How Shares Reflect Probability

Each outcome in a CalledIt market is represented by a live share price, which expresses the market’s implied probability that the outcome will occur.

For example, if a share for “Alice to Win” is priced at 0.25 USDC, that price reflects a 25 percent implied probability based on current market activity. As demand for that outcome increases (through participants buying more shares) the price adjusts upward. Conversely, prices for competing outcomes, such as “Bobby to Win,” adjust downward in order to maintain the market’s internal balance.

This dynamic is entirely decentralized. All price movements are driven by the actions of market participants and calculated in real time through automated smart contracts.

Example Scenario

Consider a market with a single question: Who will win: Alice or Bobby?

At the time of entry, shares for “Bobby to Win” are trading at 0.40 USDC. A participant purchases 20 shares at that price, spending an estimated 8 USDC (subject to slippage and applicable fees).

If Bobby wins the match, those 20 shares are redeemable for 1 USDC each, totaling 20 USDC. If Bobby loses, the shares expire with no redemption value.

Participants who buy early or accurately anticipate shifts in sentiment may achieve higher potential returns by entering at lower price points.