Prediction Market Protocol

A modular, permissionless protocol for creating and trading on prediction markets. The protocol supports collateral management, outcome tokens, and flexible oracle integration.

Architecture

The protocol is organized into several key modules:

Core Logic

Handles market creation, registration, and metadata management.

• MarketRegistry: The central source of truth for all markets.
• MarketFactory: Facilitates permissionless market creation.
• MarketTypes: Common data structures used across the system.

Outcome Tokens

Shares in a market outcome are represented as ERC20 tokens.

• OutcomeToken: Individual tokens for each possible outcome.
• OutcomeTokenFactory: Deploys outcome tokens for new markets.

Vault and Accounting

Manages collateral safety and internal balance tracking.

• CollateralVault: Securely holds underlying assets (e.g., USDC).
• VaultAccounting: Tracks market-specific liquidity and payouts.

Oracle System

Abstracted interface for various resolution mechanisms.

• IOracle: Standard interface for all oracle adapters.
• OptimisticOracleAdapter: Integration with decentralized oracle systems (e.g., UMA).
• ManualOracle: Permissioned resolution for specific use cases.

Settlement and Trading

Handles the lifecycle of a market from trading to resolution.

• SettlementEngine: Manages final payouts and token redemptions.
• AtomicSwap: Basic mechanism for minting/burning outcome tokens against collateral.

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Getting Started

Prerequisites

• Foundry

Installation

git clone <repository-url>
cd prediction-market-protocol
forge install

Build

forge build

Test

forge test

Directory Structure

prediction-market-protocol/
├── src/
│   ├── core/          # Registry and Factory logic
│   ├── outcome/       # ERC20 Outcome tokens
│   ├── settlement/    # Payout and trading logic
│   ├── vault/         # Collateral management
│   ├── oracle/        # Oracle adapters
│   ├── fees/          # Fee collection and management
│   ├── governance/    # Protocol administration
│   └── libs/          # Shared utilities
├── test/              # Test suite
└── script/            # Deployment scripts

License

MIT