Skip to main content

​
Negative risk markets

Forkast occasionally deploys winner-take-all events as negative risk structures. In these setups, every market inside the event references the same collateral pool, so a NO share in one market can be turned into a YES share in every other market. The mechanism is enabled on Polygon Amoy first, mirroring production layouts before we go live. Our APIs expose the negRisk boolean at the event level. When it is true, make sure your app understands the conversion logic described below.

​
Why negative risk exists

  • Capital efficiency — Liquidity providers can price many correlated markets with the same collateral rather than locking funds per market.
  • Consistent resolution — Because the markets share a pool, only one of them can resolve positively. The convert action enforces this invariant.
  • Simpler hedging — Traders can move into or out of exposure without bridging assets; they convert across markets in a single on-chain call.

​
Convert flow

Conversions are routed through the Negative Risk Adapter contract. To exercise it:
  1. Approve the adapter to spend your outcome tokens.
  2. Call the adapter’s convert method, specifying the event, market you are exiting, and the destination market.
  3. Receive the equivalent YES balance in the target market; your NO tokens are burned so the invariant holds.
Forkast exposes the adapter ABI and address alongside every negative-risk event announcement. Until the mainnet release, rely on the Amoy deployment shared in those announcements.

​
Augmented negative risk

Some events need room for unnamed outcomes that may appear later. In those cases we enable augmented negative risk by setting both enableNegRisk = true and negRiskAugmented = true.
  • Named outcomes are meant for trading.
  • Placeholder outcomes (for example, Participant A, Participant B) can later be clarified through our bulletin board. Do not trade them unless they become fully specified.
  • The explicit Other outcome only resolves if the winning scenario was never given a dedicated market.
When augmented negative risk is active, conversions should still ignore placeholder tokens until they have been clarified. The Forkast UI hides them automatically, but third-party front ends should apply the same rule.

​
Detecting support through APIs

  • Data API — The negRisk and negRiskAugmented flags are present on event payloads.
  • Subgraphs — Query the metadata entity for enableNegRisk to show conversion controls.
  • Relayer — Convert transactions can be sent through the relayer like any other Safe call if your user lacks gas on Amoy.
If you are unsure whether a historical market supported negative risk, check the event payload in the Data API or scan the Amoy subgraph for adapter interactions tied to that conditionId.