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Key terms used throughout the Belief Index documentation, explained for a finance-literate audience. Terms are grouped by category for easy reference.

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Index & NAV Terms

A structured investment product that bundles prediction market outcome tokens into a single, diversified basket. Each Belief Index is organized as a “series” tracking a specific theme — analogous to how an ETF tracks a specific index or sector. The product is managed by Belief Systems and operates on a mutual fund model with periodic NAV windows.
A named, themed basket of prediction markets with assigned weights — the fundamental unit of a Belief Index product. Each series tracks a specific theme such as monetary policy expectations, election outcomes, or economic indicators. Examples: “Belief U.S. Monetary Policy Easing Expectations 2026 Index,” “Belief U.S. Presidential Election Republican Expectations 2028 Index.” Analogous to a specific ETF or mutual fund tracking a defined strategy.
The specific set of prediction markets, tracked outcomes, and weights that define a series. The composition specifies exactly which markets are included, which side (YES or NO) is tracked, and how much weight each market carries. Compositions are versioned — each change creates a new version for auditability.
The total value of a series’ underlying assets, net of liabilities and fees. In traditional finance, NAV is the standard measure of a fund’s per-share value. Belief Index computes NAV from the current prices of underlying prediction markets combined with custody cash holdings and accrued fee obligations.
The probability-weighted aggregate of all market prices in a series, bounded between 0 and 1. Computed as the weighted average of each market’s midprice (or settlement price, if resolved). A Raw NAV of 0.65 means the weighted-average implied probability across all markets in the basket is 65%. See NAV Methodology.
A rebased representation of Raw NAV, starting at 100 at inception. Computed as: 100 x (raw_nav / inception_raw_nav). Makes it easy to track percentage performance over time — an Index Level of 95 means a 5% decline from inception; 110 means a 10% gain. Analogous to the level of a price index like the S&P 500 or FTSE 100.
The first successful NAV computation for a series. The Raw NAV at inception becomes the denominator for the Index Level calculation, setting the base at 100. All subsequent performance is measured relative to inception.
A NAV computation that relies on outdated price data because one or more underlying market price fetches failed. When a fetch fails, the system uses the last known good price as a fallback and flags the computation as stale. Stale computations are always transparently marked so investors know the data quality.
The final, definitive NAV of a series after all underlying markets have resolved. Terminal NAV is not subject to further change and is never marked as stale, since all component prices are settlement prices ($1 or $0). No further computations occur after a series reaches terminal NAV.

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Market Terms

A market where participants trade contracts that pay $1 if a specified event occurs and $0 otherwise. The trading price reflects the crowd’s implied probability of the event. For example, a contract trading at $0.70 implies the market believes there is a 70% chance the event will occur. Polymarket is the primary prediction market platform used by Belief Index.
A digital token representing one side of a binary prediction market. A YES token pays $1 if the event occurs; a NO token pays $1 if it does not. These are ERC-1155 tokens on the Polygon blockchain. Outcome tokens are the underlying assets that Belief Index holds in custody to back investor shares.
The specific side (YES or NO) of a prediction market that a series composition follows. For example, a series might track the YES outcome for “Will the Fed cut rates?” — meaning the series holds YES tokens for that market. The tracked outcome determines which order book is used for pricing.
The arithmetic mean of the best bid and best ask prices: (best_bid + best_ask) / 2. Used as the fair value estimate for each market in the NAV computation. The midprice is a theoretical value — it represents what a trade might execute at, but does not guarantee execution at that price. See NAV Methodology.
A Central Limit Order Book — a list of buy orders (bids) and sell orders (asks) for a given market, sorted by price. The best bid is the highest price a buyer will pay; the best ask is the lowest price a seller will accept. Belief Index reads the top of book (best bid and best ask) from Polymarket’s CLOB to compute midprices.
The settlement of a prediction market when its underlying event occurs (or definitively does not occur). At resolution, the winning outcome token pays $1 and the losing token pays $0. Resolution is final and binary — there are no partial outcomes.
The final price of an outcome token after market resolution: $1.00 for the winning outcome, $0.00 for the losing outcome. Settlement prices replace midprices in the NAV computation once a market resolves.
The difference between the best ask and the best bid in an order book. A narrow spread (e.g., $0.01) indicates a liquid market with strong price discovery. A wide spread (e.g., $0.05) indicates a less liquid market where the midprice is a less reliable estimate of fair value.
The difference between the expected execution price and the actual execution price when trading. Slippage increases with order size relative to market depth. In thin markets, even moderate orders can experience significant slippage.

