Share Price & Prize Pool

Clouded markets use a bonding curve to price shares. There are two kinds of bonding curve in a market: market bonding curve and outcome bonding curve. Every outcome has its own bonding curve, while at the same time sharing one bonding curve for the entire market. The equation for both bonding curves is:

And the overall outcome share price is:

This implies that betting on one outcome raises the entire market price as well, and earlier entry always has a better edge.

Another difference between market shares and outcome shares is that market shares are refundable, but the amounts paid for outcome shares are locked as the prize pool and distributed to holders of the resolved outcome's shares.

Jury NFT

In the first phase of resolution, as described in the earlier chapter, the market is first resolved to the outcome with the most jury votes. The jury is formed by stakers of the jury NFT. The jury NFT costs 3 $HYPE and can be redeemed at any time for 2.99 $HYPE. The remaining 0.01 $HYPE goes to the protocol's AMM-V2 pool to buy back DAO tokens.

1. Commit-Reveal Mechanism

While the market is ongoing, stakers stake NFTs and secretly commit their intended outcome with a commit hash. To generate a commit hash, the staker's wallet signs a deterministic message containing the market and outcome IDs. The resulting signature is hashed to derive a private salt, and the commit hash is then computed from the revealer's address, market ID, outcome ID, and salt. As long as the staker does not change their intended outcome, the commit hash is always reproducible from the same wallet.

2. Random Number

After the market ends, stakers have a 1-day reveal window to reveal their outcomes. If everyone reveals within this window, the market automatically advances to the 1-day challenge window. Once the market ends, stakers can no longer change their committed outcome. Any token not revealed will be slashed, and its value will also go into the protocol pool to buy back DAO tokens.

This matters because the salt revealed along with the outcome is not only what determines the jury outcome via majority vote, but also the source of the random number used to select the jury panel.

The random number is calculated by XOR-ing all the salts revealed by stakers. The XOR calculation ensures the random number is insensitive to reveal order, so it is effectively determined before the market ends. It changes whenever a staker commits or changes their intended outcome, making it unpredictable and irreversible. The only way to tamper with the random number is by withholding a reveal, which the protocol deters by slashing unrevealed NFTs and withholding DAO rewards from the entire jury panel if the market is not fully revealed.

The DAO token reward scales with market duration: each additional day adds 1 DAO token per correctly-voting staker selected into the jury panel.

3. Jury Panel

The main purpose of the random number is to select and form the jury panel. To be clear, the jury panel does not determine the jury outcome — all stakers' votes collectively determine the outcome. Instead, the jury panel determines which NFTs are rewarded with DAO tokens or slashed if their vote turns out to be wrong.

The size of the jury panel is the total number of staked tokens divided by 5, capped at 300.

Challenge & DAO Voting

After all stakers reveal, or one day after the market ends if not all have revealed, the market enters the challenge window. The window lasts 1 day; if no one challenges, the market resolves to the jury outcome. Anyone unsatisfied with the jury outcome can challenge it by staking one jury NFT, triggering a 3-day DAO voting period. The outcome with the most votes wins.

$CLOUDED Tokenomics

The DAO token used in Clouded is $CLOUDED. Its only role is to vote on market outcomes appealed by challengers. There is no initial emission. The only way to earn $CLOUDED is through jury participation.

All revenue is used to buy back $CLOUDED. Revenue comes from two sources: NFT minting and slashing. The protocol maintains its own native AMM-V2 pool and executes buybacks with 20% slippage tolerance and a 30-minute TWAP.

Market Creation

Another use case for the jury NFT is creating prediction markets. Clouded is a permissionless protocol — everyone can mint and stake enough jury NFTs to create a market. The required number of NFTs is dynamically adjusted:

TotalSupply is the total number of NFTs in circulation. In addition to providing market information, the creator must also purchase shares in one outcome at creation time.

Reward

There are three types of reward depending on one's role: jury reward, challenger reward, and trader reward. Market creators receive no direct reward but get to purchase the first shares.

For jury rewards, every staked token that voted correctly shares 10% of the total prize pool. If selected into the jury panel and all staked tokens are fully revealed, the staker also receives DAO tokens. If a staker voted incorrectly, they receive no token reward; if also selected into the jury panel, their NFT is slashed and its value goes to the protocol.

For challengers, the rule is simple. A challenger is rewarded whenever the resolved outcome differs from the jury outcome — the challenger's token shares 10% of the prize pool and earns DAO tokens. On an unsuccessful challenge, the token is slashed with no reward.

For traders, winners share 90% of the total prize pool. The prize pool consists of the accumulated fixed prize from outcome shares and the remaining bonding prize from market shares.

The reward formulas are:

Contracts

CloudedJury: 0xAF069AAef505047Db7f69F50D322F0D7c3cA4f2A

CloudedMarket: 0x37cebb68dCE4b595ee3534f48049eB7e7fA2dB82

CloudedDAO: 0xbEcE7718FB5e189F9a53Ca3D362dD53fA79c5ADE

CloudedManager: 0x8021e4B891CeFAC6E25301b327a92dF169e7390c

Quick Start

A prediction market platform that lets traders use $HYPE to bet on outcomes

How markets work

Prices on Clouded are set by a bonding curve — the more shares an outcome has, the more the next share costs. Every buy splits into two parts: one half goes to the Bonding Pool (refundable if you sell early), the other half goes permanently to the Prize Pool. As the market grows, both pools accumulate. At resolution, they are merged and distributed to winning shareholders.

Cycle Depth measures how actively the market has recycled — total trading volume relative to current holdings. A higher depth means more shares have been bought and sold, with early traders leaving their Prize Pool contributions behind. Implied Reward to Win is the current snapshot: what you'd receive if the market settled right now. Min Reward to Win models the competitive equilibrium — the minimum payout you'd receive after rational buyers have maximally diluted this outcome.

Bonding Curve Pricing

The price of each share is determined by how many shares already exist. The current price per share is:

When you buy, you pay this price twice — once to the market (based on total shares across all outcomes), and once to the outcome you choose (based on that outcome's shares alone). The market price is the same for every outcome; the outcome price depends on how popular that outcome is. A heavily-backed outcome costs more to buy into than a longshot. Selling works in reverse: you only get back the market portion from the Bonding Pool. The outcome portion is non-refundable.

Cycle Depth

Cycle Depth measures how much of this market's activity has gone beyond accumulation — shares bought and then sold back. It compares total trading volume to current holdings.

M is the current total shares; Σ|ΔM| is the cumulative trading volume across all buys and sells. A Cycle Depth of 0% means no one has sold — pure accumulation, no round-trips yet. 100% means the equivalent of every current share has turned over once. When Cycle Depth is low, buying into less popular outcomes offers the most value.

Colour coding: red below 15%, amber 15–35%, green at 35% and above.

Min Reward to Win & Implied Reward to Win

Two reward estimates are shown when you buy an outcome:

Implied Reward to Win — what you would earn if the market settled right now. It takes the current pool and divides it proportionally by shares. Think of it as a live snapshot.

Min Reward to Win — the worst-case floor. It assumes every rational buyer who can profit from this outcome will enter, driving your share of the pool down to the minimum.

Resolution

When trading closes, the market enters a timed resolution sequence. A randomly selected jury of NFT holders has one day to reveal their verdict. The result then sits in a one-day appeal window — if challenged, DAO token holders vote for three days to override it. If unchallenged, the market settles immediately.

Once the final outcome is set, anyone can trigger Resolve Market. Winners can then Claim Reward.