short):

Contracts function as binary derivatives:
  • Long Position (Buy): Equivalent to betting “Yes.” Price p represents the probability of the event occurring (0<p<10 < p < 1).
  • Short Position (Sell): Equivalent to betting “No.” Price 1-p represents the probability of the event not occurring.

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Funding Dynamics:

The funding rate multiplier is currently initialized at 1x to align perp prices with spot probabilities. This parameter is dynamic and may be adjusted based on market volatility and open interest velocity.

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Resolution & Settlement:

Market resolution follows the standard Outcome Spot data verification process Event Resolution. Once the resolution data is confirmed, the protocol executes the haltTrading action:
  • Cancels all open orders
  • Settles all positions to the current mark price
  1. Leveraged Financial Markets
These markets provide exposure to traditional financial assets (e.g., US Large Cap Index, Commodities) using a crypto-native settlement layer. We prioritize Futures data over Spot data to maximize trading hour coverage.
  • Oracle Strategy (Futures-First): Outcome sources price data from high-frequency external futures oracles. This ensures uptime during pre-market and after-hours sessions where spot feeds often go dark.
  • Price derivation (Spot-Futures Parity): To generate a synthetic Spot Oracle Price from the futures feed, we apply the Spot-Futures Parity model. -During Market Hours: External Futures Oracle → Spot-Futures Parity Calculation → Spot Price → Oracle Relayer (provides an update every 3 seconds).
    • Out-of-Market Hours: The system switches to an Internal Oracle via IPD (Internal Price Discovery) to maintain continuous pricing integrity.

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The Valuation Formula:

S=Fe−(r−q)TS = F e^{-(r - q)T} where:
  • S (Spot Price): The derived fair value of the asset on Outcome.
  • F (Futures Price): The raw price received from the external futures oracle.
  • r (Risk-Free Rate): The theoretical return of an investment with zero risk (typically derived from SOFR).
  • q (Cost of Carry/Yield): Dividends or convenience yield associated with holding the asset.
  • T (Time to Maturity): The time remaining until the futures contract expires.
  • e: Euler’s number (mathematical constant ~2.718).
This formula “discounts” the futures price back to the present moment, stripping away the time-value premium to give traders an accurate Spot price representation.

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Oracle Failover & Internal Price Discovery

If the external oracle becomes unavailable, the protocol ensures 100% uptime by switching to an internal valuation model. This system synthesizes a continuous Mark Price using Impact Price Difference (IPD), an EMA-based adjustment derived from real-time order book liquidity For full technical specifications, please refer to the Oracle section.

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The Funding Formula

To ensure the Outcome mark price remains tethered to the external spot price, the protocol enforces a periodic Funding Rate. This is a peer-to-peer exchange of value between long and short traders—Outcome does not collect fees from funding. The Funding Rate (F) is calculated continuously and settled every hour. F=P+clamp⁡(I−P,0.05%,−0.05%)F = P + \operatorname{clamp}(I - P, 0.05\%, -0.05\%) Where:
  • P (Premium Index): Measures the deviation between the contract’s Mark Price and the underlying Spot Oracle Price.
  • I (Interest Rate Component): Fixed at 0.01% per 8 hours (0.00125% hourly). This accounts for the USD/USDT interest rate differential.
  • clamp: A dampening function that reduces volatility. If the Premium Index is within ±0.05$ of the Interest Rate, the Funding Rate equals the Interest Rate.

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    Component Calculations

    1. Premium Index (P):
    The premium is calculated by comparing the Impact Margin Notional against the Oracle Price. This filters out temporary order book imbalances. P=max⁡(0, Impact Bid−Oracle)−max⁡(0, Oracle−Impact Ask)Oracle PriceP = \frac{ \max(0,\ \text{Impact Bid} - \text{Oracle}) - \max(0,\ \text{Oracle} - \text{Impact Ask}) }{ \text{Oracle Price} }
    • Impact Bid/Ask: The average execution price for a standardized notional position (e.g $1,000 USDT) on the order book.
    • Oracle Price: The verified external price feed.
    1. Settlement:
    Funding payments are exchanged at the start of each hour.
    • Positive Rate (F > 0): Longs pay Shorts. (Market is bullish; perp price > spot price).
    • Negative Rate (F < 0): Shorts pay Longs. (Market is bearish; perp price < spot price).
    Payment=Position Size×Oracle Price×Funding Rate\text{Payment} = \text{Position Size} \times \text{Oracle Price} \times \text{Funding Rate}

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    Market Hours Adjustment

    Funding is strictly enforced only when the underlying asset is active.
    • During Market Hours: The Funding Rate is calculated dynamically based on the formula above.
    • Out-of-Market Hours: The Funding Rate is automatically set to 0. Since the underlying asset is not actively trading or updating, no premium is paid during market closures.