> For the complete documentation index, see [llms.txt](https://providence-labs.gitbook.io/providence-labs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://providence-labs.gitbook.io/providence-labs/how-providence-works/system-description.md).

# System Description

The Market Factory II Opening New Markets.

At the core of Providence is the Market Factory. This is the contract which creates new [Markets](/providence-labs/how-providence-works/markets.md) from according to specifications. Upon the launch of Providence V1.0, our initial ten markets will be implemeneted with additional markets added via Providence governance functionality. 

Markets are contracts able to evaluate metrics and operators to define an outcome after market expiry. Markets are also ERC-1155 tokens which use a set of fungible tokens to represent possible event outcomes. Participants can burn tokens of one outcome to mint tokens of another, with the rate determined by a combination of relative supplies of outcome tokens, and a adjustment factor described in the [exchange rate adjustment section](/providence-labs/how-providence-works/markets/exchange-rate-adjustment.md).