FAQ

General

What is MarkIt?

MarkIt is a binary prediction market protocol on Base L2. You take positions on real-world outcomes (currently NBA games) using USDC. If your position is correct, your tokens resolve to 1.00 USDC each. If not, they're worth 0. Liquidity Providers earn fees from trading activity without taking directional positions.

What network is MarkIt on and why Base?

MarkIt runs on Base, an Ethereum Layer 2 built by Coinbase. Base offers sub-cent gas fees, fast confirmations (~2 seconds), and inherits Ethereum's security. This makes small positions practical — a 5 USDC position isn't eaten up by gas fees like it would be on Ethereum mainnet.

What token do I need to use MarkIt?

You need two tokens on the Base network:

• USDC — For taking positions and LP deposits. All settlements are in USDC.

• ETH — A tiny amount for gas fees. Most MarkIt transactions cost less than 0.01 USDC in gas.

Is MarkIt available in the US?

MarkIt is a permissionless protocol deployed on a public blockchain. Access is determined by local regulations. Users are responsible for ensuring their use of the protocol complies with applicable laws in their jurisdiction.

How is this different from Polymarket?

Polymarket uses an order book model where traders match directly with each other. MarkIt uses an LP-underwritten model — Liquidity Providers supply the capital, and pricing is determined algorithmically based on demand skew. Key differences:

• No order book. Prices are set by a dynamic curve, not by matching buyers and sellers.

• No sell function. You exit positions by hedging (buying the opposite side), not by selling back.

• LP-backed solvency. The contract always holds enough to pay all winners — guaranteed by a hard on-chain invariant.

• Base L2. Sub-cent gas fees vs. Polygon (Polymarket's current chain).

Trading

Can I sell my position before resolution?

There is no sell button. MarkIt deliberately excludes a sell function to strengthen solvency guarantees — no USDC leaves the contract before resolution. However, you can hedge by buying the opposite side to lock in a guaranteed P&L regardless of the outcome. See Hedging and Locking Profit.

What's the minimum position size?

The minimum position is 1.00 USDC. There is no maximum position, but large positions are constrained by the pool's liquidity and the dynamic skew cap.

What happens if I don't claim my winnings?

Your winning tokens remain redeemable indefinitely — there is currently no expiration. The USDC stays in the contract until you call redeem(). You can claim at any time after the market resolves.

Why do prices sometimes not add up to exactly 1.00 USDC?

The sum of YES price + NO price is intentionally slightly more than 1.00 USDC. The difference is the spread, which includes two fees: a dynamic LP fee (0.25–5%, stays in the pool) and a flat 2% protocol fee (sent to the protocol treasury). A wider spread means higher LP fees, which varies based on market skew. See Understanding Prices.

Markets

How are markets resolved?

Markets are resolved by the MarkIt operator (currently the MarkIt team). For NBA games, the operator uses ESPN's public API to verify final scores and submits a resolution transaction. An automated system handles most resolutions within minutes of a game ending. See Resolution.

What happens if a game is postponed or cancelled?

If a game is postponed, the market remains open until the game is played and the operator resolves it. If a game is cancelled, the operator handles it on a case-by-case basis. Future versions will include more formalized rules for edge cases.

What's utilization and why does it matter?

Utilization is the ratio of total open interest to pool size. It measures how much of the LP pool is actively backing positions. Higher utilization means the pool is generating more fee revenue per USDC deposited. For LPs, high utilization = better returns. For traders, very high utilization may mean the pool is close to its risk limits.

Liquidity Providers

When can I withdraw my LP deposit?

Vault LPs: You can request a withdrawal at any time. Withdrawals enter a FIFO queue and are fulfilled as float (undeployed USDC) becomes available — typically when markets resolve and the vault collects capital.

Per-market LPs: Withdrawals are only available after the market resolves and enters the Withdrawable state. You cannot withdraw while the market is Open or CloseOnly. Plan your capital commitment around the market's full timeline.

Are LP deposits protected?

The solvency invariant guarantees that the contract can pay all winners, but it does not guarantee LP principal protection. In heavily one-sided markets where the crowded side wins, LP returns may be less than the initial deposit. In balanced markets, LPs typically receive their capital back plus fees. See Risk and Exposure.

Security

Is the code audited?

MarkIt is currently in testnet phase on Base Sepolia. The codebase includes an extensive test suite with 90+ security regression tests (including 16 fuzz tests) covering critical vulnerabilities and economic attack scenarios, plus 68 vault-specific tests. A formal third-party audit has not yet been completed. The contract source code is available for review.

MarkIt is in testnet phase. Do not deposit funds you cannot afford to lose. The protocol is under active development, and while security is a priority, the contracts have not been formally audited by a third party.