Strategy 07 · Event Contracts
What Is Traded
Outcomes with a verifiable answer.
An event contract pays a fixed amount if a defined outcome occurs and nothing if it does not. The universe of outcomes people will trade is vast; the universe Wesvel trades is narrow. A contract is eligible only if its outcome is objective, its resolution source is public and independent, and the fund has a reason to hold a view or a hedge on it.
Macro and policy
Scheduled economic releases (inflation prints, employment data, growth figures) and the decisions of central banks and finance ministries. These have fixed dates, official sources and unambiguous values. They are also the events most likely to move every other position in the book, which makes contracts on them useful as hedges as well as trades.
Digital-asset regulatory and legal
Determinations by regulators and courts that affect the market the fund operates in: approvals or denials of products, outcomes of enforcement actions, passage of legislation. These are the events Wesvel has the most domain knowledge about and the most exposure to, and where a contract can hedge risk that no price instrument can.
Protocol and network
Whether a network upgrade activates by a date, whether a governance vote passes, whether a protocol meets a published milestone. Resolution depends on facts recorded on-chain or on a protocol’s own published record. These contracts are often thin and are traded in small size, chiefly as hedges for positions in the DeFi and venture books.
What is excluded
Contracts whose resolution depends on a subjective judgment, a private source, or the discretion of the venue. Contracts on events the fund or its personnel could influence or have non-public information about. Contracts on outcomes with no connection to the fund’s mandate. Sports, entertainment and similar categories are outside the mandate regardless of liquidity.
Practice
How Wesvel approaches it
- 01Every contract is checked against a written eligibility test (objective outcome, public independent resolution source, connection to the mandate) before it can be traded.
- 02Contracts on events where the fund or its personnel could have non-public information are prohibited, and the prohibition is enforced by the systems that trade.
- 03The eligible list is maintained and reviewed; contracts are added by review, not by trader discretion.
More in Event Contracts
- Venues and RegulationRegulated designated contract markets versus on-chain prediction markets, and how an unsettled regulatory position shapes what the fund can do.
- Probability PricingHow a contract price implies a probability, how the mandate forms its own estimate, and why the gap has to be wide.
- AI and Mispriced ProbabilitiesHow machine learning and language models screen hundreds of event contracts for prices that disagree with a calibrated estimate, and how that gap becomes a position with positive expected value.
- Cross-Venue Relative ValueBuying an outcome where it is cheap and selling it where it is rich, and why contract definitions decide whether the trade is real.
- Portfolio Event HedgingUsing event contracts to offset exposure elsewhere in the book to outcomes that price instruments cannot hedge.
- Resolution Risk and Position LimitsHow contracts resolve, what goes wrong when they do, and the caps that keep the mandate small.