Prediction markets are often mythologized as truth machines, but in reality — they are more like a decentralized judicial decision-making system.

In simple terms, how any transaction is ultimately settled fundamentally depends on how facts are defined and how the terms are interpreted. Things like price, temperature, and sports scores are relatively easy to judge because the results are clear and there is little room for interpretation. But in the complex propositions of the real world? The problem is often not whether technology can achieve it, but how the resolution is written — that is, the wording of those settlement conditions.

This ultimately boils down to contract design. The core goal is to minimize the interpretive space and reduce opportunities for "flexibility." To truly make prediction markets work, one must do solid work from this perspective.