Today on Manifold, most "binary" markets actually have three possible outcomes - YES, NO, and N/A. When a market resolves N/A, all trades are rolled back - traders get back as much as they put in, and everybody's profit is M$0. This affects even traders with no position in the market! If I successfully arbitrage a market and make M$50 of profits, and then a year later the market resolves N/A, the M$50 is clawed back, and my balance could even go negative. This is confusing for traders ("why did my balance just go down by M$50 when I didn't have an active position in any markets?") and can result in negative balances.

In this post, I'll be outlining an alternative approach that avoids clawbacks and seems mathematically more elegant, without changing user-facing behavior on the core Manifold site. The basic idea is to promote N/A to a first-class outcome under the covers, rather than a special case - all markets would be explicitly trinary.

The primitive operations on a binary market on Manifold are:

Under my proposed alternatives, the primitives change as follows:

So every market is just a normal trinary market, and there's no special treatment for NA.

Now let's look at the things Manifold lets you do through the UI under the current system.

How could you reproduce these outcomes under my proposed alternative?

That's how to replicate the existing Manifold experience under a "first-class NA" model. Beyond being mathematically cleaner, it also means that power users could explicitly trade NA shares, perhaps in a separate "Manifold Pro" interface or only via the API.