Understanding Shares
YES and NO shares are the fundamental trading units in Seesaw prediction markets.
The Basics
Every Seesaw market asks a binary question:
Will the asset price be UP or DOWN compared to the start of the market's duration window?
You express your prediction by holding shares:
| Share Type | You Believe | Payout if Correct |
|---|---|---|
| YES | Price will be UP or UNCHANGED | 1 USDC per share |
| NO | Price will be DOWN | 1 USDC per share |
Share Pricing
Shares are priced in basis points (bps) where 10,000 bps = 100%:
Price Interpretation
The price reflects the market's implied probability:
| YES Price | Implied UP Probability | NO Price (Complement) |
|---|---|---|
| 7000 bps | 70% | 3000 bps |
| 6000 bps | 60% | 4000 bps |
| 5000 bps | 50% | 5000 bps |
| 4000 bps | 40% | 6000 bps |
The Probability Constraint
YES and NO prices always sum to 100%:
P(YES) + P(NO) = 1.0 (100%)
This is enforced by the order book's dual-view conversion:
When you:
- Buy YES @ 6000 bps: You're the counterparty to someone selling NO @ 4000 bps
- Sell YES @ 6000 bps: You're the counterparty to someone buying NO @ 4000 bps
Collateralization
Every share is fully collateralized. When you buy 100 YES shares at 6000 bps:
Why full collateralization?
- Guarantees all payouts can be honored
- No liquidation risk
- No counterparty default risk
Creating New Shares
Shares are created when a trade executes between buyers and sellers:
Key insight: Each trade creates matching YES and NO shares. Together, 1 YES + 1 NO = 1 USDC guaranteed payout.
Share Settlement
At resolution, winning shares pay 1 USDC each:
Settlement Math:
| Outcome | YES Share Value | NO Share Value |
|---|---|---|
| UP | 1.00 USDC | 0.00 USDC |
| DOWN | 0.00 USDC | 1.00 USDC |
Profit and Loss
Your P&L depends on purchase price vs settlement:
If You Bought YES @ 6000 bps (paid 0.60 USDC)
| Outcome | Payout | P&L |
|---|---|---|
| UP | 1.00 USDC | +0.40 USDC (+67%) |
| DOWN | 0.00 USDC | -0.60 USDC (-100%) |
If You Bought NO @ 4000 bps (paid 0.40 USDC)
| Outcome | Payout | P&L |
|---|---|---|
| UP | 0.00 USDC | -0.40 USDC (-100%) |
| DOWN | 1.00 USDC | +0.60 USDC (+150%) |
Selling Shares
You can sell shares before resolution to:
- Lock in profits
- Cut losses
- Adjust your position
No Naked Shorts: You can only sell shares you own. The protocol prevents selling shares you don't have.
Share Accounting
Your position tracks several values:
| Field | Description |
|---|---|
yes_shares | Unlocked YES shares you own |
no_shares | Unlocked NO shares you own |
locked_yes_shares | YES shares locked in sell orders |
locked_no_shares | NO shares locked in sell orders |
collateral_locked | USDC locked for buy orders |
Key Takeaways
- Binary Outcome: YES or NO, nothing in between
- Full Collateral: Every share backed by USDC
- Complementary Prices: YES + NO = 100%
- Symmetric Payouts: Winners get 1 USDC per share
- No Naked Shorts: Can only sell what you own
Next Steps
- Learn Placing Orders
- Understand Managing Positions