Conditional Token
A digital token whose value or payout depends on the outcome of a specific future event or condition.
A conditional token is a crypto asset that represents a claim on a possible outcome of an event, such as an election result, sports match, policy decision, or market price level. It is usually created by locking collateral, like a stablecoin, into a smart contract and splitting it into tokens tied to different outcomes. When the event is resolved by an agreed data source or oracle, only the tokens linked to the winning outcome can be redeemed for the collateral, while the others become worthless or worth less.
Conditional tokens matter because they let prediction markets and other event-based applications trade risk in a transparent, programmable way. For example, a market on “Will Candidate A win?” might issue a “Yes” token and a “No” token. Traders can buy or sell those tokens based on their beliefs, and the prices can reflect the market’s estimated probability. They can also be combined or used in more complex markets, but their core purpose is to make event outcomes tradable on-chain.
Other terms in Prediction Markets
Outcome Token
A digital token that represents a specific possible result in a prediction market and pays out if that result is confirmed.
Prediction Market
A prediction market is a trading venue where people buy and sell contracts tied to the outcome of future events.
Resolution Source
A resolution source is the official reference used to decide the outcome of a prediction market after the event occurs.