> For the complete documentation index, see [llms.txt](https://docs.prophetmarket.ai/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.prophetmarket.ai/cancellation.md).

# Cancellation

*What happens when a market is voided, and why fifty cents is not a refund.*

Occasionally a market cannot be genuinely resolved. The question turns out to be irrecoverably ambiguous, the data source fails, or the real world event fits none of the stated outcomes. In those cases the market can be cancelled.

**On cancellation**

```
Every YES share  →  $0.50
Every NO share   →  $0.50
```

The same price regardless of which side you held or what you paid.

## Why you do not get back what you paid

This is the part most worth understanding, because the fifty cent outcome is frequently mistaken for a refund and it is not one.

Shares on Prophet are fungible on chain tokens. Once you buy a YES share it is indistinguishable from every other YES share in circulation. Neither the exchange contract nor the resolution contract records that a particular user paid seventy cents for a particular share. The chain tracks only how many YES and NO shares each Safe holds.

When shares are minted, exactly one dollar of USDC is deposited per YES and NO pair. Cancellation returns that dollar evenly to the two sides: fifty cents to whoever holds the YES and fifty cents to whoever holds the NO. It is not a reimbursement of your purchase price. It is a symmetric release of the collateral backing the shares, because the market never produced a winner to award it to.

## The practical effect

| You held | You paid | You receive | Result                |
| -------- | -------- | ----------- | --------------------- |
| YES      | 70¢      | 50¢         | Loss of 20¢ per share |
| NO       | 30¢      | 50¢         | Gain of 20¢ per share |
| YES      | 50¢      | 50¢         | Break even            |
| YES      | 5¢       | 50¢         | Gain of 45¢ per share |

*Cancellation is neutral on the collateral but not neutral on your entry price.*

The asymmetry is worth internalising. Buying an expensive side, which is to say a side the market considers likely, exposes you to more downside on cancellation than buying a cheap side. If you are trading a market whose wording strikes you as loose, that risk is not hypothetical.

{% hint style="info" %}
**The retry system exists to keep this rare**

The two day exponential backoff described in [Resolution](broken://pages/ef4265c9e8bb2591fc4149f12fcdb32dbcd212bd) is there specifically so that markets are given every reasonable chance to resolve properly before cancellation is considered. Cancellation is a last resort, not a routine path.
{% endhint %}

{% hint style="success" %}
**How to protect yourself**

Read resolution criteria before trading and be sceptical of questions that rely on subjective judgement, unnamed sources, or thresholds that are not precisely defined. Ambiguity in the wording is the leading indicator of cancellation risk.
{% endhint %}


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