How it works

1Winners are paid out of losers' stakes

Every stake goes into one of two pools, YES or NO. When the market settles, the losing pool is handed to the winning pool and divided among the winners in proportion to what each of them staked.

That is what parimutuel means: the pot is shared out after the event, not priced before it. You are not buying a share at a quoted price and nobody takes the other side of your trade. There is no order book, no automated market maker, and no price oracle anywhere in the system — a market resolves by reading The Hood's own launchpad contracts on this chain.

The odds you see on a market are therefore a description, not an offer. “YES 62%” means the YES pool currently holds 62% of the pot. It is a fact about right now, and it changes every time somebody stakes.

You are paid in the same currency you staked. A market denominated in ETH pays ETH; one denominated in a project token pays that token. Nothing is converted.

2What a market can ask

Three questions, and every one of them is a number this chain already knows.

A market pins down one subject, one of those three measurements, a comparison (= ≠ > ≥ < ≤) and a number. That tuple is written on chain when the market is created and can never be edited — not by the market's creator, not by anyone.

The subject has to be real. A launch token is checked against The Hood's launch factory before the market exists, so nobody can write a market about a contract they wrote themselves and control the answer to.

What cannot be asked

• Anything off chain. Exchange price, trading volume, holder counts, followers, listings. The settlement step is a contract call and nothing else, so a question no contract can answer has nowhere to get an answer from.
• Anything that moves both ways. ETH raised, tokens sold, percentage progress toward graduation, curve FDV, creator tier. A buy pushes them up and a sell pushes them back down, so a losing staker could shove the number over the line in the minute the market settles and unwind straight after. Markets on these are refused at creation.
• Anything cheap to move, even one way. A creator's launch count only ever rises — but a launch costs the launch fee and no opening buy, so the subject of a “launched at least N” market could simply mint the launches after staking closed and take the pot at a block of their choosing inside the settlement window. Their graduated count is asked instead: each unit of it takes a full real raise, which is the honest way to win it.
• Questions with only one possible answer. “progress ≥ 0” is always true; “graduated > 3” is always false. Both are rejected, because a market nobody can lose just takes one side's money and hands it to the other with the result known in advance.

One detail worth knowing: “will it graduate” is answered from whether the curve reached its target, not from whether the graduate() button has been pressed. Pressing it is a formality anyone can pay gas for; reaching the target takes the full raise and cannot be undone.

3Placing a stake

Pick a side, stake at least the market's minimum in the market's currency, before the deadline. There is no un-stake.

1. Choose YES or NO. You may hold both if you want to; only the winning side pays.
2. Check the currency. Each market is denominated in exactly one thing — the chain's own ETH, a listed stablecoin, or a launch token whose project qualified for the list. See what a market can be staked in.
3. Stake before the deadline. At the deadline staking closes for good. There is no late entry, and no way to pull a stake back out before the market settles.
4. ETH is sent with the transaction; a token needs an approval first. For a token, the amount credited is the amount that actually arrives — which matters if the token charges a transfer fee.

The three limits

Those are the values ETH is listed with; every currency carries its own, and the currencies page shows the live figures. The caps exist because these contracts are new. A cap is a blast radius — it bounds what a bug in one market could cost, at the price of not letting you stake more than the cap in it. The contracts were audited by Claude Fable 5; the security assessment and the risk disclosure say what was tested, what was fixed and what is still open.

A market copies its limits and its fee at the moment it is created and never reads them again. Changing a limit later affects new markets only; it cannot change the terms of a market that already holds someone's money.

4How the odds work — the part people get wrong

Your payout is set by the pool split at settlement, not by the split when you staked. Staking at “YES 50%” does not lock in 2×.

This is the one thing about parimutuel that surprises people, so here it is as arithmetic. Everything about your position is a single line of maths:

payout = your stake  ×  (the whole pot − the market's fee)  ÷  the winning pool

The pot and the winning pool are both measured the instant the market settles. Your stake is the only term that is fixed when you place it.

Worked example — 1 ETH on YES, no fee

You stake 1 ETH on YES while the pools sit at YES 2 ETH / NO 2 ETH — an even 50/50. By the deadline another 5 ETH has arrived from other people, and the market settles YES. Where that 5 ETH went decides what you are paid:

Where the late money went	YES pool	NO pool	Pot	Your share of YES	You are paid
Onto YES, with you	8 ETH	2 ETH	10 ETH	1 / 8	1.25 ETH
Onto NO, against you	3 ETH	7 ETH	10 ETH	1 / 3	3.33 ETH

Same 1 ETH, same YES outcome, same 10 ETH pot — and a payout of 1.25 ETH in one case and 3.33 ETH in the other. Nothing you did differed. Only the final split did.

Two consequences, and they run against most people's instinct:

• Money arriving on your side after you stake makes your payout smaller — you are dividing the same pot among more winners.
• Money arriving on the other side makes it bigger — there is more to win and no more winners to share it with.

So staking early into a side that everyone later piles onto can pay barely more than it cost, and a late stake into an unpopular side can pay several times over. Early does not mean better priced. There is no such thing as a price here.

The fee, and the last wei

If a market's currency carries a protocol fee, it comes off the pot once, before the split — 2% on a 10 ETH pot is 0.2 ETH, and the winners divide 9.8. The fee is capped in the contract at 5% and cannot be raised past it by anyone. It is never charged on a refund.

The division truncates, so a payout can be short of the exact figure by less than one wei. That remainder stays in the contract permanently — it is never paid twice and never swept — which is the property that keeps the market solvent.

5How a market settles

At the deadline, anyone can settle the market. The oracle reads the launchpad, compares the value to the market's threshold, and records the answer along with the block it read at and who triggered it.

• No operator, no queue. settle() has no permission check. You never wait for a team to get round to your market — if you won, you can settle it yourself.
• A window, not a moment. Settlement is accepted from the deadline until the window closes: six hours by default, and a market can choose anything from 15 minutes to 7 days when it is created.
• Nobody decides. There is no function anywhere that sets an outcome. The oracle only reads and compares.
• If nobody settles in time, the market voids and everyone is refunded in full. The failure mode is “nobody profits”, never “the wrong side gets paid”.

The settlement guide covers all of it: who can trigger it, why the window exists, what a void means for your money, and what settlement deliberately cannot do.

6Getting paid

You claim. The market never pushes money at you — it holds your payout until you ask for it, and there is no deadline to ask.

• One claim, whole payout. A single call pays your entire entitlement; claiming twice reverts.
• It never expires. There is no claim window, and no mechanism anywhere to sweep unclaimed user funds.
• A pause cannot block a claim. Staking can be frozen protocol-wide; claiming cannot be, by construction.
• Claim to an address that can receive the currency. For ETH, a contract wallet needs a receive() that does not revert — otherwise the claim reverts and your entitlement stays intact for the next attempt.
• A losing stake has nothing to claim. That money is what pays the winners; it is the whole mechanism.

7When something goes wrong

Every failure mode ends in a refund or a payout. A refund is always your full stake, with no fee taken.

The one-sided case is worth reading twice: if the deadline arrives and nobody took the other side, there was nothing to win, so everyone gets their own stake back and no fee is charged at all. Taking a cut of a bet that never had an opposite side would simply be taking your money.