When a user purchases shares in a market, the $IQ used to purchase the shares is stored in the market’s smart contract. Once the market’s event happens, the outcome is reported by an account specified by the market creator, and the $IQ stored in the smart contract is distributed to the winners. Users on the winning side can cash in their shares for a profit, paying a small fee that is distributed among the market creator, the market resolver, and the market’s referrers. Shares on the losing side of the market become worth zero, since they can’t be redeemed for anything.