Predictu
Trading Engine

Market Resolution & Settlement

When a prediction market reaches its end date or an outcome becomes known, the market enters the resolution phase. Predictu supports two resolution paths: standard resolution (outcome determined, winners paid, losers notified) and market voiding (cancellation with full refunds to all participants).

Atomic guarantees: All settlement operations are atomic. Either every position is settled and every payout is processed, or the entire operation rolls back. There are no partial settlements.

Standard Resolution

When a market resolves with a winning outcome, the settlement engine processes every open position automatically:

1
Determine the winner — The winning outcome is set based on real-world event data sourced from trusted oracle providers.
2
Classify all positions — Every open position in the market is classified as a winner or loser based on which outcome was selected.
3
Process payouts — Winners are credited through the operator’s wallet system via server-to-server callbacks. Losers receive a notification callback for their records.
4
Record settlement — A comprehensive settlement record captures the full financial summary: total positions settled, amounts paid out, and the operator’s net profit or loss on the market.

Market Voiding

When a market needs to be cancelled — due to an event cancellation, an error in market creation, or an outcome that becomes unknowable — the voiding process refunds every participant their original cost basis. No one wins or loses; everyone gets their money back.

Voided markets result in a settlement record with zero profit, confirming that all funds were returned. This provides a clear audit trail for both the operator and their players.

Operator Economics

Settlement is where the operator’s position on a market is realized. The net profit is the difference between the total amount collected from all trades and the total paid out to winners. Depending on how the book was balanced, the operator may profit or take a loss on any given market.

Risk-managed outcomes: While individual markets can result in a net loss for the operator, the risk management system’s exposure caps ensure that losses are always bounded. Over a portfolio of markets, the spread engine’s mathematical edge produces consistent positive returns.

Wallet Integration

All settlement payouts and refunds flow through the operator’s wallet system via server-to-server callbacks. The settlement engine handles three types of wallet operations:

  • Winner credits — Winnings are credited to the player’s balance on the operator’s platform.
  • Loss notifications — The operator is informed that a position resolved against the player. No funds move, but the event is recorded for reconciliation.
  • Void refunds — The player’s original cost is returned in full when a market is cancelled.

If a wallet callback fails during settlement, the system retries automatically with exponential backoff. Positions that cannot be settled after all retries are flagged for manual review, without blocking settlement for other players.

Settlement Records

Every resolution or void creates a detailed settlement record that captures the complete financial summary. These records are used for:

  • Operator invoicing — Settlement profits feed directly into the revenue share calculation.
  • Financial reporting — Operators can review settlement outcomes for any market through their dashboard.
  • Audit compliance — The immutable settlement trail satisfies regulatory requirements for financial record-keeping.

Post-Settlement Effects

After settlement completes, several downstream processes are triggered automatically:

  • Player intelligence update — The scoring system recalculates player behavior metrics based on the settlement results.
  • Revenue attribution — Settlement profit is attributed to the appropriate operator for invoicing.
  • Risk exposure release — The resolved market’s exposure is released from all risk caps, freeing capacity for new trades.
  • Dashboard refresh — Operator dashboards update their revenue and settlement metrics in near real-time.
Finality: Settlement is a one-way operation. Once a market is resolved or voided, the result is permanent. This ensures that all downstream calculations — invoicing, scoring, and reporting — are built on an immutable foundation.