# Prediction Market > Binary prediction market with YES/NO outcome tokens, liquidity pool trading, and vote-based settlement **Category:** Token Types ## Summary Required standards: \["Prediction Market"] * Binary prediction market: "Will X happen by Y?" Users deposit USDC to mint paired YES+NO tokens. Trade YES↔NO on a liquidity pool. Verifier settles by voting. Winner redeems 1:1. * Token ID 1 = YES, Token ID 2 = NO (via alias paths with 6 decimals) * mintEscrowAddress holds all deposited USDC * invariants: \`noForcefulPostMintTransfers: true\` — locks non-mint approvals (redeem, settlement, transferable) from using \`overridesFromOutgoingApprovals\` or \`overridesToIncomingApprovals\`. Non-mint approvals rely on \`defaultBalances.autoApproveSelfInitiatedOutgoingTransfers: true\` for outgoing-side auth and on the burn destination for incoming-side auth * All permissions frozen after creation * 7 approvals: paired mint, freely transferable, pre-settlement redeem, yes-wins, no-wins, push-yes, push-no * Alias paths for YES (token 1) and NO (token 2) with 6 decimals * Settlement via votingChallenges with 1-of-1 multisig verifier * Liquidity pool: MsgCreateBalancerPool with badgeslp:collectionId:uyes and badgeslp:collectionId:uno, equal weights * DON'T use Smart Token standard — this uses mintEscrowAddress, not invariant paths * DON'T forget votingChallenges on settlement approvals * DON'T set maxNumTransfers on mint/redeem (should be unlimited = 0) * DON'T forget to freeze all permissions * DON'T forget predeterminedBalances with BOTH token IDs in paired mint/redeem * DON'T set overrideFromWithApproverAddress on the deposit coinTransfer (filler pays, not escrow) ## Instructions ## Prediction Market Configuration ### Mental Model Binary prediction market: "Will X happen by Y?" Users deposit USDC to mint paired YES+NO tokens. Trade YES↔NO on a liquidity pool. Verifier settles by voting. Winner redeems 1:1. ### Collection Structure * Token ID 1 = YES, Token ID 2 = NO (via alias paths with 6 decimals) * Standard: 'Prediction Market' * mintEscrowAddress holds all deposited USDC * All permissions frozen after creation ### Alias Paths Two alias paths are REQUIRED — one for YES (token 1) and one for NO (token 2): ```json [ { "denom": "uyes", "symbol": "uyes", "conversion": { "sideA": { "amount": "1" }, "sideB": [{ "amount": "1", "tokenIds": [{ "start": "1", "end": "1" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] }] }, "denomUnits": [{ "symbol": "YES", "decimals": "6", "isDefaultDisplay": true }] }, { "denom": "uno", "symbol": "uno", "conversion": { "sideA": { "amount": "1" }, "sideB": [{ "amount": "1", "tokenIds": [{ "start": "2", "end": "2" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] }] }, "denomUnits": [{ "symbol": "NO", "decimals": "6", "isDefaultDisplay": true }] } ] ``` ### 7 Approvals **CRITICAL: All amounts in startBalances must be in BASE units (micro-units). Since YES/NO tokens have 6 decimals, 1 display token = 1,000,000 base units. Use "1000000" (not "1") for startBalance amounts when minting 1 display-YES + 1 display-NO per deposit.** #### 1. Paired Mint (deposit 1 USDC → receive 1 YES + 1 NO) ```json { "approvalId": "paired-mint", "fromListId": "Mint", "toListId": "All", "initiatedByListId": "All", "tokenIds": [{ "start": "1", "end": "2" }], "approvalCriteria": { "overridesFromOutgoingApprovals": true, "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "1", "end": "1" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] }, { "amount": "1", "tokenIds": [{ "start": "2", "end": "2" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "Mint", "overrideFromWithApproverAddress": false, "overrideToWithInitiator": false, "coins": [{ "amount": "1000000", "denom": "" }] }] } } ``` > **CRITICAL:** The `to` field MUST be `"Mint"`. The chain auto-resolves `"Mint"` to the collection's `mintEscrowAddress` at execution time for collection-level approvals. This ensures deposited USDC goes to the escrow (not the creator's wallet) and is available for redemption payouts. > > DO NOT use the creator's address or any hardcoded address — use `"Mint"` which auto-resolves to the escrow. Note: The deposit coinTransfer uses `to: "Mint"` with no overrides: initiator pays USDC → escrow (auto-resolved). The payout coinTransfers use `to: ""` with `overrideFromWithApproverAddress: true` (escrow pays) + `overrideToWithInitiator: true` (redeemer receives). #### 2. Freely Transferable (allows transfers between users, pools, DEX) ```json { "approvalId": "transferable", "fromListId": "!Mint", "toListId": "All", "initiatedByListId": "All", "tokenIds": [{ "start": "1", "end": "2" }], "approvalCriteria": { "overridesFromOutgoingApprovals": false, "overridesToIncomingApprovals": false, "mustPrioritize": false } } ``` > This approval has NO coinTransfers, NO votingChallenges, and mustPrioritize: false. It allows auto-scanning so tokens can be freely transferred to pool addresses and between users. #### 3. Pre-Settlement Redeem (burn 1 YES + 1 NO → 1 USDC from escrow) ```json { "approvalId": "pre-settlement-redeem", "fromListId": "!Mint", "toListId": "", "initiatedByListId": "All", "tokenIds": [{ "start": "1", "end": "2" }], "approvalCriteria": { "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "1", "end": "1" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] }, { "amount": "1", "tokenIds": [{ "start": "2", "end": "2" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "", "overrideFromWithApproverAddress": true, "overrideToWithInitiator": true, "coins": [{ "amount": "1000000", "denom": "" }] }], "maxNumTransfers": { "overallMaxNumTransfers": "18446744073709551615", "perFromAddressMaxNumTransfers": "0", "perToAddressMaxNumTransfers": "0", "perInitiatedByAddressMaxNumTransfers": "0", "amountTrackerId": "pre-settlement-redeem", "resetTimeIntervals": { "startTime": "0", "intervalLength": "0" } } } } ``` #### 4. YES Wins (burn YES → 1 USDC) ```json { "approvalId": "yes-wins", "fromListId": "!Mint", "toListId": "", "initiatedByListId": "All", "tokenIds": [{ "start": "1", "end": "1" }], "approvalCriteria": { "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "1", "end": "1" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "", "overrideFromWithApproverAddress": true, "overrideToWithInitiator": true, "coins": [{ "amount": "1000000", "denom": "" }] }], "maxNumTransfers": { "overallMaxNumTransfers": "18446744073709551615", "perFromAddressMaxNumTransfers": "0", "perToAddressMaxNumTransfers": "0", "perInitiatedByAddressMaxNumTransfers": "0", "amountTrackerId": "yes-wins", "resetTimeIntervals": { "startTime": "0", "intervalLength": "0" } }, "votingChallenges": [{ "proposalId": "yes-wins-proposal", "quorumThreshold": "100", "voters": [{ "address": "", "weight": "1" }] }] } } ``` #### 5. NO Wins (burn NO → 1 USDC) Same as YES Wins but with token ID 2, separate proposalId, and separate amountTrackerId: ```json { "approvalId": "no-wins", "fromListId": "!Mint", "toListId": "", "initiatedByListId": "All", "tokenIds": [{ "start": "2", "end": "2" }], "approvalCriteria": { "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "2", "end": "2" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "", "overrideFromWithApproverAddress": true, "overrideToWithInitiator": true, "coins": [{ "amount": "1000000", "denom": "" }] }], "maxNumTransfers": { "overallMaxNumTransfers": "18446744073709551615", "perFromAddressMaxNumTransfers": "0", "perToAddressMaxNumTransfers": "0", "perInitiatedByAddressMaxNumTransfers": "0", "amountTrackerId": "no-wins", "resetTimeIntervals": { "startTime": "0", "intervalLength": "0" } }, "votingChallenges": [{ "proposalId": "no-wins-proposal", "quorumThreshold": "100", "voters": [{ "address": "", "weight": "1" }] }] } } ``` #### 6. Push YES (burn YES → 0.5 USDC — fallback if market is indeterminate) ```json { "approvalId": "push-yes", "fromListId": "!Mint", "toListId": "", "initiatedByListId": "All", "tokenIds": [{ "start": "1", "end": "1" }], "approvalCriteria": { "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "1", "end": "1" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "", "overrideFromWithApproverAddress": true, "overrideToWithInitiator": true, "coins": [{ "amount": "500000", "denom": "" }] }], "maxNumTransfers": { "overallMaxNumTransfers": "18446744073709551615", "perFromAddressMaxNumTransfers": "0", "perToAddressMaxNumTransfers": "0", "perInitiatedByAddressMaxNumTransfers": "0", "amountTrackerId": "push-yes", "resetTimeIntervals": { "startTime": "0", "intervalLength": "0" } }, "votingChallenges": [{ "proposalId": "push-yes-proposal", "quorumThreshold": "100", "voters": [{ "address": "", "weight": "1" }] }] } } ``` #### 7. Push NO (burn NO → 0.5 USDC — fallback if market is indeterminate) Same as Push YES but with token ID 2 and a separate proposalId: ```json { "approvalId": "push-no", "fromListId": "!Mint", "toListId": "", "initiatedByListId": "All", "tokenIds": [{ "start": "2", "end": "2" }], "approvalCriteria": { "predeterminedBalances": { "manualBalances": [], "incrementedBalances": { "startBalances": [ { "amount": "1", "tokenIds": [{ "start": "2", "end": "2" }], "ownershipTimes": [{ "start": "1", "end": "18446744073709551615" }] } ], "incrementTokenIdsBy": "0", "incrementOwnershipTimesBy": "0", "durationFromTimestamp": "0", "allowOverrideTimestamp": false, "recurringOwnershipTimes": { "startTime": "0", "intervalLength": "0", "chargePeriodLength": "0" } }, "orderCalculationMethod": { "useOverallNumTransfers": true, "usePerToAddressNumTransfers": false, "usePerFromAddressNumTransfers": false, "usePerInitiatedByAddressNumTransfers": false, "useMerkleChallengeLeafIndex": false, "challengeTrackerId": "" } }, "coinTransfers": [{ "to": "", "overrideFromWithApproverAddress": true, "overrideToWithInitiator": true, "coins": [{ "amount": "500000", "denom": "" }] }], "maxNumTransfers": { "overallMaxNumTransfers": "18446744073709551615", "perFromAddressMaxNumTransfers": "0", "perToAddressMaxNumTransfers": "0", "perInitiatedByAddressMaxNumTransfers": "0", "amountTrackerId": "push-no", "resetTimeIntervals": { "startTime": "0", "intervalLength": "0" } }, "votingChallenges": [{ "proposalId": "push-no-proposal", "quorumThreshold": "100", "voters": [{ "address": "", "weight": "1" }] }] } } ``` ### Settlement Flow 1. Verifier sends MsgCastVote with 100% yes on the proposalId of the winning approval 2. Once quorum reached, that approval becomes active for transfers 3. Holders burn winning token to receive USDC from escrow ### Liquidity Pool After creating the collection and minting initial pairs: * Create pool: MsgCreateBalancerPool with badgeslp:collectionId:uyes and badgeslp:collectionId:uno, equal weights * Market price discovery: YES\_price = NO\_reserve / (YES\_reserve + NO\_reserve) ### Steps for AI Builder 1. Use per-field tools to initialize the collection (set\_standards, set\_valid\_token\_ids, etc.) 2. `set_token_metadata` for YES (token 1) and NO (token 2) 3. `set_invariants` with `{ "noCustomOwnershipTimes": true, "disablePoolCreation": false }` — MUST set disablePoolCreation to false 4. Add 7 approvals via `add_approval`: * `paired-mint`: Mint → All (deposit USDC, receive YES+NO). coinTransfer `to` MUST be `"Mint"` — the chain auto-resolves this to the collection's mintEscrowAddress at execution time. No overrides on deposit. * `transferable`: !Mint → All (free transfers between users/pools, NO coinTransfers, NO mustPrioritize, overridesFromOutgoingApprovals: false, overridesToIncomingApprovals: false) * `pre-settlement-redeem`: !Mint → burn (redeem pair for USDC). coinTransfer `to: ""` with `overrideFromWithApproverAddress: true` + `overrideToWithInitiator: true` (escrow pays redeemer). * `yes-wins`, `no-wins`, `push-yes`, `push-no`: settlement (vote-gated). Same payout pattern: `to: ""` with both overrides true. 5. `set_mint_escrow_coins` — NOT needed upfront (coins come from deposits) 6. Add alias paths via `add_alias_path` for YES and NO 7. `set_permissions` with preset `"fully-immutable"` to freeze everything (NOT "locked-approvals" — that leaves some permissions neutral) 8. After collection creation: mint initial pairs + create pool ### Common Mistakes * DON'T forget both alias paths (uyes and uno) * DON'T set the alias denom/symbol the same as the denomUnit symbol — the chain rejects duplicate denom unit symbols. Use base denoms like "uyes"/"uno" with display denomUnits "YES"/"NO" (6 decimals) * DON'T use Smart Token standard — this uses mintEscrowAddress, not invariant paths * DON'T forget votingChallenges on settlement approvals * DON'T set maxNumTransfers on the paired mint approval (deposits should be unlimited = 0) * DO set maxNumTransfers.overallMaxNumTransfers to "18446744073709551615" (max uint64) on ALL approvals that use overrideFromWithApproverAddress: true (redeem + settlement). The chain REQUIRES a non-zero maxNumTransfers when overrideFromWithApproverAddress is true. Use max uint64 for effectively unlimited. * DON'T disable overrideFromWithApproverAddress to work around maxNumTransfers errors — that breaks payout routing. Always keep overrideFromWithApproverAddress: true on redemption/settlement approvals and set maxNumTransfers to max uint64. * DON'T forget to freeze all permissions * DON'T forget predeterminedBalances with BOTH token IDs in paired mint/redeem * DON'T set overrideFromWithApproverAddress on the deposit coinTransfer (filler pays, not escrow) * DON'T leave the "to" field empty on the paired mint coinTransfer — use `"Mint"` which auto-resolves to the collection's mintEscrowAddress at execution time. * DON'T use the creator's address or any hardcoded address as "to" on the deposit — use `"Mint"` for auto-routing to escrow. * DON'T hardcode the creator address as the coinTransfer "to" on redemption/settlement — use overrideToWithInitiator: true so the person redeeming receives the payout * DON'T use "1" for startBalance amounts — YES/NO tokens have 6 decimals, so 1 display token = 1,000,000 base units. Use "1000000" for each startBalance amount. * DON'T use `set_permissions` preset "locked-approvals" — use "fully-immutable" to freeze ALL permissions including validTokenIds * DON'T use lowercase "prediction-market" as the standard — the correct name is "Prediction Market" (title case with space) * DON'T set invariants.disablePoolCreation to true — prediction markets REQUIRE liquidity pools for YES/NO trading. Set it to false.