Settlement
In prediction markets, settlement happens after the outcome of an event has been officially confirmed. It is the step where the market applies the result to all open positions. During settlement, winning positions receive payouts and losing positions expire without value. Any locked collateral is released based on the final outcome.
Settlement follows resolution but is not the same thing. Resolution decides what happened, while settlement determines who gets paid and closes the market economically. This process can be automatic or governed by predefined rules and checks. Clear settlement logic reduces disputes and ensures consistent treatment of participants.
For analysts, settlement marks the end of the market lifecycle. After settlement, prediction markets data becomes fixed and suitable for evaluation and backtesting.
Why It Matters
Settlement ensures that prediction markets function as real forecasting tools. Without proper settlement, probabilities would have no economic meaning.
What does settlement mean in prediction markets?
In prediction markets, settlement is the step where outcomes are applied to positions. It finalizes gains and losses based on the resolved result. This process closes the market financially. It is essential for trust and accountability.
How does settlement affect prediction markets data?
Settlement freezes prediction markets data for an event. No further price or probability changes occur after this point. Analysts rely on settled data for accuracy measurement and historical analysis. Settlement defines when data becomes final.
Why is settlement important for prediction markets APIs?
Prediction markets APIs expose settlement status and final outcomes. This allows systems to detect when markets are complete and ready for evaluation. Settlement data is critical for backtesting, reporting, and model training. APIs make settlement machine-readable and reliable.
Real-World Example
On Polymarket, once an event is resolved, settlement distributes payouts to holders of the winning outcome. All positions are then closed and the market ends.
Settlement and FinFeedAPI
FinFeedAPI’s Prediction Markets API provides prediction markets data that reflects settlement status and final outcomes. Analysts can track when markets move from resolution to settlement and retrieve finalized records. This supports performance analysis, lifecycle tracking, and historical research. The API enables consistent handling of settlement across prediction markets.