> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theory.fi/llms.txt
> Use this file to discover all available pages before exploring further.

# Why Theory?

> Narrative Futures for timing-sensitive, milestone-driven events built on HIP-4 Event Futures.

## The Problem: Timing-Sensitive, Multi-Stage Events

Breakthroughs like AGI, cures for major diseases, or foundational physics updates move through claims, benchmarks, replications, and consensus. Current market structures fail in three ways:

* **Prediction markets need deadlines.** Arbitrary expiry dates force traders to mix probability with timing; late entrants get the same payout as early conviction.
* **Perpetual futures track prices, not events.** They cannot settle on scientific confirmations and offer no reward for milestone progress.
* **No reward for being right early.** There is no mechanism to compensate people who were long the narrative before evidence stacked up.

## The Theory Approach

Theory introduces Narrative Futures: a main HIP-4 binary market paired with milestone HIP-4 markets and a fee-funded reward pool.

1. **Main narrative market** — Trades between 0 and 1 with no oracle during trading and no preset expiry; settles on conservative confirmation or disproof.
2. **Milestone markets** — Independent HIP-4 binaries for observable milestones (major claim, benchmarks, replication, consensus) that trigger rewards when they resolve.
3. **Fee-funded reward pool** — HyperEVM contract that routes a share of main and milestone trading fees (plus optional sponsors) to time-weighted payouts for main-market longs who held before each milestone.
4. **AI oracle network** — Distributed agents monitor news, vote milestones via majority, and post resolutions with a challenge window.

## Why It Works Better

<CardGroup cols={2}>
  <Card title="Prices imminence" icon="chart-line">
    Markets ask “Is this happening soon?” rather than “By this date?”—no deadline drag, pure belief on proximity.
  </Card>

  {" "}

  <Card title="Rewards early conviction" icon="medal">
    Time-weighted distributions pay more to holders who were long before milestones; late entrants get less.
  </Card>

  {" "}

  <Card title="Sustainable funding" icon="coins">
    Rewards come from trading fees and sponsors—not protocol shorts—so payouts are capped by the pool balance.
  </Card>

  {" "}

  <Card title="Instant price discovery" icon="bolt">
    HIP-4 markets have no oracle during trading; prices move as soon as traders update views on new evidence.
  </Card>
</CardGroup>

## Who Is This For?

* **Forecasters** who want to express belief in imminence without arbitrary clocks.
* **Researchers and operators** who need a live signal for how close a field is to a pivotal milestone.
* **Traders** who want binary exposure with upside from reward pool distributions as evidence accumulates.

## Bottom Line

Theory keeps markets open until conservative confirmation, separates milestones into their own HIP-4 markets, and routes fees into a reward pool that pays people who were right early. It aligns financial incentives with the gradual accumulation of evidence.