System Architecture Overview

Belief State Index (BSI)

The Belief State Index is the core measurement construct of Preda. It represents a continuously updated aggregation of belief signals across defined domains. Construction of the BSI involves:

• Normalization across heterogeneous data sources

• Temporal smoothing and decay functions

• Noise reduction and anomaly filtering

• Domain-specific weighting and calibration

The BSI serves as the authoritative reference for determining whether belief conditions have been met.

Oracle Framework

Preda integrates a modular oracle system designed to ingest belief-related data rather than event confirmations.

Oracle categories include:

• Social sentiment oracles capturing polarity, intensity, and persistence

• News and narrative oracles tracking framing and topic dominance

• Forecast aggregation oracles compiling probabilistic expectations

• AI consensus oracles measuring agreement and convergence patterns

Oracle inputs are timestamped, weighted, and auditable to ensure transparent belief measurement.

Time-Based Market Engine

Markets are structured around time as the primary axis. Positions correspond to time intervals or continuous curves rather than outcome states. This design allows participants to express fine-grained expectations about belief timing and uncertainty.

Volatility-Aware Settlement

Resolution applies volatility-based payout functions that account for:

• Speed of belief transition

• Sharpness of inflection

• Pre-transition uncertainty

This avoids binary resolution artifacts and reflects the probabilistic nature of belief evolution.

Reflexivity Observation Layer

The system provides visualization and analytical tools to observe feedback loops between:

• Belief formation

• Market pricing

• Information dissemination

This layer is observational and does not influence market mechanics, preserving analytical neutrality.