This breakdown of prediction market compliance licenses is super detailed, worth studying. My basic understanding is that it can be divided into two categories: 1) Onshore prediction markets: These markets can be understood through the traditional system of "exchange—broker—clearinghouse." The exchange corresponds to the DCM futures license, the clearinghouse corresponds to the DCO license, and the broker corresponds to the FCM license. Additionally, DCM also requires a binary event contract license. 2) Offshore markets: Take Polymarket (Global) as an example. Currently, the DCM function is implemented via CLOB; the FCM broker function is achieved through self-custody of funds and full collateralization; and the DCO clearing function is realized through atomic swaps in on-chain contracts. However, it’s important to note that the settlement decision at expiration is not done by the clearinghouse but by third-party oracles like UMA / Chainlink.