> ## Documentation Index
> Fetch the complete documentation index at: https://docs.theory.fi/llms.txt
> Use this file to discover all available pages before exploring further.

# Theory Protocol

> Narrative Futures built on HIP-4: one main narrative market, milestone triggers, and fee-funded retroactive rewards.

## Introduction

Theory is the perpetual prediction engine for milestone-aware, timing-sensitive events. Built on Hyperliquid HIP-4 Event Futures, it keeps a single main market open for the narrative while milestone markets and a fee-funded reward pool retroactively pay early conviction.

<Columns cols={2}>
  <Card title="Narrative Futures" icon="sparkles">
    A main HIP-4 binary market that prices imminence—“Is this narrative nearing confirmation?”—with no arbitrary deadline.
  </Card>

  <Card title="Milestone markets" icon="flag">
    Independent HIP-4 markets for observable milestones (claims, benchmarks, replications, consensus) that trigger rewards.
  </Card>

  <Card title="Fee-funded rewards" icon="coins">
    Trading fees from the main and milestone markets stream into a HyperEVM pool that pays time-weighted bonuses to early longs.
  </Card>

  <Card title="AI oracle network" icon="wave-pulse">
    Distributed AI agents monitor news, vote on milestone completion, and initiate HIP-4 resolutions with a challenge window.
  </Card>
</Columns>

## Core Concepts

<Columns cols={2}>
  <Card title="Main narrative market" icon="clock" href="/overview/detailed-example">
    Trades between 0 and 1, stays open until conservative confirmation or disproof, and determines reward eligibility.
  </Card>

  <Card title="Milestone markets" icon="route" href="/overview/detailed-example">
    Separate HIP-4 binaries for each milestone; they provide price discovery and trigger reward distributions when they resolve.
  </Card>

  <Card title="Reward pool" icon="medal" href="/overview/detailed-example">
    HyperEVM contract accumulates routed fees and distributes time-weighted payouts to eligible main-market longs.
  </Card>

  <Card title="Imminence framing" icon="gavel" href="/overview/detailed-example">
    The question is “Is this happening soon?” rather than “Will it ever happen by a date?”—no deadline risk or roll friction.
  </Card>
</Columns>

## How Theory Works

<Steps>
  <Step title="Open the main market">
    Deploy a HIP-4 binary market for the narrative (e.g., “AGI confirmed?”) that trades purely on order-book consensus.
  </Step>

  <Step title="List milestone markets">
    Publish HIP-4 markets for milestones (claims, benchmarks, replication, consensus) to provide granular signals.
  </Step>

  <Step title="Route fees to rewards">
    Half of deployer/milestone fees accumulate in the reward pool; optional sponsors can top it up.
  </Step>

  <Step title="Resolve and distribute">
    AI oracles vote milestones, HIP-4 settles them, and the reward pool pays time-weighted bonuses to longs who held before each trigger.
  </Step>
</Steps>

## Why This Market Type?

<AccordionGroup>
  <Accordion title="Timing-sensitive events need open-ended markets">
    Fixed deadlines distort timing risk. The main HIP-4 market remains open until conservative confirmation or disproof.
  </Accordion>

  {" "}

  <Accordion title="Evidence must be priced as it lands">
    Separate milestone markets let prices react to real-world evidence instantly—no oracle crawl or composite lag.
  </Accordion>

  {" "}

  <Accordion title="Early conviction deserves outsized rewards">
    Fee-funded, time-weighted payouts compensate longs who were in before milestones and final confirmation.
  </Accordion>
</AccordionGroup>

## Quick Links

<CardGroup cols={3}>
  <Card title="System Design" icon="diagram-project" href="/overview/detailed-example">
    Deep dive on HIP-4 markets, reward pool mechanics, and oracle flows.
  </Card>

  <Card title="Lifecycle Walkthrough" icon="route" href="/overview/detailed-example">
    Step-by-step example of a market from launch to final confirmation.
  </Card>

  <Card title="Why Theory" icon="circle-question" href="/overview/why-theory">
    Learn why traditional markets miss timing-sensitive, multi-stage events.
  </Card>
</CardGroup>