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Axient: Debt-Free Finality for Leveraged Binary Event Markets

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  • Maksym Nechepurenko

Abstract

Leveraged event positions combine a repayable loan with an outcome claim that may become non-tradable before oracle payout is final. This paper specifies Axient, a physically backed margin layer for binary event markets that separates leverage maturity from claim maturity and makes the hard-flat decision under explicit execution uncertainty. The model distinguishes quoted book proceeds, matched proceeds, settled proceeds, and redemption. At decision time, the protocol selects the smallest sale whose lower settled-proceeds envelope covers an upper bound on debt at the settlement horizon plus a buffer. We prove robust ex-ante debt clearing, pathwise debt-extinguishment and debt-free-finality invariants, maximal residual spot exposure, payout-vector and dispute-duration invariance of lender principal after debt extinction, and an impossibility boundary when execution, signer control, settlement, or market closure leave the registered operating set. We also derive a book-dependent leverage envelope, aggregate hard-flat capacity without double-counting shared liquidity, and scenario-conditional reserve bounds. A deterministic verifier covers step books, partial fills, settlement delay, adversarial book transformations, shared-book liquidation, reserve allocation, zero liquidity, and multiple payout vectors. The operating and stress sets are author-specified; empirical calibration is separate. The contribution is a conditional mechanism-design result and reference-implementation boundary, not a production-safety claim.

Suggested Citation

  • Maksym Nechepurenko, 2026. "Axient: Debt-Free Finality for Leveraged Binary Event Markets," Papers 2608.00631, arXiv.org.
    • Handle: RePEc:arx:papers:2608.00631
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    References listed on IDEAS

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    4. Manski, Charles F., 2006. "Interpreting the predictions of prediction markets," Economics Letters, Elsevier, vol. 91(3), pages 425-429, June.
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