> For the complete documentation index, see [llms.txt](https://learn.trovemarkets.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://learn.trovemarkets.com/trove-x-polymarkets/prediction-style-perps.md).

# Prediction Style Perps

Prediction markets are usually **binary** (YES/NO). Perpetual markets are **continuous**.

Trove combines the two by creating *perpetual markets whose underlying reference behaves like a probability*.

***

### Why perps + prediction markets stack well

#### Prediction markets (binary/discrete)

* YES/NO outcome (or small set of outcomes)
* price ≈ probability
* final value realized at **resolution**

#### Perpetuals (continuous)

* continuous trading and price discovery
* leverage, margin, liquidations
* you trade *the path of belief* over time, not only the final outcome

**Combining them:**

* The prediction market provides a **probability-like reference**.
* The perp provides **liquidity + leverage + continuous expression**.

***

### What the “underlying” is in a prediction-style perp

For a given market, Trove defines a reference probability signal:

* `p_ref` = probability-like price signal sourced from **Polymarket**
  * typically derived from the YES outcome token’s market price / midpoint

Then Trove publishes `p_ref` into Hyperliquid via HIP-3 oracle updates.

***

### What traders are actually trading

Traders are not buying YES shares.

They are trading a **perpetual** whose mark/index is driven by `p_ref`:

* If probability rises: longs benefit
* If probability falls: shorts benefit
* Funding incentivizes convergence toward the reference

***

### Key design goal: “probability semantics”

To keep the market intuitive:

* The *displayed* market price should be interpretable as a probability (0%–100%)
* The *mark/index* should remain bounded within `[0, 1]`
* Settlement should follow a clear, public resolution rule (see Settlement & Resolution)


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