Frequently Asked Questions

Question 1

What Is PredictionSwap?

Accepted Answer

PredictionSwap is a protocol layer for prediction markets that places the canonical market state and solvency rules on-chain, allowing different trading systems to operate against the same market without recreating the financial core.

Question 2

Why do we need a protocol layer? What's wrong with how things are today?

Accepted Answer

Today, prediction markets settle on chain, but trading is centralised. The matching engine, the order book and the capital coordination sit inside a platform. Each platform operates as its own financial silo. If a new application launches, it must rebuild markets and rebuild liquidity. Even when two platforms list the same event, they are separate systems. This makes prediction markets separate and dependent on individual operators. A true protocol layer does not exist. PredictionSwap introduces that missing layer.

Question 3

Why can't everyone just piggy back on an existing system or platform?

Accepted Answer

Existing systems do not expose the market itself. You can interact with the tokens they issue. You can build an interface that reads prices, but you cannot inherit their live order book, their matching logic, or their coordinated liquidity. If you launch a new platform today, you are not extending an existing market - you are creating another version of it. Liquidity does not automatically carry over. Execution does not automatically carry over. Capital does not automatically coordinate across systems. Without a protocol layer, every new platform becomes a new financial island. PredictionSwap removes that fragmentation by placing the market itself in the protocol.

Question 4

But Polymarket is just contracts. Can't i just interact directly with their contracts?

Accepted Answer

Yes. You can interact with the contracts. You can hold tokens. You can transfer them. You can settle positions. But what you cannot inherit is coordinated liquidity. Order books, matching engines and capital coordination operate off-chain. If you build your own interface, you do not inherit that execution layer. You must rebuild it. The contracts handle settlement, but they do not provide a protocol-level market state that multiple execution systems can operate against. PredictionSwap places the canonical market state and solvency rules on-chain, so different trading systems can operate against the same market without recreating the financial core.

Question 5

So what's the difference between PredictionSwap and existing prediction markets?

Accepted Answer

Existing on-chain prediction markets contain structural limitations. To operate efficiently at scale, platforms introduce off-chain components for matching, coordination, and liquidity management. PredictionSwap addresses those structural limitations at the protocol level. By resolving them on-chain, the protocol reduces reliance on off-chain coordination as part of the core market infrastructure.

Question 6

But can't we just use AMMs to fix everything?

Accepted Answer

Automated Market Makers improve decentralisation, but they require capital to be allocated to specific market pools. Each pool must be funded in advance. By contrast, centralised systems allow a single balance to support orders across many markets at once. Capital is only committed when a trade executes. That model is more capital efficient, but it depends on off-chain coordination. Today there is a trade-off: efficient coordination with centralised infrastructure, or decentralised infrastructure with capital locked into separate pools.