Core Concepts

Fair Value

In Yala, fair value refers to the probability that a specific outcome will occur by a defined future time.

Fair value:

• Is expressed as a probability

• Serves as a reference point, not a guarantee

• Enables rational comparison against market prices

In practice:

• If fair value > market price of “Yes,” buying Yes or selling No is statistically favorable

• If fair value < market price of “Yes,” selling Yes or buying No is statistically favorable

Fair value does not eliminate uncertainty, but it improves long-term decision quality and expected outcomes in probability-based markets.

Risk-Neutral and Subjective Fair Value

Yala’s roadmap distinguishes between two forms of fair value:

Risk-Neutral Fair Value

• Derived primarily from historical trading data

• Reflects no-arbitrage pricing logic

• Forms the foundation of Yala’s early and mid-stage agents

• Risk-neutral fair value leverages the defining property of prediction markets, where prices directly encode probabilities, making them uniquely suitable for probabilistic calibration.

Subjective Fair Value

• Incorporates additional signals such as sentiment, macro events, and domain-specific context

• Introduced in later stages of the roadmap

• Used to refine probability estimates beyond pure market-based inputs