# 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. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.variancemarkets.com/overview.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.