Trade the Signal,
Not the Noise.

Abstract

Prediction markets are among the most accurate forecasting mechanisms ever created, consistently outperforming polls, pundits, and expert panels. Yet most traders operate without systematic tools to identify mispricings, relying instead on gut instinct and manual research.

Precedence is an AI-powered prediction market terminal that estimates true probabilities for every market outcome, compares them to current prices, and shows traders exactly where the edge is. By combining GPT-4o analysis with Polymarket's Central Limit Order Book and gasless trading infrastructure, Precedence transforms prediction market trading from intuition-driven to intelligence-driven.

The Problem

Prediction markets on platforms like Polymarket process hundreds of millions of dollars in volume across thousands of simultaneous markets. However, individual traders face several challenges:

Information Overload

With thousands of active markets across politics, legal, crypto, economics, and culture, no human can systematically evaluate every market for mispricing. High-value edge opportunities are buried beneath the noise of high-profile, efficiently priced markets.

No Systematic Edge Detection

Traditional trading terminals show prices and order books but offer no opinion on whether those prices are correct. Traders must form their own probability estimates through manual research — a time-intensive process that doesn't scale across thousands of markets.

Legal Markets Are Underserved

Court cases, SCOTUS rulings, regulatory battles, and criminal trials represent some of the most intellectually rigorous prediction challenges. Yet legal markets receive far less attention than political or crypto markets, creating persistent mispricings for those with domain expertise.

Friction in Execution

Most prediction market platforms require gas fees, complex wallet management, and multiple transaction signatures. This friction discourages participation, particularly from users new to blockchain-based trading.

The Precedence Solution

Precedence addresses each of these challenges through four integrated capabilities:

AI Edge Detection Engine

The core innovation of Precedence is the AI Edge Detection Engine — a system that transforms raw market data into actionable trading intelligence.

How It Works

For each market, the engine performs a multi-step analysis:

1. Independent Probability Estimation — GPT-4o forms its own probability estimate for each outcome, independent of the current market price. This estimate is grounded in the model's knowledge of politics, law, economics, technology, and historical patterns.
2. Market Price Comparison — The AI compares its estimate to the live market price from Polymarket's CLOB. The difference is the edge — a quantified measure of potential mispricing.
3. Edge Direction Analysis — If the AI probability exceeds the market price, the outcome is flagged as "undervalued." If it's lower, the outcome is "overvalued." Edges below 3% are classified as "fairly priced."
4. Confidence Scoring — Each analysis includes a confidence score (0–100%) reflecting how certain the AI is in its estimate. Low-information markets receive lower confidence.
5. Risk Assessment — Markets are classified as low, medium, or high risk based on volatility potential, time to resolution, and information asymmetry.

Binary Markets

For YES/NO markets, the engine returns a single probability estimate with edge calculation, bull and bear cases, and key factors analysis.

Multi-Outcome Markets

For markets with multiple outcomes (e.g., "Who will win the 2028 Presidential Election?" with 30+ candidates), the engine:

• Estimates probabilities for all top outcomes
• Compares each to its market price
• Identifies the "best value" outcome with the largest positive edge
• Provides time sensitivity analysis for how probabilities may shift

Legal Case Analysis

For court cases searched via CourtListener, a specialized legal analysis pipeline activates:

• Fetches full case details: opinions, procedural history, disposition, parties
• Analyzes judge ideology and historical ruling patterns
• Estimates plaintiff win, defendant win, and settlement probabilities
• Identifies key legal factors driving the prediction

Platform Architecture

Precedence is built as a multi-service architecture deployed across Vercel (frontend) and Railway (backend + database).

PRECEDENCE PLATFORM ARCHITECTURE

Frontend (Next.js 16)                    Vercel
  - Dashboard + trending markets         www.precedence.fun/app
  - Markets (5 category filters)
  - AI Market Analysis
  - Case search + LLM analysis
  - Portfolio + positions
  - Profile + wallet management

Backend (FastAPI)                        Railway
  - /api/markets/* endpoints             PostgreSQL database
  - /api/predictions/* (GPT-4o)
  - /api/cases/* (CourtListener)
  - /api/users/* (profiles)

Trading (Frontend-side)                  Polymarket Builder
  - Safe wallet deployment               Gasless via Relayer
  - Credential derivation                HMAC-signed orders
  - CLOB order placement                 Session caching

External APIs
  - Polymarket Gamma API (market data)
  - Polymarket CLOB API (trading + order books)
  - Polymarket Relayer (gasless transactions)
  - CourtListener API (legal case data)
  - OpenAI GPT-4o (AI market + case analysis)
  - Privy (wallet authentication)

Technology Stack

Gasless Trading Infrastructure

Precedence leverages Polymarket's Builder Program to deliver a zero-gas-fee trading experience. Users never need ETH or MATIC to trade.

Two-Wallet Architecture

The system uses two wallets per user, each with a distinct role:

This separation enables gasless trading: the user signs with their EOA, and Polymarket's Relayer executes the transaction from the Safe wallet, paying gas on the user's behalf.

Trading Flow

1. Connect — User authenticates via Privy (email, Google, or wallet). A Gnosis Safe is deployed gaslessly.
2. Fund — User sends USDC to their Safe address. Both native USDC and USDC.e are detected.
3. Analyze — AI analyzes the market and shows probability estimate, edge, and risk.
4. Trade — User clicks Buy/Sell. A Fill-or-Kill market order is placed on Polymarket's CLOB. One signature required.
5. Settle — When the market resolves, UMA Oracle verifies the outcome. USDC is distributed to winning positions automatically.

Legal Market Intelligence

Precedence was founded with a legal-first thesis: court cases, regulatory battles, and criminal trials are among the most underserved and inefficiently priced markets in the prediction market ecosystem.

CourtListener Integration

Through the CourtListener API, Precedence provides access to millions of federal court cases across all circuits:

• Supreme Court (SCOTUS)
• All 13 Circuit Courts of Appeals
• Federal Circuit and DC Circuit
• Full case details: opinions, procedural history, parties, timeline

AI Case Analysis

When a user triggers AI Analysis on a case, the system:

1. Fetches complete case data from CourtListener (opinions up to 8,000 characters, procedural history, disposition)
2. Constructs a comprehensive prompt with all case facts
3. GPT-4o analyzes the case and returns structured predictions

The output includes plaintiff win probability, defendant win probability, settlement probability, judge ideology assessment, key legal factors, and a confidence score.

Legal Markets on Polymarket

Precedence surfaces legal prediction markets that are typically buried beneath high-volume political markets. Active legal markets include:

• SCOTUS rulings (tariff cases, sports contracts)
• Criminal trials (Weinstein, Epstein disclosures, Mangione)
• Regulatory actions (Jerome Powell, BitBoy)
• Civil litigation (Musk vs. Altman)

A dedicated Legal filter tab on the Markets page ensures these markets are always accessible, regardless of their trading volume relative to political markets.

Market Categories

Precedence organizes markets into five filterable categories, each with keyword-based classification:

The dashboard Trending Markets section uses a diversification algorithm to ensure representation across categories, rather than displaying only the highest-volume markets (which skew heavily toward politics).

Business Model

Precedence generates revenue through two mechanisms:

Platform Fee

A 1% fee is applied to all SELL orders, collected in USDC and transferred to the Precedence treasury via gasless relay. This fee is transparent and displayed in the trading interface.

Builder Revenue Sharing

As a Polymarket Builder, all trading volume attributed to Precedence is tracked via HMAC-signed order headers. Polymarket's Builder program shares a percentage of protocol revenue with builders based on their attributed volume.

Roadmap

Completed

In Progress

Planned

Team