How It Works

Deep dive into the mechanics that power Seesaw's prediction markets. This section covers the market lifecycle, oracle integration, order matching, and settlement process.

The Core Concept

Seesaw creates binary prediction markets - markets with exactly two outcomes:

Market Timing

Every market follows a precise cadence based on its configured duration and Unix timestamps. Durations range from 60 seconds to 7 days (default: 15 minutes):

market_id = floor(unix_timestamp / duration_seconds)
t_start   = market_id × duration_seconds
t_end     = t_start + duration_seconds

Example Timeline (UTC) — 15-minute markets

Market ID	Start Time	End Time	Status
1936800	14:00:00	14:15:00	RESOLVED
1936801	14:15:00	14:30:00	TRADING
1936802	14:30:00	14:45:00	PENDING

Multiple markets with different durations can run concurrently for the same asset (e.g., a 1-minute and a 1-hour SOL/USD market).

Complete Lifecycle

State Details

State	What Happens	Duration
PENDING	No on-chain account yet	Until created
CREATED	Account initialized, awaiting start price	Until t_start
TRADING	Order book active, trades execute	Market's duration
SETTLING	End price captured, computing outcome	Seconds
RESOLVED	Outcome determined, claims available	Until all claimed
CLOSED	All accounts closed, rent reclaimed	Final

Price Mechanics

Shares are priced between 0 and 1 USDC (stored as basis points internally):

The Probability Relationship

Since YES and NO are complementary:

P(YES) + P(NO) = 100%

If YES trades at 0.60:
└── Implied P(UP) = 60%
└── NO should trade at 0.40
└── Implied P(DOWN) = 40%

Order Book Mechanics

Seesaw uses a single unified order book for YES shares. NO orders are automatically converted:

Conversion Rules

Your Intent	Book Action	Price Conversion
Buy YES @ P	Bid @ P	None
Sell YES @ P	Ask @ P	None
Buy NO @ P	Ask @ (1-P)	`new_price = 10000 - price`
Sell NO @ P	Bid @ (1-P)	`new_price = 10000 - price`

Oracle Integration

Seesaw uses Pyth Network for price data:

Sampling Rules

Start Price (P_start):

First Pyth update where publish_time >= t_start
Must have positive price
Immutable once captured

End Price (P_end):

First Pyth update where publish_time >= t_end
Must have positive price
Immutable once captured

Resolution Logic

if P_end >= P_start:
    outcome = UP
else:
    outcome = DOWN

Important: Equality (no change) resolves as UP.

Collateralization

Every share in circulation is backed 1:1 by USDC:

Solvency Invariant

The vault always holds enough to pay all possible winners:

vault_balance >= max(total_yes_shares, total_no_shares)

This ensures the protocol can always settle regardless of outcome.

Fee Structure

Fee Type	Rate	Recipient	When
Taker Fee	0.30%	Protocol	On trade
Maker Rebate	0.10%	Order placer	On trade
Net	0.20%	Protocol	—

Example Calculation

Trade: Buy 100 YES @ 0.50
Notional: 50 USDC

Taker pays:  50 × 1.003 = 50.15 USDC
Maker gets: 50 × 1.001 = 50.05 USDC
Protocol:   0.10 USDC

Settlement Process

After resolution, winners claim their payouts: