If you are familiar with ETF creation/redemption or mutual fund subscription mechanics, the Belief Index flow will feel familiar. The key difference is that the underlying assets are prediction market outcome tokens rather than equities or bonds.
The Investor Lifecycle
Deposit USDC
Transfer USDC (a dollar-pegged stablecoin) to your designated Belief Systems deposit address on the Polygon network. This is analogous to wiring cash to a fund custodian or transferring money into a brokerage account.Once confirmed on-chain, the deposit is credited to your uninvested balance — a platform-level cash account that can be deployed into any series.
Place a Mint Order
Select a series (e.g., “U.S. Monetary Policy Easing Expectations 2026”) and specify how much USDC you want to invest. Your funds are locked while the order is pending, preventing double-spending.You can cancel an unprocessed order at any time before the next NAV window, and your funds will unlock immediately.
NAV Window Execution
At the next scheduled NAV window, the system computes the current Net Asset Value. Your order executes at that window’s NAV per share — this is forward pricing, the same mechanism used by mutual funds to prevent arbitrage against existing shareholders.All orders submitted before the window cutoff are processed together in a single batch.
Receive Shares
New shares are created and credited to your account at the computed NAV per share price. Each share represents a pro-rata claim on the series’ underlying assets — the prediction market positions, any uninvested cash, net of accrued fees.Minting new shares at NAV does not dilute existing holders. The incoming capital is proportional to the shares issued.
Hold and Monitor
While you hold shares, the NAV updates at each window as underlying prediction market prices move. You can track performance via the published index level, which starts at 100 at inception and moves proportionally with the underlying basket.As individual markets resolve (settle at $1 or $0), the series automatically incorporates the settlement prices into NAV.
Redeem Shares
When you want to exit, place a redemption order specifying how many shares (or how much USDC value) you wish to redeem. At the next NAV window, your shares are burned and USDC proceeds are credited to your uninvested balance.The system liquidates a proportional slice of each underlying position to generate proceeds — preserving the basket’s composition for remaining holders.
NAV Windows: The Heartbeat of the System
NAV windows are the periodic checkpoints at which all orders are processed and valuations are computed. Think of them as the fund’s “daily cut-off” — but occurring more frequently.| Property | Detail |
|---|---|
| Frequency | Currently every 30 minutes (subject to change) |
| Pricing model | Forward pricing — orders execute at the next window’s NAV, not the current one |
| Batch processing | All pending orders in a window are processed simultaneously |
| Fairness | If capacity is constrained, all orders are scaled by the same pro-rata factor — no queue advantage |
| Independence | Minting and redemption are gated independently per series — one may be open while the other is paused |
Why forward pricing?
Why forward pricing?
Forward pricing means your order executes at the NAV computed after you submit, not at the NAV you see when placing the order. This prevents a well-known exploit in fund management: if investors could buy at a known price, they could use information about price movements between the current and next window to trade against existing holders.This is standard practice across the mutual fund industry and is required by regulation in most jurisdictions. It ensures fair treatment of all investors — both new subscribers and existing holders.
What Happens Inside the Basket
When you mint shares, the system acquires a weighted basket of prediction market outcome tokens on your behalf. These tokens are held in managed custody and valued at each NAV window using the published methodology.- Simplified Flow
- Traditional Finance Analogy
What Moves the Share Price
NAV per share changes based on three factors:1. Market movements
1. Market movements
The underlying prediction markets move as new information arrives — polling data, economic releases, policy announcements, and other catalysts shift the implied probabilities of event outcomes. Each NAV window reprices all positions using the latest order book data from Polymarket.For example, if a strong jobs report is released and the market suddenly prices a lower probability of rate cuts, all rate-related markets in a rates series would adjust — and the NAV would reflect those movements at the next window.
2. Market resolutions
2. Market resolutions
When an event resolves, the outcome token settles to $1 (if the tracked outcome occurred) or $0 (if it did not). This is immediately reflected in NAV.Resolution events are the defining feature of prediction market investing: they create discrete, binary value changes. A diversified basket absorbs these events across multiple positions, smoothing the impact of any single resolution.
3. Fees (when applicable)
3. Fees (when applicable)
If management fees are enabled, they accrue at each NAV window as a small reduction in NAV per share. This is identical to how expense ratios work in traditional funds — the fee is embedded in the NAV, not charged separately.Fee rates are configured per series and subject to change. See Fees for details.
Partial Fills and Capacity Limits
In certain conditions — high demand, limited underlying market liquidity, or risk limits — a NAV window may not have enough capacity to fill all orders at full size. When this occurs:- All orders in the window are scaled by the same pro-rata factor (e.g., 80%)
- The filled portion executes at NAV and shares are issued normally
- The unfilled portion is returned to your available balance
- No investor receives preferential treatment — first-come-first-served does not apply
Worked example: partial fill
Worked example: partial fill
- Total mint requests in a window: $1,000,000
- Available capacity: $800,000
- Pro-rata factor: 80%
- Filled: $40,000 (80%) at NAV per share
- Unfilled: $10,000 returned to your uninvested balance
Safety and Risk Controls
The system incorporates multiple layers of risk controls, all designed to preserve solvency and fairness:| Control | Purpose |
|---|---|
| NAV validity checks | Orders are only processed when a valid, non-stale NAV can be computed |
| Liquidity-based caps | Execution is bounded by available market depth in underlying positions |
| Market impact limits | Maximum participation rates prevent the system from moving underlying prices |
| Independent gating | Minting and redemption can be paused independently per series |
| Integrity halts | Automated halts if ledger reconciliation detects any discrepancy |