Resolution Clarity
The single most important attribute of a prediction market question is clear, unambiguous resolution criteria. "Will the economy improve?" is a terrible question because "improve" is subjective. "Will US real GDP growth exceed 2.5% annualized in Q3 2026 as reported by the BEA advance estimate?" is a good question because every term is defined, measurable, and attributable to a specific data source.
Ambiguous resolution criteria create basis risk for traders and reduce the informational value of the market. If participants are unsure exactly what they are betting on, the price reflects a mixture of different interpretations rather than a clean probability estimate for a single, well-defined event.
Time Horizon
Questions with very short time horizons (resolving in hours or days) can be useful for specific applications but tend to have prices that are already very close to 0 or 100 because the outcome is nearly determined. Questions with very long time horizons (resolving in years) have more uncertainty but also more time for the market to be influenced by information that does not yet exist.
The sweet spot for informational value is typically 1 week to 6 months: long enough that the outcome is genuinely uncertain, but short enough that relevant information exists and participants can form meaningful probability estimates.
Measurability
Good prediction market questions are about observable, measurable outcomes. "Will X be elected?" resolves to a clear yes or no based on official election results. "Will AI be smarter than humans by 2030?" is nearly impossible to resolve objectively because "smarter" is not well-defined.
Informational Value
The best prediction market questions are ones where the answer has real-world value for decision-makers. Markets on election outcomes inform political strategy. Markets on economic indicators inform business planning. Markets on technological milestones inform R&D investment decisions. The more the answer matters to real-world decisions, the more likely the market is to attract informed participants and produce accurate prices.
Questions that are purely trivia (which celebrity will attend a specific event) may attract volume for entertainment purposes but are less likely to produce the kind of serious analytical participation that makes prediction market prices genuinely informative.
Explore these tools on Blockcircle: Prediction Markets Mispricing Engine