Positions & Settlement

Internal Positions (Current 5-Minute Markets)

Current 5-minute markets use internal positions tracked on-chain rather than ERC-1155 tokens. Each market has two sides: UP and DOWN.

Position Tracking

Positions are stored in a mapping:

positions[user][marketId][side]

When your order fills, your position is credited internally. No tokens are minted or transferred.

Collateral

Each lot represents $0.01 of collateral (LOT_SIZE = 1e16). When a bid and ask match at a clearing tick, the combined collateral from both sides equals $0.01 per lot — fully collateralized.

Trading

Positions are what you trade on the orderbook:

• Buying UP at $0.60 = paying $0.006 per lot for an UP position (implies 60% probability)

• Selling UP at $0.60 = selling your UP position for $0.006 per lot

• Equivalently, buying DOWN at $0.40 (since UP + DOWN = $0.01 per lot)

Settlement (Post-Resolution)

Once a market resolves:

• Winning positions pay out at LOT_SIZE ($0.01) per lot in USDT

• Losing positions pay nothing

Batch settlement (collateral movement, position crediting) happens inline during clearBatch. After market resolution, winning positions are redeemed via redeem() on the Redemption contract.

Example

You buy 1000 lots of UP at tick 60 (cost: 1000 x $0.01 x 60/100 = $6.00). The market resolves UP.

• Your 1000 UP lots pay out 1000 x $0.01 = $10.00

• Profit: $10.00 - $6.00 = $4.00 (before fees)

If the market resolves DOWN, your UP position is worth $0.

Cancellation

If a market is cancelled (no valid Pyth update within deadline), all collateral is refunded. No one loses funds.

ERC-1155 Tokens (Future Market Types)

The contracts include a full ERC-1155 multi-token system (OutcomeToken) for future market types that may require transferable, composable tokens.

Token IDs

Token IDs are deterministic — no registry needed:

• UP: marketId * 2

• DOWN: marketId * 2 + 1

Minting & Merging

For token-based markets, outcome tokens are minted as fully collateralized pairs and can be merged back into collateral. Since tokens are ERC-1155, they are transferable and composable with other protocols.

This system is not active for current 5-minute markets but is available in the contracts for future use (controlled by the useInternalPositions flag on market creation).