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Investment Terms

The process of investing in a Belief Index series by creating new shares. Analogous to subscribing to a mutual fund or creating ETF shares through an authorized participant. The investor deposits USDC, and new shares are issued at the NAV per Share computed at the next NAV window. Minting increases total shares outstanding. See Minting Shares.
The process of exiting a Belief Index position by surrendering shares for USDC proceeds. Analogous to redeeming mutual fund shares. Shares are burned at the NAV per Share at the next NAV window, and the corresponding value (minus any redemption fee) is credited to the investor’s uninvested balance. Redemption decreases total shares outstanding. See Redeeming Shares.
The practice of executing orders at the next NAV window’s price rather than the current price. When you submit a mint or redemption order, you do not know the exact price at which it will execute — it will be the NAV per Share computed at the next window. This prevents arbitrage against existing shareholders and is standard practice in mutual funds.
The total number of shares currently issued for a series. Increases when new shares are minted, decreases when shares are redeemed. Share supply is elastic, not fixed — there is no cap on the number of shares that can exist. The sum of all investor balances always equals total shares outstanding.
When total order volume exceeds the available capacity in a NAV window, all orders are scaled down by the same percentage. No investor receives priority — everyone gets the same proportional fill. Unfilled portions are returned. Similar to how over-subscribed IPO allocations are handled.
When an order is only partially executed due to capacity constraints. For example, if pro-rata scaling reduces all orders to 80%, a $10,000 mint order would be filled for $8,000 and the remaining $2,000 would be returned to the investor’s uninvested balance.
USDC held in your Belief Systems account that is not currently allocated to any series. Think of it as the cash balance in a brokerage account. Deposits land here, and uninvested balances can be used to mint shares in any series or withdrawn. See Deposits & Withdrawals.

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Custody & Blockchain Terms

USD Coin — a dollar-pegged stablecoin issued by Circle. Each USDC is designed to be redeemable for $1.00 and is backed by reserves of cash and short-duration U.S. Treasury bonds. Belief Index uses USDC on the Polygon network as its base currency for deposits, investments, and redemption proceeds.
A public blockchain network where Belief Index custody assets are held. Polygon is an Ethereum-compatible network that offers low transaction costs (typically less than $0.01 per transaction) and fast confirmation times. All USDC transfers and outcome token holdings occur on Polygon.
A token standard on Ethereum-compatible blockchains that supports multiple token types within a single smart contract. Polymarket uses the ERC-1155 standard for its outcome tokens, allowing both YES and NO tokens for a given market to exist within one contract.
A token standard on Ethereum-compatible blockchains for fungible tokens. USDC is an ERC-20 token — each USDC unit is identical and interchangeable, similar to how each dollar bill is identical.
A dedicated wallet on the Polygon blockchain that holds investor assets (USDC and outcome tokens). All custody wallet holdings are publicly verifiable on-chain. Withdrawals from the custody wallet require human approval, a mandatory cooldown period, and automated solvency verification before execution.
Recorded on a public blockchain. On-chain data is transparent (anyone can read it), immutable (cannot be altered after recording), and independently verifiable. When we say positions are held “on-chain,” it means their existence can be confirmed by querying the Polygon blockchain directly.
A program that runs on a blockchain and executes automatically when predefined conditions are met. Multi-signature wallets, outcome tokens, and USDC are all implemented as smart contracts. Smart contracts are transparent (their code is publicly readable) but may contain undiscovered bugs.

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Fee Terms

An annual percentage fee charged against a series’ assets under management, accrued continuously at each NAV window. Reduces NAV per Share gradually over time. Analogous to an ETF’s expense ratio or a mutual fund’s management fee. Rates are configured per series and subject to change. See Fees.
A one-time percentage fee charged on new investments at the time of minting. Deducted from the investment amount before shares are issued — the investor receives fewer shares per dollar invested. Analogous to a mutual fund front-end load. Rates are configured per series and subject to change.
A one-time percentage fee charged on redemption proceeds. Deducted from gross proceeds before cash is credited to the investor — the investor receives less cash per share redeemed. Analogous to a mutual fund back-end load or contingent deferred sales charge. Rates are configured per series and subject to change.
Management fees that have accumulated since the last fee collection. Accrued fees are subtracted in the NAV per Share calculation, reducing the per-share value. Fees accrue at each NAV window (a small fraction of the annual rate per window).
A unit of measurement equal to 1/100th of a percentage point. 100 basis points = 1%. Used in finance to express fee rates and small percentage changes with precision. For example, a management fee of 150 bps equals 1.50% annually.

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Accounting Terms

An accounting system where every transaction is recorded as a balanced pair of debit and credit entries. No value is created or destroyed — every debit has a corresponding credit. This is the same system used by every professional fund administrator and is the global standard for financial record-keeping. The Belief Index ledger uses double-entry accounting for all transactions.
The authoritative record of all financial transactions in the system. Every mint, redemption, fee accrual, deposit, and withdrawal is recorded as a balanced double-entry in the ledger. Finalized ledger entries are immutable — they cannot be edited or deleted. Corrections are made by adding new compensating entries.
The process of comparing the internal ledger state (what the system believes it holds) with the on-chain state (what the custody wallet actually holds on the blockchain). If the two agree, the accounting is verified. If they disagree, there is a discrepancy that triggers investigation. See On-Chain Verification.
Recording transactions on the date they occur, not the date they settle. All economic truth in Belief Index is recorded at NAV window finalization, when orders are filled and shares are created or destroyed.