> For the complete documentation index, see [llms.txt](https://docs.yosoku.fun/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.yosoku.fun/about.md).

# About

## About Yosoku

Yosoku is a decentralized prediction market protocol built on Solana, enabling users to trade on the outcomes of real-world events. The protocol combines high-performance on-chain order matching with cross-chain oracle resolution via LayerZero, providing a trustless and transparent framework for prediction markets.

### How Prediction Markets Work

Prediction markets allow participants to trade shares representing the probability of future events. Each market poses a question with a binary outcome, and participants can buy or sell shares reflecting their beliefs about the likelihood of each outcome.

#### Share Pricing

* **Yes shares** represent belief that the outcome will occur
* **No shares** represent belief that the outcome will not occur
* Share prices range from **$0.01 to $0.99**
* Prices reflect the market's collective probability estimate
* At resolution, winning shares pay out **$1.00** per share; losing shares pay **$0.00**

#### Example

Consider a market asking: *"Will Bitcoin exceed $100,000 by December 31, 2025?"*

* If Yes shares trade at $0.65, the market implies a 65% probability of occurrence
* A trader who buys 100 Yes shares at $0.65 pays $65
* If Bitcoin does exceed $100,000, the trader receives $100 (profit of $35)
* If it does not, the trader receives $0 (loss of $65)

### Market Types

Yosoku supports two market structures to accommodate different prediction scenarios.

#### Regular Markets

Regular markets feature a single binary question with one Yes/No share pair. These are ideal for straightforward predictions with two possible outcomes.

**Example:** *"Will the Federal Reserve cut interest rates in Q1 2026?"*

#### Multi-Leg Markets

Multi-leg markets contain multiple related outcomes under a single market umbrella. Each leg operates as an independent Yes/No pair, allowing traders to speculate on various possibilities within the same event.

**Example:** *"Who will win the 2026 World Cup?"*

* Leg 1: Brazil
* Leg 2: France
* Leg 3: Argentina
* Leg 4: Germany

Each leg has its own order book, enabling independent price discovery for each potential outcome.

### Trading Mechanics

Yosoku employs a central limit order book (CLOB) model, providing transparent price discovery and efficient order matching.

#### Order Types

**Limit Orders** Place an order at a specific price. The order remains in the book until filled or cancelled.

**Market Orders** Execute immediately against existing orders in the book at the best available prices.

**Covered Bids** Use existing share positions as collateral for new orders. Traders holding Yes shares can use them to back No bids, and vice versa, enabling capital-efficient trading strategies.

#### Share Merging

Traders holding equal quantities of Yes and No shares for the same market leg can merge them to redeem $1.00 per pair. This mechanism ensures price consistency and provides an arbitrage pathway when Yes + No prices deviate from $1.00.

### Resolution System

Yosoku implements two resolution mechanisms to accommodate different trust models and use cases.

#### Two-Tier Resolution (UMA Oracle)

The primary resolution mechanism leverages the UMA Optimistic Oracle for decentralized dispute resolution.

**Tier 1: Proposal**

1. Any participant can propose an outcome by submitting a USDC bond
2. A dispute window opens for other participants to challenge the proposal
3. If no dispute occurs within the window, the proposal is finalized and the proposer's bond is returned

**Tier 2: Dispute**

1. A disputer can challenge the proposal by submitting a higher bond
2. The dispute is escalated to the UMA Oracle via LayerZero cross-chain messaging
3. UMA token holders vote on the correct outcome
4. The winning party receives both bonds (minus protocol fees)
5. The market resolves according to the UMA decision

#### Wallet Vote Resolution

For markets requiring trusted resolution by designated parties, Yosoku supports wallet-based voting.

1. Market creators designate a set of authorized voter wallets
2. Voters cast their resolution votes on-chain
3. Resolution occurs when a majority (>50%) consensus is reached
4. If no majority is reached by the deadline, the market resolves to a 50/50 split, with all shares paying $0.50

### Cross-Chain Architecture

Yosoku's architecture separates trading execution from oracle resolution across chains.

#### Solana Layer

* Order book management and matching
* Position tracking and share accounting
* Vault custody of USDC collateral
* Real-time trade settlement

#### Cross-Chain Messaging (LayerZero)

* Secure message passing between Solana and Ethereum
* Dispute escalation to UMA Oracle
* Resolution receipt and market finalization

#### Ethereum Layer (UMA Oracle)

* Optimistic oracle for disputed outcomes
* Token-weighted voting mechanism
* Economic security through bonding requirements

This architecture combines Solana's high throughput and low latency for trading with Ethereum's established oracle infrastructure for trustless resolution.