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In price-based futarchy markets, participants trade based on their expectations of how specific decisions will impact the price of a token, which serves as the key metric for evaluation. For example, Gnosis DAO could create a prediction market to determine whether a proposal should be accepted, using the GNO/wstETH trading pair as the measurable metric. The proposal would be accepted if the market predicts that the price of YES_GNO/YES_wstETH will exceed the price of the NO_GNO/NO_wstETH. Right now, futarchy markets are only available on Gnosis Chain.

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Create a futarchy market

On the Futarchy page, click the Create new Proposal.
  1. Input the proposal title:
  2. Choose the collateral tokens: In the previous example, GNO is the token, and wstETH is the currency. The market will generate four outcome tokens: YES_GNO, NO_GNO, YES_wstETH, and NO_wstETH. These tokens will be traded across two liquidity pools: YES_GNO/YES_wstETH (called “yes pool”) and NO_GNO/NO_wstETH (called “no pool”).
  3. Specify an opening date. The market can only be resolved after the opening date:
  4. Preview the market:
After previewing, click Create Market. An instance of the FutarchyProposal contract will be deployed at a new address as an on-chain representation of the proposal. You can view the proposal address by clicking the network icon in the top right corner of the market page:
The process for verifying the market follows the same steps outlined earlier for standard markets

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Market Page

Some differences with standard markets:
  1. YES and NO tokens can be traded directly with each other, instead of being traded against a shared collateral token like sDAI.

    To obtain these tokens, you first need to split either the token or the currency underlying.     For example, you can split GNO to receive YES_GNO and NO_GNO, and then trade NO_GNO for NO_wstETH.
  2. No invalid tokens: A proposal is well defined and can either pass or fail, so no need of invalid tokens. If the market resolves as invalid, the proposal is automatically considered failed.

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Mint, merge conditional outcome tokens

The process is similar to that of a simple market, with a few key differences:
  1. Minting: You can mint outcome tokens using either the token or the currency underlying.
  2. Merging: Depending on the outcome tokens you hold, you can merge them back into either the token or the currency underlying.

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Resolve conditional market and redeem conditional outcome tokens

You would resolve the market as normal. However, after a futarchy market is resolved, instead of redeeming sDAI (or xDAI), you will redeem token and/or currency underlying.