#Definition
A Conditional Market is a prediction market where the trades are only valid if a specific precondition occurs. If the condition is not met, the market is typically cancelled, and all trades are reverted (funds returned).
#Use Cases
#Policy Analysis (Futarchy)
Conditional markets are essential for "Futarchy" or decision markets.
- Example: "What will GDP be in 2025 if Candidate A wins?" vs. "What will GDP be in 2025 if Candidate B wins?"
- If Candidate A wins, the first market resolves based on GDP, and the second market is voided.
#Sports and Events
- "Will Team X win the championship if they make the playoffs?"
#Mechanics
- Condition: clearly defined event (e.g., "Bill passed").
- Effect:
- Condition Met: Market resolves normally.
- Condition Not Met: Market is void/cancelled.