When it comes to prediction markets, Polymarket is one of the most well-known platforms. Many people have heard of its core rule—YES + NO = 1, but few truly understand this formula. Today, let's thoroughly explain this mechanism.

Many friends might ask: Why must it be 1? If the YES price is 0.7 and the NO price is 0.6, totaling 1.3, can't we just set prices freely?

Wrong. Although it's a free market, the logic here is completely different. YES and NO are not like two stocks that can fluctuate independently; they are essentially the same value torn into two halves.

How to understand this? Imagine that what Polymarket sells is not lottery tickets or futures, but future redemption vouchers. Each voucher's value is always anchored at 1 USD. The market simply divides this 1 USD into two parts, one labeled YES and the other NO.

What happens at the settlement date? If the predicted event occurs, the YES voucher is worth 1 USD, and the NO voucher becomes 0. Conversely, if the event does not occur, the YES voucher becomes zero, and the NO voucher is worth 1 USD.

Therefore, the math at settlement always holds:
- Event occurs: 1 + 0 = 1
- Event does not occur: 0 + 1 = 1

This is the brilliance of the shared order book—under the same market and settlement conditions, the prices of complementary outcomes are always bound by this 1 USD constraint. No arbitrage space exists, and the logic is self-consistent.