# Binary Markets

Every market on Pitchcast resolves to exactly one of two outcomes. There are no draws, no partial outcomes, and no ambiguity at settlement. A market is either YES or NO.

A position in a market is represented as a share token:

* **YES share**: worth $1.00 USDC if the outcome occurs, $0.00 if it does not
* **NO share**: worth $1.00 USDC if the outcome does not occur, $0.00 if it does

A YES/NO pair is always fully collateralised by exactly 1 USDC. This creates a clean invariant that underpins the entire protocol.

## The invariant

Any user can mint a YES/NO pair by depositing exactly 1 USDC into the market. Any user holding both a YES share and a NO share can redeem them for exactly 1 USDC at any time before resolution. After resolution, the winning share redeems 1:1 for USDC; the losing share is worthless.

This means:

* Total USDC locked in a market = total YES shares in circulation = total NO shares in circulation
* The market is zero-sum between YES and NO holders
* One side's winnings are exactly funded by the other side's losses
* The protocol takes no position and cannot be insolvent

## What makes a valid binary market

A valid Pitchcast market must meet three criteria:

1. **Binary**: exactly two possible outcomes, with no third result possible
2. **Objectively resolvable**: the oracle can determine the answer from a verifiable, public source
3. **Time-bounded**: a resolution deadline exists and is realistic given the event

Markets that fail these criteria are voided. All collateral is returned pro-rata, and no fees are charged. See [Voiding Policy](broken://pages/sI4YjEN4Mqdkq9SKQtsk) for the full list of void conditions.

{% hint style="info" %}
The binary constraint is a feature, not a limitation. It produces clean pricing, clear incentives, and unambiguous settlement. Football events map naturally to binary questions: did the goal go in, did the player start, did the transfer complete.
{% endhint %}


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