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How Prediction Markets Work

What is a Prediction Market?

A prediction market is a platform where you can trade shares on the outcome of real-world events. Each market poses a question — like "Will Bitcoin exceed $100K by December 2026?" — and lets you buy YES or NO shares based on what you think will happen.

Share prices range from $0 to $1 and reflect the crowd's collective estimate of the probability. A YES price of $0.73 means the market thinks there's a 73% chance the event occurs. When the event resolves, winning shares pay $1 and losing shares pay $0.

Prediction markets are powerful because they aggregate information from many participants into a single, easy-to-read probability. Research shows they often outperform polls, pundits, and individual experts at forecasting.

How Pricing Works

Open Whale uses an automated market maker called LMSR (Logarithmic Market Scoring Rule). Unlike a traditional order book, LMSR always offers a price — so you can trade instantly, at any time, with unlimited liquidity.

Key Properties

  • ✓Always liquid — The system automatically buys and sells, so you never wait for a counterparty.
  • ✓Prices sum to 100% — YES + NO prices always equal approximately $1.00.
  • ✓Self-adjusting — As more people buy YES, the YES price rises and the NO price falls.
  • ✓2% fee — A small trading fee is applied to each trade.

If you believe an event is more likely than the market price suggests, buy YES. If you think it's overvalued, buy NO. Your profit is the difference between what you paid and the $1 payout if you're right.

How to Get Started

1

Connect your wallet

Install Phantom (a Solana wallet) and connect it to Open Whale.

2

Claim free tOWAI

Get 100 tOWAI instantly via the one-time airdrop. No signup required.

3

Deposit & trade

Sign up, deposit your tOWAI, and start buying shares on any open market.

4

Earn daily tokens

Visit the daily faucet every day for bonus tOWAI. Build a streak for up to 2x rewards.

Frequently Asked Questions

Have more questions? Check the full FAQ page.

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