Structure

The market creator defines market title, duration, rules and the initial prize pool.

Market Example, Hiring Market from Bench

Users then add options who they think is the best option for this market. To filter noisy or 'bad' signals from high-quality information, users stake capital in the options they provide and they believe provides the highest value to the market creator. The more capital staked in an option, the higher the conviction that this is an opportunity worth looking into. The prize money is distributed to the options that provide the most value, not based on where the most capital is staked.

Reasoning

By focusing on the market’s purpose, it becomes clear that a unique market model is required. The goal is to surface new information that creates value, which calls for permissionless option creation and a fundamentally different resolution mechanism.

If markets are resolved based on what happens, participants are incentivized to predict decisions rather than contribute value. For example, if I know that a music label plans to sign a specific artist, my optimal strategy is simply to add that option and allocate capital to it, creating zero additional value for the decision-maker.

Instead, if winning options are defined by the value they provide, incentives shift. Participants are motivated to propose and back options they believe will be most valuable to the decision-maker. Assuming decision-makers are capable of recognizing the best option when presented with it, this effectively aligns incentives around surfacing high-value opportunities. In this sense, opportunity markets move closer to decision markets, the foundation of Futarchy, where markets are used to optimize outcomes rather than merely predict them.

That said, resolving markets based on perceived value is far more subjective than resolving them based on publicly verifiable outcomes. Participants may hesitate to risk capital when outcomes depend on the judgment of a single party or a group. To address this, participants are not exposed to direct losses. Instead, they stake capital to signal conviction, with 'skin in the game' coming from the opportunity cost of that capital rather than the risk of nominal loss.