Prediction Markets as Information Engines

Prediction markets are not betting products. They are information systems.

At a structural level, a prediction market is a mechanism that converts dispersed beliefs, asymmetric information, and individual incentives into a single numerical output: a price. That price is not an opinion. It is an implied probability produced by capital-weighted conviction. When participants are allowed to buy and sell outcome shares freely, the market aggregates private knowledge, public signals, and risk tolerance into a continuously updating forecast.

This is why prediction markets have repeatedly outperformed polls, pundits, and expert panels across domains ranging from elections and sports to macroeconomic events and technology adoption. Polls measure stated belief. Markets measure revealed belief under consequence. The difference is decisive.

Technically, prediction markets function by issuing outcome tokens tied to mutually exclusive states of the world. A “Yes” token that settles to 1 if an event occurs and 0 otherwise will trade between 0 and 1 prior to resolution. The market price converges toward the probability-weighted expectation of settlement. A price of 0.72 does not mean “people feel optimistic”. It means that, given current information and incentives, the market assigns a 72 percent likelihood to that outcome.

Crucially, prediction markets are dynamic. Unlike static forecasts, prices update in real time as new information arrives. They react instantly to news, leaks, signals, and second-order effects. This makes them uniquely suited to environments where truth is contested, information is incomplete, and incentives are misaligned.

However, most existing prediction market platforms treat this capability as a curated product, not as infrastructure. Markets are centrally defined, limited in scope, and bottlenecked by platform governance. This constrains the information surface. Only a narrow slice of questions ever become markets, and long-tail or niche knowledge remains unpriced.

Foremarket starts from a broader definition. A prediction market is not a special feature reserved for platform operators. It is a primitive. Any well-defined future event with an objectively resolvable outcome can, in principle, be turned into a market. The more questions that can be asked, the more information can be surfaced.

From this perspective, the power of prediction markets does not come from any single market. It comes from scale and diversity. When teams, communities, and users are able to create markets around the questions they care about, forecasting stops being centralized and starts being pluralistic.

Foremarket is built to treat prediction markets not as isolated betting venues, but as a general-purpose layer for probabilistic truth. Markets are the interface. Prices are the output. Everything else is plumbing.