How Wins and Losses Work: Beirut Coin

1. Pricing 2. Wins and losses Worked example Calculator 3. Settlement

Prototype note: the demo on this site simulates these mechanics with Beirut Coins. No blockchain transactions or real payments are made until the on-chain integration goes live. One Beirut Coin maps to $1.00 of collateral, one for one.

1. Pricing mechanics and order matching

Binary structure

Every event is a binary question with two outcomes: “Yes” or “No”.

The $1.00 collateral peg

Price(YES) + Price(NO) = $1.00

When a user creates contracts, $1.00 of collateral (pUSD or USDC) is split into exactly one YES token and one NO token.

$1.00 collateral= 1 Beirut Coin

→

1 YES token

1 NO token

Market-driven odds

Matching uses an off-chain Central Limit Order Book (CLOB) with on-chain settlement. Prices move between $0.00 and $1.00 strictly on supply and demand. A YES price of $0.65 implies a 65% market-implied probability.

2. Equating wins and losses

When the event happens or reaches its maturity date, the contract resolves.

Outcome	Winning token value	Losing token value	Net payout
Winning side	$1.00 per share	—	Collateral is redeemed at $1.00 per share.
Losing side	—	$0.00 per share	The token becomes worthless: a 100% loss of your stake.

Profit and loss formulas

Hold to resolution (win)

Net Profit = (Shares Owned × $1.00) − Initial Cost

Hold to resolution (loss)

Net Loss = Initial Cost

Early cash-out (before resolution). You don’t have to wait. You can sell your outcome tokens at any time on the order book.

Realized P&L = (Exit Price − Entry Price) × Shares

Worked example

You buy 100 YES shares at $0.40. The position costs 100 × $0.40 = $40.00, so the market implies a 40% chance.

If YES wins+$60.00Payout $100.00 (100 × $1.00) minus your $40.00 cost.

If NO wins−$40.00Your YES tokens are worth $0.00, so you lose the full $40.00.

Sell early at $0.55+$15.00($0.55 − $0.40) × 100 shares, locked in before the result.

Notice the trade-off: the cheaper the price you pay, the bigger the win if you’re right, and the lower the chance the market gives you.

Try your own numbers

Shares you own Entry price: $0.40 per share Exit price if you sell early: $0.55 per share

Initial cost

Payout if your side wins

Net profit if you win

Net loss if you lose

Early cash-out P&L

Buying NO instead? Use the NO price, which is $1.00 minus the YES price.

3. Settlement and the resolution oracle (UMA)

To keep outcomes objective and decentralized, markets settle through UMA’s Optimistic Oracle.

Resolution criteria

Each market lists explicit rules and acceptable sources, such as official statistics, named news outlets, or exchange price feeds.

Proposal

After the event ends, a proposer posts a bond (for example $500 USDC) and asserts the winning outcome, YES or NO.

Liveness and challenge window

A 2-hour window opens. If nobody disputes the proposed result, the market finalizes automatically.

Dispute resolution

If a proposal is contested, UMA tokenholders vote to establish the ground truth through a decentralized voting process.

Redemption

Once finalized, holders of winning tokens call the smart contract to redeem their shares for pUSD or USDC collateral.

Edge cases: canceled matches or walkovers settle by each market’s predefined terms. For example, a market can resolve 50–50 at $0.50 per share instead of refunding orders. Always read a market’s exact rules before you trade.

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How wins and losses work