Value Degradation Tracker

Overview

Analyzes how quickly new information gets priced into a market, helping you determine if an opportunity is fresh or already stale. This pillar is essential for timing your trades and avoiding bets on outdated information.

What It Does

This pillar identifies significant information events, like economic reports or company announcements, and measures the market's price reaction over time. It calculates the speed and magnitude of the price change to model an 'information decay curve'. This curve shows how long it takes for the market to fully absorb the new information and reach a new stable price.

Why It Matters

The edge in prediction markets often lies in acting on information before everyone else. This pillar quantifies the 'shelf-life' of an insight, preventing you from wasting capital on news that the market has already fully digested.

How It Works

First, the system timestamps a specific news event or data release. It then tracks high-frequency price data for the relevant market in the minutes and hours that follow. By analyzing the velocity of price movement, it determines the point of peak impact and subsequent stabilization. This process is repeated across many similar events to generate a reliable 'Staleness Score' for new information.

Methodology

The core metric is 'Info-to-Price Latency', calculated as the time delta between an event's timestamp and the point where the market price achieves 90% of its total post-event move. The 'Decay Rate' is modeled using an exponential decay function, P(t) = P_final + (P_initial - P_final) * e^(-λt), where λ is the decay constant derived from historical data. The 'Staleness Score' is a 0-100 composite based on time elapsed versus the historical latency for that market type.

Edge & Advantage

It provides a data-driven stoplight, signaling whether you are early enough to capture alpha or too late and likely to be someone else's exit liquidity.

Key Indicators

• Info-to-Price Latency

  high

  Measures the time it takes for news to be fully reflected in the market price.

• Decay Rate

  high

  The speed at which the predictive value of new information diminishes over time.

• Staleness Score

  high

  A real-time score (0-100) indicating if an opportunity is likely already priced in.

Data Sources

• High-Frequency Market Data Providers

  Provides tick-level price data essential for measuring immediate market reactions (e.g., Polygon.io, Tiingo).

• Real-Time News APIs

  Delivers machine-readable news with precise publication timestamps (e.g., NewsAPI, Bloomberg API).

• Social Media APIs

  Tracks the initial dissemination of breaking news and rumors on platforms like X (formerly Twitter).

Example Questions This Pillar Answers

• → Has the market already priced in the Fed's latest interest rate announcement?
• → Is it too late to bet on a political candidate dropping out after a scandal broke three hours ago?
• → Will ETH price see further upside after the network upgrade news, or is the move complete?

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