Overview

Variance Markets is a protocol built on top of Polymarket. Polymarket remains the market layer, while Variance Markets operates strictly as a meta-layer. It reads Polymarket markets as data sources and transforms their pre-resolution dynamics into structured, exploitable signals. There is no interference between layers: Polymarket runs the markets, Variance Markets observes and derives signals.

Polymarket handles:

• Event and outcome creation

• Liquidity and order flow

• Price discovery (market probability)

• Final outcome resolution and settlement

Variance Markets handles:

• Extraction of belief-divergence signals before resolution

• Aggregation and normalization of those signals across time and regimes

• Distribution of variance signals to protocol features and products

Variance signals are not alternative prices and not competing predictions. They are derived measurements of how the market behaves internally while the outcome is still unknown: disagreement, persistence of beliefs, asymmetries in updates, and regime shifts. These signals are produced by an AI layer that analyzes market time series and structural patterns (price evolution, volume, liquidity distribution, reaction to events) to detect and classify belief regimes, then publish actionable variance signals without ever modifying Polymarket markets or interfering with their operation.