Market States and Lifecycle Transitions

How markets evolve deterministically from creation to settlement.

Once a market is created on Foremarket, it moves through a fixed, explicit lifecycle. This lifecycle is enforced at the protocol level and applies uniformly to all markets, regardless of creator, domain, or scale. The goal is to eliminate ambiguity about what actions are possible at any given time and to ensure that capital is only exposed under well-defined conditions.

A market progresses through the following states:

MarketState =
  Draft → Active → Frozen → Resolved → Settled

Each state has a narrowly defined purpose.

Draft is the initial state immediately after creation. In this state, the market definition is immutable but trading is disabled. Draft exists to surface malformed or ambiguous questions before liquidity enters the system. During this window, third parties can review the question, outcomes, and resolution rules. If a fatal issue is discovered, the market can be abandoned and the creator bond returned, minus a small protocol fee.

Active is the trading state. Once a market becomes active, outcome tokens can be bought and sold, liquidity can be provided, and prices begin to form. No parameters can be modified. This immutability is critical. Traders must be able to rely on the fact that the rules of the market will not change while positions are open.

Frozen occurs automatically at the market’s expiry timestamp. Trading is halted, but settlement has not yet occurred. Freezing ensures that no new information can be priced after the event window closes. Positions are locked in, and the market transitions from forecasting to verification.

Resolved is the state in which the outcome has been determined but not yet finalized. Resolution may be supplied by an external oracle, the market creator, or a hybrid process depending on how the market was defined. At this stage, disputes may be raised. Creator bonds and dispute bonds become economically relevant.

Settled is the terminal state. Outcome tokens are redeemable for their final value, creator bonds are released or slashed, and the market becomes read-only. No further state transitions are possible.

State transitions are strictly one-way. There is no mechanism to revert a market or reopen trading after expiry. This prevents manipulation and ensures temporal integrity.

By encoding lifecycle transitions explicitly, Foremarket makes markets predictable not just in outcome, but in behavior. Traders know when they can act. Creators know when they are accountable. The protocol never needs to interpret intent. It only enforces state.