Market Lifecycle

The six phases every PMX market goes through

Overview

Every market follows the same deterministic lifecycle. Understanding these phases helps you know what to expect as a creator or trader.

1
Market Creation

Creator defines a question, two outcomes (YES/NO), and a resolution date

2
Token Minting

Liquidity pools are created and YES/NO tokens are minted at a 50/50 split

3
Trading

Users freely buy and sell outcome tokens — prices shift with each trade

4
Resolution Request

Market reaches its resolution date; trading is permanently disabled

5
Oracle Settlement

UMA's decentralized oracle determines the correct outcome

6
Winnings Claim

Holders of winning tokens redeem them for payouts

Market Creation

Any user can create a market by specifying:

  • A clear, objective question with an unambiguous answer
  • Two mutually exclusive outcomes: YES and NO
  • A resolution date after which the outcome can be verified
  • A market creation fee (used to mint initial tokens)
Capital at Risk
The creation fee mints tokens and seeds the liquidity pools. This is real capital at risk — it can be lost entirely depending on the outcome.

Token Minting & Pricing

The creation fee is split equally to mint YES and NO tokens. Prices are derived from relative pool liquidity:

Price(outcome) = Liquidity(outcome) / Total Liquidity

Prices update with every trade, creating continuous market-driven price discovery with instant settlement.

Trading Phase

During trading, users buy and sell outcome tokens freely. Each trade adjusts pool liquidity, which updates prices in real time. Outcome tokens are standard SPL tokens — they can also be traded on external DEXs, though PMX generally offers lower slippage due to direct pool interaction.

Transferable
Any Solana wallet
Composable
Standard SPL tokens
Redeemable
After resolution

Resolution Request

At the predefined resolution date:

  • Trading is permanently disabled
  • A resolution request is submitted to UMA
  • The market enters the settlement phase

Oracle Settlement

UMA determines the correct outcome through decentralized voting backed by economic incentives. Contested outcomes can be disputed, triggering additional voting rounds. Once consensus is reached:

  • The winning outcome is recorded immutably on-chain
  • Winning tokens become redeemable at par value
  • Losing tokens become worthless

Winnings Claim

After resolution, holders of winning tokens redeem them directly through PMX. Claims are permissionless, require no approval, and are enforced entirely by smart contracts.

Next Steps
Learn more about creating markets or trading outcome tokens.
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Introduction
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Market Creation