Glossary
Use this glossary to keep terminology consistent across pages.
Conditionals
Conditionals are markets whose payout depends on the value of a datapoint (price, index, KPI) conditional on the outcome of a defined condition.
See What are conditionals? for more background.
Collateral token
The collateral token is the asset traders deposit to open and maintain positions in conditionals.
On Butter, collateral is USDC.
See Getting started for how deposits work in the app.
Conditional market
A conditional market is the set of branches that trade the future value of a datapoint across a mutually exclusive set of outcomes. Each outcome defines a branch with its own branch price.
Event
An event is a real-world situation or decision with a predefined set of outcomes, such as a central-bank meeting, macroeconomic print, earnings release, governance vote, or regulatory ruling.
Each event defines a set of mutually exclusive outcomes, each linked to its own branch in the conditional market.
Event market
An event market is a categorical market that trades the probability of each event outcome via YES and NO positions per outcome.
Event markets are paired with, but separate from, event conditionals.
YES token
A YES token is an outcome-specific claim in an event market that pays 1 USDC if its outcome is realized, and 0 USDC otherwise.
NO token
A NO token is an outcome-specific claim in an event market that pays 0 USDC if its outcome is realized, and 1 USDC otherwise.
In a categorical market, "NO for outcome outcomeIndex" means "any outcome except outcomeIndex".
Branch
A branch is the market on a datapoint conditional on one specific outcome of a conditional market.
Only the realized branch settles to a nonzero value.
Conditional USDC
Conditional USDC represents how much USDC you have available to trade in a specific branch.
Conditional USDC in the realized branch is redeemable for actual USDC at settlement, while conditional USDC in unrealized branches expires worthless.
In Multi-Branch mode (Multi Mode), opening a position mints conditional USDC across all branches for the same market and leaves you holding conditional USDC balances in branches you did not trade.
In Single-Branch mode (Single Mode), Butter exchanges conditional USDC from non-selected branches into one selected branch before opening or increasing the position.
See Conditional tokens.
Branch price
The branch price is the market-implied future price of the asset in a given branch, conditional on that branch's outcome occurring.
It reflects what traders collectively believe the asset's price will be if that outcome happens and is the price used to compute position values in that branch.
See How to trade.
Settlement
Settlement is the process of resolving a conditional market, posting the settlement price for the realized branch, updating token values, and enabling users to redeem positions for collateral.
Branches linked to unrealized outcomes become worthless, while the realized branch settles to its settlement price.
See the "Exit and settle" section in Getting started.
Expiry date
The expiry date is the latest timestamp by which a conditional stops trading and moves into settlement.
If the event occurs before the expiry date, the market closes and settles shortly after the event once the reference price is observed.
If the event has not occurred by the expiry date, the market still closes and settles based on the rules defined for that event.
See How to trade for how settlement timing affects pricing.
Settlement price
The settlement price is the asset price for a branch that the oracle reports at settlement and that determines how much collateral long and short positions in the realized branch can be redeemed for.
It is the price level that all positions in that branch settle against.
See Scalar tokens.
Oracle
The oracle is the on-chain service that reports which branch is realized and the settlement price, defined as the median price over a two-hour window that starts 12 hours after the event timestamp or market expiry, whichever occurs first, used to settle that branch.
Butter uses Reality.eth to report this settlement data.
Forecasted impact
Forecasted impact describes how much the market expects an event to move an asset's price.
It looks at price differences between branches for the same event-asset pair and expresses those differences as a percentage of the asset's current spot price.
See How to trade.
Spread
Spread reflects the percentage difference between an asset's price in a given branch, and its spot price.
This reflects how the market expects the asset's price to change, were this branch's outcome to be realized.
See How to trade.
Position
A position is a trader's net long or short exposure in a specific branch of a conditional market.
For example, holding a long position in the "ETHUSD if earnings beat" branch means your P&L depends on the ETHUSD settlement price if that branch's outcome occurs.
See Getting started.
Size
Size is the amount of underlying exposure a position represents, expressed in asset units within a branch.
A long position with size of 0.5 BTC in a given branch means the position is long 0.5 BTC conditional on that branch's outcome occurring.
Position value
Position value is the notional value of a position, equal to its size multiplied by the branch price.
A position with size 0.5 BTC in a branch with a branch price of $60,000 has a position value of $30,000.
Collateral
Collateral is the amount of conditional USDC locked to support a given position.
It equals the value of the long or short tokens that constitute the position and represents how much conditional capital the position is using, which is different to the position's notional value.
Bounds
Bounds are the lower and upper price levels that define the scalar payoff range for long and short tokens in a branch.
The lower bound is the minimum asset price the scalar market is designed to cover, and the upper bound is the maximum price.
Inside this interval, long and short token payoffs change linearly with the asset price, while outside it their payoffs are clamped so that one side pays 1 USDC and the other pays 0.
Bounds are the same for all branches of a given event-asset pair and are fixed when the market is created.
See Scalar tokens.
Scalar-to-asset ratio
The scalar-to-asset ratio is the number of scalar tokens required to obtain one unit of asset exposure in a branch.
It equals the width of the scalar bounds expressed in price units, so for bounds between $60,000 and $110,000 on BTCUSD, the ratio is 50,000 long and short tokens required per 1 BTC of exposure.
See Scalar tokens.
Leverage
Leverage is the ratio of a position's notional value to the conditional USDC required as collateral.
It depends on both the scalar bounds and the current conditional price in the branch and describes how much price exposure you obtain per unit of conditional USDC committed to the position.
Long and short tokens
Long and short tokens are fungible claims on the settlement price within a branch of a conditional market.
They are created in matched pairs from collateral, give linear exposure between predefined lower and upper bounds for the asset's price at settlement, and in unrealized branches both sides expire worthless.
See Scalar tokens.
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