Trading YES/NO Shares

How to buy and sell shares on Prophet — understanding prices, slippage, and what happens at resolution.

Overview

Every Prophet market has two tradable assets: YES shares and NO shares. Each trades between $0.00 and$1.00 USDT. The price at any moment represents the market’s implied probability of that outcome.

If you think an event will happen, buy YES. If you think it will not happen, buy NO. If you change your mind, sell your shares back to the AMM before the market closes.

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Finding a Market

1. Open the Prophet app and navigate to the Markets page
2. Browse open markets by category (Sports, Finance, Politics, Crypto, Other)
3. Each market card shows:
   • The market question
   • Current YES price (left) and NO price (right)
   • Time remaining until the deadline
   • Total liquidity in the AMM pool
4. Click a market card to open the full trading view

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Understanding the Price Display

Prices are shown as dollar amounts between $0.00 and$1.00:

YES: $0.63   |   NO: $0.37

This means:

• The market implies a 63% probability the event occurs
• The market implies a 37% probability the event does not occur
• YES price + NO price always equals $1.00

Why this matters for trading:

• If you believe the probability is higher than the displayed price, buying that share is positive expected value
• If you believe the probability is lower, buying the opposite share is positive expected value

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Buying YES Shares

1. Open the trade panel

   On any market page, the trade panel is on the right side. Click the “YES” tab.

2. Enter your amount

   Type the USDT amount you want to spend (e.g., 50 USDT). The panel shows:

   • Estimated shares you will receive
   • Expected price per share after your trade
   • Price impact (how much your trade moves the price)
3. Check slippage tolerance

   The default slippage tolerance is 1%. This means the transaction will revert if the actual price is more than 1% worse than displayed. Increase this for large trades on thin markets.

4. Approve USDT (first time only)

   If this is your first trade on Prophet, MetaMask will ask you to approve the contract to spend your USDT. Click “Approve” and confirm the transaction. This is a one-time step.

5. Click Buy YES

   Click “Buy YES” and confirm the transaction in MetaMask. The transaction submits to 0G Chain and confirms in ~1–2 seconds.

6. Confirm receipt

   After the transaction confirms, your YES share balance updates in the trade panel. You now own shares that pay $1.00 each if the market resolves YES.

What Happens On-Chain

When you buy YES shares:

1. Your USDT enters the MarketContract
2. The AMM mints complete sets (YES + NO) from the USDT
3. The YES shares go to your wallet
4. The NO shares increase the pool’s NO reserve (making YES more expensive)
5. The AMM state updates: YES price rises, NO price falls

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Buying NO Shares

The process is identical to buying YES, but click the “NO” tab instead.

When you buy NO shares:

1. Your USDT enters the MarketContract
2. The AMM mints complete sets (YES + NO) from the USDT
3. The NO shares go to your wallet
4. The YES shares increase the pool’s YES reserve (making NO more expensive)
5. YES price falls, NO price rises

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Selling Shares

You can sell your shares back to the AMM at any time while the market is Open.

1. Switch to the Sell tab

   In the trade panel, click “Sell” (instead of “Buy”).

2. Select share type and enter amount

   Choose YES or NO, then enter the number of shares you want to sell. The panel shows estimated USDT you will receive.

3. Review the sell price

   The sell quote takes current AMM prices into account. Large sells move the price against you — check the price impact displayed.

4. Confirm the sale

   Click “Sell” and confirm in MetaMask. Your shares leave your wallet; USDT enters your wallet.

Sell Equation

Selling uses a different mathematical formula than buying to protect AMM solvency:

(sameReserve + sharesIn - collateralOut) * (oppositeReserve - collateralOut) 
    = sameReserve * oppositeReserve

This means large sells receive progressively worse prices (more slippage) — a feature, not a bug. It prevents the AMM from being drained by a single large sell.

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Reading Your Position

The trade panel shows your current position for any connected market:

• Your YES balance: shares owned that pay $1.00 if YES
• Your NO balance: shares owned that pay $1.00 if NO
• Current value: your shares × current price (mark-to-market)
• P&L: difference from what you paid

The “current value” shown is what you would receive if you sold now (after slippage). Your actual payout at resolution depends entirely on the outcome — not on the current price.

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Price Impact for Large Trades

The AMM has finite liquidity. Large trades move prices significantly:

Trade Size vs. Pool	Expected Price Impact
< 1% of pool	< 0.01% — negligible
5% of pool	~5% — noticeable
20% of pool	~25% — significant
50% of pool	~100% — extreme

For large trades, consider splitting into smaller transactions over time to reduce average price impact.

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What Happens When the Market Resolves

When the market’s deadline passes:

1. Trading stops — buyShares and sellShares revert
2. Oracle triggers resolution — verdict is posted on-chain with reasoning hash
3. 24-hour challenge window — anyone can challenge the verdict
4. Positions revealed — oracle decrypts all sealed positions atomically
5. Winners can redeem — call redeemWinningShares() or use the “Redeem” button in the app

Losers receive $0.00 per share. Winners receive their share of the pool minus fees.

You do not need to do anything during the resolution process. The oracle and market-maker agents handle it automatically. Just wait for the “Resolved” status and then click “Redeem.”

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Fees

All trades incur a fee taken from the collateral:

• Oracle fee: funds the AI oracle’s 0G Compute usage
• Market-maker fee: compensates the LiquidityPool for seeding liquidity
• Protocol fee: goes to the Prophet treasury

The total fee percentage is displayed in the trade panel before you confirm. Fees are deducted from the USDT going into (for buys) or out of (for sells) the AMM.

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Next: Redeeming After Resolution

Redeem Winnings

How to collect your USDT after a market resolves — winning redemption, cancelled markets, and fee deductions.