> ## Documentation Index
> Fetch the complete documentation index at: https://docs.kash.bot/llms.txt
> Use this file to discover all available pages before exploring further.

# Market Mechanics

> How Kash markets are created, traded, resolved, and paid out

<Note>
  Every Kash market lives on the Base blockchain, trades in USDC, and follows the same lifecycle: created → active → frozen → resolved or cancelled → claim. This page covers each stage, plus resolution, fees, and the guaranteed-exit mechanism.
</Note>

<img style={{ borderRadius: '0.5rem' }} className="block dark:hidden" src="https://mintcdn.com/kash/ccJqSmLmwHitLEdQ/assets/cover/cover.svg?fit=max&auto=format&n=ccJqSmLmwHitLEdQ&q=85&s=bd474b91f522088935255f33b33ddd96" alt="Hero Light" width="1500" height="500" data-path="assets/cover/cover.svg" />

<img style={{ borderRadius: '0.5rem' }} className="hidden dark:block" src="https://mintcdn.com/kash/ccJqSmLmwHitLEdQ/assets/cover/cover.svg?fit=max&auto=format&n=ccJqSmLmwHitLEdQ&q=85&s=bd474b91f522088935255f33b33ddd96" alt="Hero Dark" width="1500" height="500" data-path="assets/cover/cover.svg" />

# Market Structure

<AccordionGroup>
  <Accordion title="Multi-Outcome Markets">
    Kash markets have **2 to 8 outcomes** (the contracts support up to 100). A binary market is simply the two-outcome case: Yes and No.

    Markets are also **multi-winner capable** — a resolution can declare more than one outcome a winner, in which case all winning tokens share the market's reserve pro-rata.
  </Accordion>

  <Accordion title="Outcome Tokens (ERC-1155)">
    Each market issues its outcomes as **ERC-1155 tokens** — one contract per market, with a token ID per outcome. Buying an outcome mints tokens to your wallet; selling burns them.

    Outcome tokens are **not** fixed "\$1 if it wins" shares. Winning tokens redeem **pro-rata against the market's USDC reserve** — that's why the app shows an *estimated payout if this outcome wins* on every trade preview rather than a per-share dollar promise. See the [Custom AMM](/getting-started/features/custom-amm) page for the pricing model.
  </Accordion>

  <Accordion title="Implied Chance">
    The headline percentage on each outcome is its **implied chance** — how the market's capital is concentrated across outcomes. Implied chances always sum to 100% and equal the break-even probability of buying that outcome at the margin.
  </Accordion>
</AccordionGroup>

# Market Lifecycle

<Steps>
  <Step title="Creation">
    Markets are created through the webapp's creation flow: you describe the market, set outcomes, duration, and resolution rules, then submit it for review. A **market creation fee** (currently 20 USDC) is charged when the market is approved and published — the fee seeds the market's initial liquidity, so trading is possible immediately. See [Creating Opportunities](/getting-started/guides/creating-opportunities).
  </Step>

  <Step title="Active">
    Trading is open 24/7. Prices move with every buy and sell along the AMM curve. Anyone can trade, discuss the market in its chat room, and share it.
  </Step>

  <Step title="Frozen">
    When the market's trading window ends, trading freezes. Positions are locked while resolution is pending — no new buys or sells are accepted.
  </Step>

  <Step title="Resolved or Cancelled">
    The oracle resolves the market by declaring the winning outcome (or outcomes), with the resolution recorded on-chain. If the underlying event is voided or the market can't be fairly resolved, the market is cancelled instead — cancellation snapshots each outcome's price at that moment for refunds.
  </Step>

  <Step title="Claim">
    Once a market is resolved or cancelled, your payout becomes claimable directly from your [Portfolio](/getting-started/guides/winning) — **Claim winnings** on resolved markets, **Claim refund** on cancelled ones. Redemption always executes from your own smart account; Kash never takes custody of your winnings.
  </Step>
</Steps>

# Resolution

<AccordionGroup>
  <Accordion title="How Markets Are Resolved Today">
    Kash markets are resolved by the **Kash oracle** — a multisig operated by the team, transitioning to a **Gnosis Safe M-of-N** setup. The oracle reviews the market's resolution rules and sources, then submits the winning outcome (or outcomes) on-chain, where the resolution and its evidence are permanently recorded.

    An **LLM-council resolution system** — where a panel of independent AI models evaluates evidence and proposes the outcome — is on the roadmap. It is planned, not live: today, resolution is a human-operated multisig process.
  </Accordion>

  <Accordion title="Contract-Enforced Exit If the Oracle Goes Silent">
    Recovery doesn't depend on trusting the oracle. If a market passes its resolve time and the oracle does not act, **anyone** can cancel the market after a grace period expires — this is enforced by the contract itself.

    On cancellation, each outcome's price is snapshotted, and every holder can redeem their tokens at that frozen price. By construction, the sum of all refunds equals the market's reserve — recovery from a stuck market doesn't depend on Kash or the oracle, because the cancellation path is enforced by the contract itself (subject to normal smart-contract risk).
  </Accordion>

  <Accordion title="Payouts and Refunds">
    * **Resolved markets:** winning tokens redeem pro-rata against the reserve — `payout = reserve × your tokens / total winning supply`. Losing tokens are worth zero.
    * **Multi-winner markets:** all winning outcomes share the reserve via their combined supply.
    * **Cancelled markets:** each outcome refunds at its snapshotted cancellation price. No new fees are charged on cancelled redemptions, but trading fees already paid are not refunded — so a refund is not necessarily your entry price.
    * **No redemption fee** in either case.
  </Accordion>
</AccordionGroup>

# Fees

| Action                      | Fee                                                                                                         |
| --------------------------- | ----------------------------------------------------------------------------------------------------------- |
| Buy                         | 1% protocol fee (taken from your USDC before it enters the curve)                                           |
| Sell                        | 1% protocol fee + 1% AMM sell fee (the AMM fee stays in the market's reserve, benefiting remaining holders) |
| Market creation             | Creation fee (currently 20 USDC), charged on approval — seeds the market's liquidity                        |
| Claiming winnings / refunds | No fee                                                                                                      |

Every trade preview shows the exact fee breakdown and net amounts before you confirm.

# Infrastructure

<AccordionGroup>
  <Accordion title="Base, USDC, and Gasless Trading">
    * **Base network:** all Kash contracts run on Base, Ethereum's low-cost L2.
    * **USDC:** every market trades and settles in USDC.
    * **ERC-4337 smart accounts:** every user gets a smart account with sponsored gas — you never need to hold ETH to trade. (On mainnet, self-service claims may net a small gas cost in USDC out of your winnings.)
  </Accordion>

  <Accordion title="Slippage Protection">
    Every trade carries an on-chain minimum-output guard: if the market moves between your quote and execution beyond your tolerance, the transaction reverts instead of filling at a worse price. The same guards apply to redemption paths.
  </Accordion>
</AccordionGroup>

<Tip>
  Understanding the lifecycle — especially that payouts are pro-rata against the reserve and claimable from your portfolio — is the single most useful thing to know before trading. Read [Claiming Your Winnings](/getting-started/guides/winning) next.
</Tip>

<CardGroup cols={2}>
  <Card title="The Kash AMM" icon="chart-mixed" href="/getting-started/features/custom-amm">
    How pricing and liquidity actually work
  </Card>

  <Card title="Claiming Winnings" icon="trophy" href="/getting-started/guides/winning">
    Redemption, refunds, and claims
  </Card>
</CardGroup>