This means you are not guarranteed betting X pays out Y. And this does change as bets are made on either side. And so one may think, why not just bet the last minute? House fees are initially 0% at 6 AM (PDT) but roll up linearly to 20% by 6 PM (PDT). This is to encourage betting early and discourage bet sniping at the last minute. [2]
Having said that, we do plan to move towards a floating model, more similar to the futures market as we gain transaction volume.
Current prediction targets are set by us. And bettor bet on either sides. As we gain liquidity and transaction volumes are increased, we plan to then turn this into a real time exchange so that the transactions are settled real time and we essentially have a moving prediction target.
In fact, this how we got our name at future representing futures market and block representing bit coin. :p
[1]: http://en.wikipedia.org/wiki/Parimutuel_betting [2]: http://www.futureblock.com/how-it-works [3]: http://en.wikipedia.org/wiki/Futures_exchange