Gamble Classification Engine

Overview

This pillar classifies prediction markets into four distinct categories based on their underlying risk and predictability. It helps you understand the nature of the market before you commit capital, ensuring your strategy aligns with the potential for an analytical edge.

What It Does

The engine analyzes a market's resolution criteria, the availability of relevant public data, and the potential for fundamental analysis. It then assigns a category: 'Investable' for data-rich markets, 'Speculative' for high-uncertainty markets with some information, 'Pure Gamble' for random outcomes, or 'Arbitrage' for structural opportunities.

Why It Matters

It prevents you from wasting time and money on markets where no analytical edge is possible. By focusing on investable or speculative markets, you can apply your research skills effectively and avoid what are essentially coin flips.

How It Works

First, the engine parses the market's rules and resolution source for clarity and objectivity. Second, it scores the topic's data availability using a proprietary model. Finally, it weighs these factors to calculate a risk profile and assign the most fitting category, from 'Arbitrage' (lowest risk) to 'Pure Gamble' (highest risk).

Methodology

A market's classification is determined by a weighted score: Score = (0.5 * InformationAvailability) + (0.3 * ResolutionClarity) + (0.2 * OutcomeDeterminism). 'Investable' markets score > 80, 'Speculative' 50-80, and 'Pure Gamble' < 50. 'Arbitrage' is a separate classification triggered by detecting structural price discrepancies between related markets.

Edge & Advantage

This provides a meta-analytical edge by ensuring you apply the right strategy to the right type of market, systematically avoiding unanalyzable risks.

Key Indicators

• Market Category

  high

  The final classification: Investable, Speculative, Pure Gamble, or Arbitrage.

• Information Alpha Score

  high

  A 1-100 score indicating the potential for research to provide a predictive edge.

• Structural Risk Index

  medium

  A measure of risk from ambiguous market rules or low liquidity.

Data Sources

• Prediction Market Platform API

  Provides market rules, resolution criteria, volume, and liquidity data.

• Proprietary Data Scarcity Model

  An internal model that estimates the quantity and quality of public data on a market's topic.

Example Questions This Pillar Answers

• → Will the Fed raise interest rates in their next meeting? (Investable)
• → Will SpaceX launch Starship successfully on its next attempt? (Speculative)
• → Will the price of Bitcoin end in an odd or even number today? (Pure Gamble)

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