AGORA Trading Guide v1.0

CRUCIAL is an initiative to use prediction markets, with expert participants, to elicit and aggregate the diverse expertise and knowledge of the participants and produce unified probability forecasts of climate-related risks. These forecasts can evolve as new information becomes available to participants.

Prediction markets are similar to financial markets, or recreational gambling, but they are not intended to transfer the ownership of assets of risks, or to provide entertainment, but are specifically designed to synthesize and summarize information from many sources.

Participants in CRUCIAL markets do not have to pay to take part or stake money. Instead, they are provided with credits with which to trade contracts that pay out more credits if an outcome associated with the contract occurs. The credits that participants accumulate can, however, be converted into cash rewards using funds provided by market sponsors. Through this mechanism it is hoped that prediction markets can become an alternative way of funding climate forecasting research in a performance-driven way.

This document is intended to provide guidance on how to trade in CRUCIAL’s markets. If you are participating, then it is assumed you have relevant domain expertise in forecasting climate-related risks. The aim of this guide is to help you translate your own knowledge and expertise into effective trading strategies. By doing this you will also contribute to improving the collective predictions generated by the markets.

CRUCIAL uses a prediction market platform called AGORA that was specifically designed for climate-related applications.