> 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/core-concepts/shares-and-the-invariant.md).

# Shares and the invariant

*One dollar equals one YES plus one NO, and everything that follows from it.*

Shares are the unit of everything on Prophet. Understanding how they are created and what backs them explains pricing, payouts and the fifty cent outcome on a voided market without needing any further rules.

**The invariant**

```
$1.00  =  1 YES  +  1 NO
```

Exactly one dollar of USDC collateral backs every YES and NO pair in existence.

## How shares come into existence

Shares are not issued by Prophet from a fixed supply. They are minted in pairs when a dollar of collateral is deposited against a market. One YES and one NO are created together and go to the respective sides. That is why the two prices are bound to each other and why the pair always represents one dollar.

| Event         | YES share value | NO share value | Total   |
| ------------- | --------------- | -------------- | ------- |
| While trading | Market price    | Market price   | \~$1.00 |
| Resolved YES  | $1.00           | $0.00          | $1.00   |
| Resolved NO   | $0.00           | $1.00          | $1.00   |
| Voided        | $0.50           | $0.50          | $1.00   |

*The pair sums to a dollar in every possible end state. Only the split changes.*

## Shares are fungible tokens

Your shares are on chain tokens, and one YES share is indistinguishable from every other YES share in that market. The chain records how many YES and NO shares each Safe holds. It does not record what any individual share cost.

That single technical fact has a consequence people find surprising, so it is worth stating here rather than leaving it to the cancellation page: because the chain has no memory of your purchase price, a voided market cannot return what you paid. It can only release the collateral evenly.

{% hint style="info" %}
**Holding both sides is allowed**

You can hold YES and NO in the same market at the same time and they are treated as two independent positions. This is intentional, and it is how you hedge an existing position without closing it.
{% endhint %}

## Redemption

After a market resolves and the review window closes, winning shares are redeemed for USDC that lands in your Safe. Each winning share converts to one dollar and each losing share converts to nothing.

**Redemption**

```
100 winning shares  →  $100.00 USDC
```

Delivered to your Safe on Polygon.

{% hint style="warning" %}
**Unredeemed shares earn nothing**

Winning shares do not expire. They sit in your Safe and remain redeemable indefinitely. They also stop doing anything useful the moment the market resolves, so there is no reason to leave them. Redeem when you can.
{% endhint %}


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