> For the complete documentation index, see [llms.txt](https://funarchy.gitbook.io/funarchy/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://funarchy.gitbook.io/funarchy/prediction-market-security-guide.md).

# Prediction Market Security Guide

Welcome to the Prediction Market Security Guide, a comprehensive for developers building predictive markets.

This document is an essential security guideline researched and produced by the Funarchy team at Upside Academy. Our team's goal is to help you systematically identify vulnerabilities arising in prediction markets, understand the underlying threat models, and design systems that operate safely in real-world environments.

This guide focuses on security considerations across the entire lifecycle of prediction markets, from market creation and resolution to liquidity management, governance, and user experience. It highlights common vulnerability patterns specific to prediction markets, such as oracle flaws and market design flaws, and explains how these issues manifest in both smart contracts and off-chain processes.

This document presents practical mitigation strategies and design recommendations based on the following five key areas:

* **Configuraiton**
* **Trading Mechanism**
* **Oracle & Data**
* **Governance**
* **Operation**

Whether implementing a new prediction market protocol or integrating prediction markets into existing DeFi systems, Funarchy aims to provide clear guidance that helps you avoid known pitfalls and systematically respond to emerging threats.


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