Glossary

Alpha Vector (α)

The Dirichlet concentration vector representing cumulative evidence in the Probability Market. Always strictly positive.

Belief Curve / Belief Vector (p)

A user’s declared probability distribution over the outcome range, expressed as Bernstein coefficients.

Bernstein Coefficients

A basis for expressing continuous probability distributions. FS uses them because they are stable, expressive, and easily composable with UI inputs.

Buy Operation

A trade that adds collateral to the Probability Market, updates the alpha vector, increases informational potential, and mints information claims.

Claim (m)

The minted informational claim representing a user’s contribution to the market’s potential. Used to determine settlement payouts.

Clearance

A Reality Market state where closure capital sufficiently outweighs continuance capital, triggering the dwell countdown.

Closure (Bond) Agent

A Reality Market participant who asserts a specific numerical value $X$ and locks capital on that assertion.

Continuance (Bounty) Agent

A participant who stakes against premature or incorrect closure, funding the bounty pool.

ContinuancePrize

The pool of capital available to winning closure agents, sourced from continuance stakes.

Dirichlet Potential (A(α))

The convex potential function that governs pricing and minting in Probability Markets.

Dwell Period

The time the market must remain above the clearance threshold before finalising.

Finalisation x*

The single numerical truth value produced by the Reality Market, used to settle the Probability Market.

Minting Ratio

Determines how many information claims are minted per unit change in potential.

Participant-Funded Liquidity

FS’s liquidity model: all liquidity is provided by traders themselves; there is no AMM pool or LP class.

Probability Market (PM)

The continuous trading surface where users express beliefs as PDFs and trade into or out of positions.

Reality Market (RM)

The adversarial capital game used to produce the final settlement value x*.

Sell Operation

The exact reversal of a buy, removing potential along the original belief curve direction.

Settlement

The payout process once x* is known, combining belief accuracy weighting with claim-share proportion.

SlashPool

The pool distributed to continuance agents after inaccurate closure assertions are penalised.

Resolution Layer

The conceptual role of Reality Markets: resolving an uncertain outcome into a single final value under adversarial conditions.