Perpetual Series

Belief Index series are classified by Maturity Type: Fixed or Perpetual. The distinction determines whether the series has a defined endpoint or whether its composition evolves over time.

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Fixed vs. Perpetual at a Glance

Every existing Belief Index series is Fixed. Perpetual is a new classification introduced for thematic series whose underlying domain evolves over time – for example, indices tracking geopolitical conflict risk where new prediction markets emerge as new situations develop.

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The Analogy

A Perpetual series works like a reconstituting equity index. The S&P 500 does not hold the same 500 companies forever – its index committee periodically adds and removes constituents as the market evolves. An ETF tracking the S&P 500 rebalances its holdings to match the new composition. The index level remains continuous across those reconstitutions; the rebalancing trades are absorbed in the fund’s tracking difference. A Perpetual Belief Index series follows the same convention:

• New constituent markets are added through a formal, admin-initiated reconstitution event.
• The fund trades on the Polymarket CLOB to align its custody holdings with the new target composition.
• The reported index level is continuous across the event – no visible step in the chart.
• The cost of rebalancing is absorbed in NAV and borne by existing investors, consistent with standard index fund practice.

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Chain-Linking (Index Continuity)

When composition changes, the raw probability-weighted aggregate (raw_nav) changes mechanically – different markets, different weights, different numbers. A Perpetual series uses chain-linking to ensure the reported index level is continuous across the change. The arithmetic is a single Decimal expression evaluated to 8 decimal places. The chart is continuous; the composition change is reflected only in the underlying market breakdown.

Why `raw_nav` is not continuous but `index_level` is

raw_nav is a snapshot of the current composition’s probability-weighted aggregate. When the composition changes, raw_nav changes too – it has to, because the markets and weights are different. index_level is the time series an investor reads; chain-linking re-anchors inception_raw_nav at each reconstitution so that index_level stays continuous even as the underlying basket evolves. The chain-link formula and a worked example are in NAV Methodology §4.8.

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Reconstitution Drag

Rebalancing custody to match the new composition has a real cost – spreads, slippage, and any placement cost on the CLOB. That cost is the reconstitution drag: the gap between realized NAV performance and the theoretical chain-linked index level over a reconstitution event.

• Drag is absorbed in NAV, consistent with ETF convention. There is no separate reconstitution fee.
• Drag is borne by existing investors of the series that incurs it. It is not netted across series.
• Drag is disclosed as methodology, not hidden. The term “reconstitution drag” is the standard index-fund term for the same concept.

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The Reconstitution Gate

During a reconstitution, the series enters a gate – a planned, bounded pause on mint, redeem, and NAV computation. The gate lifts automatically on success – when rebalance trades complete, custody positions match the new target within tolerance, reconciliation passes, and the post-rebalance solvency check passes. No admin acknowledgment is required to resume normal operations. If rebalancing cannot complete within 48 hours – whether by admin decision or by hitting the hard upper bound – the reconstitution follows an abort path: the old composition is restored, the gate lifts, and any trades already executed remain in custody as tracking error against the restored composition. Aborted reconstitutions are visible in the reconstitution history for the series.

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What This Does Not Change

Everything else about how a Belief Index series works continues to hold for Perpetual series:

• Physical backing. Every share remains backed by actual Polymarket positions held in custody. No synthetic exposure.
• Mint and redeem at NAV windows. Outside of the gate, Perpetual series operate on the same NAV-window cadence as Fixed series.
• Rules-based methodology. Market selection for inclusion in a Perpetual series follows qualitative criteria (thematic relevance, liquidity depth, trading volume, spread quality, time horizon, resolution clarity) published in the Perpetual series methodology page.
• Full audit trail. Every reconstitution event produces a complete record – composition version from and to, chain-link anchor, trades executed, initiating admin, realized cost.

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Further Reading