> 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/resources/glossary.md).

# Glossary

*Every term used in this documentation, defined once.*

## Market mechanics

**Prediction market**

A market where you buy and sell shares in the outcome of a future event, and the price expresses the probability of that outcome.

**YES share**

A share that pays one dollar if the event happens and nothing if it does not.

**NO share**

The mirror of a YES share. Pays one dollar if the event does not happen.

**The invariant**

One dollar equals one YES share plus one NO share. Every pair is fully backed by a dollar of collateral.

**Midpoint**

The fair price of a market, sitting between the buy and sell prices.

**Spread**

The gap between the price to buy and the price to sell. This is how Prophet earns, and it is already inside the quoted prices.

**Resolution criteria**

The rules that determine a market's outcome, including the authoritative source. These govern, not the market title.

**Cancellation**

A market that cannot be resolved is voided, and every share on both sides redeems for fifty cents. This is a symmetric release of collateral, not a refund of what you paid.

## Orders and positions

**Limit order**

An order to trade at your named price or better. Rests until filled or cancelled.

**Market order**

An order to trade immediately at the best available price.

**Maker**

Your order rested first and someone traded against it later. You provided liquidity.

**Taker**

Your order crossed an existing order and filled immediately. You consumed liquidity.

**Price time priority**

Best price fills first. Among equal prices, the older order fills first.

**Partial fill**

Part of your order has executed and the remainder is still resting at your price.

**Redemption**

Converting winning shares into USDC at one dollar per share after resolution.

## Wallet and chain

**Polygon**

The blockchain network Prophet settles on. Prophet pays the gas, so you never need to hold its native token.

**USDC**

The dollar denominated stablecoin used as collateral for every market.

**Gnosis Safe**

The smart contract wallet that holds your USDC and your shares. It is owned by you, not by Prophet.

**Embedded wallet**

A wallet created for you when you sign in with email or Google, with the key held in a secure enclave and gated by your login. No seed phrase.

**Externally owned account**

A wallet you already control, such as MetaMask or Coinbase Wallet, which you connect to Prophet.

**Conditional Tokens Framework**

The on chain standard that represents outcome shares as tokens and handles collateral and payouts.

**Gas**

The network fee for an on chain action. Prophet absorbs all Polygon gas on your behalf.

## Resolution

**Ensemble**

The group of models that evaluate a market's outcome and are cross checked against each other. Agreement at high confidence is required to proceed.

**Three hour buffer**

The wait after a market's resolution time before resolution begins, so sources have time to publish confirmed outcomes.

**Exponential backoff**

The retry loop the ensemble enters when it cannot reach a confident answer, running at growing intervals for up to about two days.

**Review window**

The twelve hour on chain cooldown between an outcome being posted and payouts becoming claimable. Enforced by contract and not overridable by Prophet.

**Manual resolution**

Human review by the Prophet team when the retry window closes without a confident answer.


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