# Trading Mechanism

Traders interested in speculating on event outcomes must link their wallets, choose their preferred outcome, and sign the contract through their wallet to participate in the market. Upon market closure and verification, traders receive their earnings directly in their designated wallets, with the payout amount being influenced by their contract size and the market's overall size.

Here are the formulas we use to calculate the outcome of the market.

1. **Total Incorrect Stake (TIS)**: This represents the aggregate of stakes placed on incorrect predictions.
   * Formula: $$TIS=Total Market Value×Percentage of Incorrect Prediction$$
   * Example: For a total market value of 50,000 tokens with 70% incorrect predictions, $$TIS=50,000×70%=35,000$$ tokens.
2. **Net Reward Pool (NRP)**: This is the total pool available for distribution to those who predicted correctly, after deducting the market fee.
   * Formula: $$NRP=TIS−(TIS×Market Fee Percentage)$$
   * Example: With a market fee of 5%, $$NRP=35,000−(35,000×5%)=33,250$$ tokens
3. **Total Correct Stake (TCS)**: This is the total of stakes on the correct outcome.
   * Formula: $$TCS=Total Market Value×Percentage of Correct Prediction$$
   * Example: If 30% predicted correctly, $$TCS=50,000×30%=15,000TCS=50,000×30%=15,000$$ tokens.
4. **Individual Share of Correct Stake (ISCS)**: This determines a user's proportion of the total correct stake.
   * Formula: $$ISCS=User’s Stake/TCS$$
   * Example: If User X stakes 5,000 tokens, $$ISCS=5,000/15,000=33.33%ISCS=5,000/15,000=33.33%$$.
5. **Individual Reward (IR)**: This is the amount a user wins, based on their share of the correct stake.
   * Formula: $$IR=ISCS×NRP$$
   * Example: $$IR=33.33%×33,250=11,083.33$$ x 33,250 = 11, 083.33 tokens.
6. **Market Fee (MF)**: This is the fee taken from the total market value.
   * Formula: $$MF=Total Market Value×Market Fee Percentage$$
   * Example: $$MF=50,000×5%=2,500$$ = 2,500 tokens.


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