The Fundamental Difference
Binary Markets
“Will Bitcoin be above $100,000 on December 31?” Options: Yes or No Payout: Yes = $1, No = $1
Continuous Markets (Skepsis)
“What will Bitcoin’s price be on December 31?” Options: Any range within the market bounds Payout: $1 per share if outcome lands in your range
Visual Comparison
Binary: One Data Point
Continuous: Full Distribution
Information Density
What Binary Markets Tell You
A single binary market at 45% “Yes” tells you:- There’s a 45% chance of crossing the threshold
- That’s it
What Continuous Markets Tell You
A continuous distribution tells you:- Expected value: Where the market thinks it’ll land
- Confidence: Is the distribution narrow (confident) or wide (uncertain)?
- Skew: Is the market more bullish or bearish?
- Tail risk: What’s the chance of extreme outcomes?
- Mode vs Mean: Most likely outcome vs average expected outcome
Edge Cases: Where Binary Fails
The “Almost Right” Problem
Binary market: “Will BTC hit $100K?”| Scenario | BTC Price | Bet | Result |
|---|---|---|---|
| A | $99,999 | Yes | ❌ LOSE |
| B | $100,001 | Yes | ✅ WIN |
| Scenario | BTC Price | Range Bet | Result |
|---|---|---|---|
| A | $99,999 | 102K | ✅ WIN |
| B | $100,001 | 102K | ✅ WIN |
The “Precision Penalty” Problem
Binary framing forces false precision:The “Missing Nuance” Problem
Binary: “Will it rain tomorrow?”- Doesn’t capture: How much rain?
- Drizzle and monsoon both = “Yes”
- No way to express “probably light rain”
- 0.0-0.1 inches: 30%
- 0.1-0.5 inches: 45% ← You bet here
- 0.5-1.0 inches: 20%
- 1.0+ inches: 5%
Capital Efficiency
Binary: Multiple Markets Needed
To express “BTC will be between 105K,” you need:Continuous: One Market
Price Discovery
Binary Markets: Threshold Games
In binary markets, traders fight over the threshold:Continuous Markets: Full Spectrum
When Binary Markets Work
Binary isn’t always wrong. They work well when:1. The Question is Naturally Binary
- “Will [candidate] win the election?” (1st or not 1st)
- “Will [company] go bankrupt?” (exists or doesn’t)
- “Will [law] pass?” (passes or doesn’t)
2. Threshold is Meaningful
- “Will inflation be above 3%?” (policy threshold)
- “Will [movie] make $100M opening?” (industry benchmark)
3. Extremes Don’t Matter
- “Will [team] make playoffs?” (whether they dominate or barely qualify doesn’t change the outcome)
When Continuous Markets Excel
1. Magnitude Matters
- Price predictions (How high? How low?)
- Measurements (How much? How many?)
- Timing (When exactly?)
2. Uncertainty is Important
- Is the market confident or uncertain?
- What are the tail risks?
- What’s the range of likely outcomes?
3. Nuance Adds Value
- Weather (temperatures, rainfall amounts)
- Economic indicators (inflation rate, unemployment)
- Performance metrics (revenue, users, etc.)
The Hybrid Future
At Skepsis, we believe continuous markets can handle most prediction needs. But we’re also exploring:Derived Binary Markets
From a continuous market, you can derive any binary question:Summary
| Aspect | Binary | Continuous |
|---|---|---|
| Information | Single probability | Full distribution |
| Expressiveness | Threshold only | Any range |
| Edge cases | Punishes “almost right” | Rewards accuracy |
| Capital efficiency | Multiple markets | One market |
| Price discovery | Limited | Rich |
| Nuance | None | Preserved |
| Best for | Naturally binary events | Numerical outcomes |
Try the Difference
Experience continuous markets yourself:Make a continuous prediction: Launch Skepsis →
Next Steps
| Economics | How the money flows in continuous markets | Economics |
| vs Polymarket | Direct comparison with the leading binary platform | vs Polymarket |