2025-12-28 12:20:16

Recently, I’ve been studying the underlying mechanisms of prediction markets, and I’ve gained a lot from diving into Polymarket’s API. Some concepts in prediction markets seem very intuitive at first glance, but upon closer inspection, they’re worth pondering.

For example, why does the order book exhibit a mirror symmetry between Yes and No? I was asked this question, and I didn’t have a good explanation ready at the time. Theoretically, it makes sense, but how can I explain it so that others truly understand?

I’ve tried several approaches. Analogies might be one direction: perpetual contract trading modes include open long, open short, close long, and close short—these four quadrants. The mirror image of Yes/No order books in prediction markets is essentially a reflection of this symmetry in the price discovery process.

Currently, this explanation still seems somewhat technical and hasn’t been effectively communicated to everyone. Should I switch perspectives and explain from the actual needs of traders? Or use more intuitive numerical examples to show how this mirror relationship functions within market liquidity? I feel there might be even better ways to express this that are yet to be discovered.

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JustHodlIt

· 18h ago

The analogy of the four quadrants of contracts is pretty good, but it still feels like taking a detour. --- Honest talk, this kind of symmetry is actually a zero-sum game, no need to make it so complicated. --- Not many people have deeply explored Polymarket, and this idea is worth further investigation. --- Instead of just talking about theory, it's better to present a real case so people can see the mirror relationship for themselves. --- I hadn't thought about the idea of perpetual and prediction markets being aligned; there's something there. --- To put it simply, one person's yes position is another person's no short position—that's so straightforward. --- The real difficulty isn't in explaining, but in helping retail investors realize that prediction markets are not just gambling tools. --- It seems you're struggling with the expression. Actually, the design of Polymarket's order book itself has issues; whether it's mirror or not mirror is just surface-level. --- Approaching from a liquidity perspective is an interesting idea; you might want to try it.

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GasFeeTherapist

· 19h ago

Haha, to be honest, I've been asked this question too. Yes/No mirror is just a natural hedge, it's not that complicated. Looking at the perpetual contract analogy, it's still a bit confusing. Better to just give an example directly. Bet $100 on Trump winning, and the opponent will definitely bet on him losing. The order book automatically becomes symmetrical. I think you're overthinking it. Traders don't really care about the principles; they just want to know if there's enough liquidity to enter and exit.

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DAOdreamer

· 19h ago

Haha, I've also been stuck on this question. The analogy of perpetual contracts is pretty good, but it can indeed be confusing. Basically, it's a two-way betting game—one person buys yes, another buys no. It's a zero-sum game, so it must be symmetrical. Rather than just talking about theories, it's better to give a simple example: for a $100 event, if yes trades for $50 and no for $50, it's automatically balanced. --- Polymarket's design actually reuses the auto-market maker concept from Uniswap, just with a different appearance. --- Wait, are you trying to explain this to beginners or organizing your own thoughts? The answers might differ between these two scenarios. --- Mirror symmetry doesn't really need explanation; it's the essence of market pricing—either/or. --- From a liquidity perspective, it can be more confusing. It's simpler to say that the gains and losses of trading parties are opposite; if yes rises, no must fall. --- My understanding is that the symmetry in order books isn't some deep mechanism; it's just a natural equilibrium formed by participants, nothing too complicated.

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DaoDeveloper

· 19h ago

yeah the order book symmetry thing is actually just probability arbitrage dressed up fancy. once you see it that way everything clicks

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MetaverseVagabond

· 19h ago

Haha, finally someone is paying attention to this detail. Yes/No mirror images are essentially the natural result of a zero-sum game, and there's no need to make it so complicated. Talking too much about perpetual contracts can actually confuse people; it's better to just speak with numbers. The mechanism of Polymarket is actually about enforcing liquidity balance. Mirror symmetry is a reflection of the market's self-correction. I think you're overcomplicating it. Sometimes being simple and straightforward is more convincing. Order book symmetry ≈ the chips on both sides of a bet are necessarily equal. Explaining it this way makes it instantly understandable to anyone. Instead of obsessing over the expression, ask yourself first if you truly understand this mechanism. Starting from actual trading scenarios would be much better; talking about theories on paper can easily lead to pitfalls.

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SeasonedInvestor

· 19h ago

It's a bit complicated, bro. Just mirror it, no need to overcomplicate with fancy language. Betting Yes and betting No are just two opposing choices, nothing mystical about it. Moving the logic of perpetual contracts over feels a bit awkward, and explaining it to beginners might just confuse them. It's better to directly talk about liquidity—traders need easy entry and exit. Numeric examples really help with understanding; they're much more reliable than empty theoretical talk.

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