> For the complete documentation index, see [llms.txt](https://docs.hermestrade.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.hermestrade.xyz/core-concepts/core-concepts.md). # Core concepts The key ideas behind prediction markets on HermesTrade — markets, shares, the order book, and how it all fits together. HermesTrade is a central limit order book for prediction markets on the Monad blockchain. Understanding these six concepts is enough to trade confidently and integrate with the API.


Markets and events	How events and markets are structured, and what the key schema fields mean.	Markets and events
Outcome shares	What YES and NO tokens are, how they are created and destroyed, and how to read your position.	Outcome shares
Order book	How the CLOB works, order types and statuses, spread, tick size, and negRisk.	Order book
Smart wallets	How Safe smart wallets and the Relayer enable gasless trading on Monad.	Smart wallets
Resolution and disputes	The adjudication phases, how to submit dispute evidence, and how payouts work.	Resolution and disputes
Fees	Taker fee rates in basis points, how fees appear in the API, and how to look up current rates.	Fees

*** ### The mental model in 60 seconds Every tradeable question on HermesTrade follows the same path: **Event** — a real-world happening (a sports match, an election, a protocol milestone). An event is the top-level container; it groups one or more markets. **Market** — a single binary question within an event ("Will Team A win?"). Each market has exactly two outcomes. **YES/NO tokens** — ERC1155 outcome shares. Owning 1 YES share is a claim on $1.00 if the market resolves YES. Prices move between $0.01 and $0.99, reflecting the crowd's implied probability. **Orders in the CLOB** — traders post limit orders (buy or sell shares at a price) into a central limit order book. Prices are set by real bids and asks. **Fill** — when a buy order and a sell order cross, they match. New YES/NO share pairs may be minted, or existing shares may change hands. **Position** — your running balance of outcome shares across all markets. **Resolution** — when the real-world outcome is known, the market closes. The multi-phase adjudication process confirms the result. **Payout** — winning shares redeem at $1.00 each; losing shares redeem at $0.00. Collateral returns to winners. {% hint style="info" %} The pages in this section are ordered by learning dependency. Read **Markets and events** first, then **Outcome shares**, then **Order book** — each page builds on the one before it. {% endhint %} --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.hermestrade.xyz/core-concepts/core-concepts.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.

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