# Axiom Theorem

## **Market Lifecycle**

Axiom Theorem combines CLOB trading with stake-weighted market resolution. A market can be created, traded, resolved, and redeemed without relying on a centralized bookmaker or governance token.

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### Creation

Only top 50% Axiom Prime stakers may create markets after bootstrap mode, specifying:

* Title, outcomes, trading window, resolution timing, and settlement asset.
* Metadata and evidence sources for clear resolution.
* The logical market structure that the frontend will render.

For CLOB markets, one user-facing market may map to one or more binary `AxiomCTFMarket` contracts under the hood.
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### Trading (CLOB)

Axiom now uses a Central Limit Order Book backed by Conditional Tokens.

At a high level:

* `AxiomConditionalTokens` represents outcome positions as ERC-1155 tokens.
* `AxiomCTFMarket` prepares and resolves each market condition.
* `AxiomCTFExchange` settles matched trades onchain.
* An offchain matching engine handles order ingestion, price-time priority matching, and book state.

### What users do

Users interact with markets through an order book instead of a shared prize pool.

They can:

* place limit orders that rest on the book
* take existing liquidity for immediate execution
* mint complete sets of outcome tokens and sell the side they do not want
* hold winning tokens through resolution and redeem them afterward

### Core CLOB concepts

| Term       | Meaning                                    |
| ---------- | ------------------------------------------ |
| **Bid**    | Highest price a buyer is willing to pay    |
| **Ask**    | Lowest price a seller is willing to accept |
| **Spread** | Difference between best bid and best ask   |
| **Depth**  | Available size at each price level         |
| **Maker**  | Resting order that adds liquidity          |
| **Taker**  | Incoming order that removes liquidity      |

Orders follow **price-time priority**:

1. Better prices match first.
2. If prices are equal, older orders match first.

### Why Axiom uses CLOB markets

| Benefit                           | Description                                                                                       |
| --------------------------------- | ------------------------------------------------------------------------------------------------- |
| **Tradable positions**            | Users can enter and exit before resolution by buying and selling tokens on the book               |
| **Professional market structure** | Price-time priority, visible depth, and signed orders support real market making                  |
| **Onchain settlement**            | Final fills settle through `AxiomCTFExchange`, not a trusted offchain ledger                      |
| **Composable inventory**          | Users can mint complete sets, trade single outcomes, merge positions, and redeem after resolution |
| **Clear incentives**              | Makers, takers, and referrals can all be rewarded through Axiom Points                            |
| **Logical market flexibility**    | One user-facing market can map to multiple binary market contracts while keeping one clean UI     |

### Asset flow

For binary markets, users can always reason about positions as YES and NO tokens.

* Buying YES means paying collateral and receiving YES tokens.
* Selling YES means delivering YES tokens and receiving collateral.
* Holding one share of every outcome forms a complete set that is redeemable for full collateral value.

### Settlement fees

CLOB markets charge protocol fees on settled trades, not on redemption.

Default live fee split:

* `0.50%` to the dev treasury
* `0.25%` to the staker fee recipient
* `0.25%` to the incentives recipient

This is a **1.00% total trade fee** on settled CLOB trades.

### What users see

Instead of pool ratios or time bonuses, users see market microstructure:

* best bid and ask
* order book depth
* last trade price
* price chart built from actual fills
* open orders and fill history
* positions by outcome

Markets can still be binary or multi-outcome, but the trading interface is now order-book based rather than prize-pool based.
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### Proposal (Optimistic Resolution)

The first top 50% staker to submit an outcome proposal becomes the official proposal. They provide evidence URIs and the proposal immediately enters a challenge window (default: 6 hours, governance-adjustable).

* If no challenge is submitted during this window, the proposal is automatically accepted and the market finalizes.
* The proposer receives a fixed consensus bonus (default: $10 USD equivalent, governance-adjustable).
* Any top 50% staker may submit a challenge during the window with an alternative outcome, triggering a governance vote.
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### Challenge & Voting (if triggered)

When a challenge is submitted:

* All top 50% stakers vote between the original proposal and the challenger.
* Vote weight is proportional to staked value.
* Voting window is 24 hours by default.
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### Escalation (if needed)

If the top 50% vote fails to reach consensus because quorum or supermajority is not met, the market escalates to all Axiom Prime stakers.

* The same quorum and threshold logic applies.
* An automatic 24-hour extension can trigger if quorum is not reached.
* If escalation still fails, the market resolves as invalid and unresolved positions are refunded via the redemption path.
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### Settlement and Redemption

Once the outcome is finalized:

* `AxiomCTFMarket` reports payouts to Conditional Tokens.
* Winning positions become redeemable for collateral.
* Users redeem through the market-scoped redemption path or directly through Conditional Tokens.
* CLOB trade fees have already been charged during execution, so redemption itself does not apply another payout fee.

Governance rewards and penalties still apply at resolution:

* incorrect proposers and voters lose stake
* correct participants receive the redistributed penalty pool
* unchallenged proposers receive the fixed proposer bonus
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