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Conditional Tokens Framework

The Conditional Tokens Framework (CTF) is the underlying protocol used by Polymarket. Bayex builds upon this to enable liquid trading of these outcomes.

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Core Concepts

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Conditions

A “condition” is a question to be answered. It is defined by:
  • Oracle: The address authorized to report the outcome.
  • Question ID: An identifier for the specific question.
  • Outcome Slot Count: The number of possible outcomes (e.g., 2 for Binary).

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Position IDs

Each outcome has a unique collectionId derived from the condition. Bayex maps these ID’s to ERC20 tokens.

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Bayex Adaptation

Bayex simplifies the user experience by Abstracting the complexity of 1155s.
  1. Collateral: Users deposit collateral (e.g., USDC).
  2. Splitting via Wrapper: The wrapper calls splitPosition on the CTF.
  3. Tokenization: Instead of the user holding the 1155 tokens directly, the Wrapper holds them and mints 1:1 ERC20 representations.

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Why Wrap to ERC20?

  • Uniswap V4 Compatibility: AMMs primarily support ERC20 pairs.
  • Composability: Easier to use in other DeFi protocols.
  • Wallet Support: Better visibility in standard wallets completely.