Wildfire is the secondary market place that builds on top of Earthquakes tokenized vaults. Since collateral is locked up for the duration of the vault cycle, this secondary market allows users to enter and exit positions in real time via its order book. Trades are made using signed transactions from the taker, and pushed on-chain when finalized by the taker via 0x Protocols contracts. These are battle-tested contracts that Y2K will leverage to give users the best trading experience.
Alice deposits 1 ETH (lets say ETH is $1500) in an Earthquake vault and gets back 1 Vault Token (ERC-1155 token). Alice's wants to take profits at $1700, hence through earthquake approves and signs a message on the order-book to list a maker limit order of 1 Vault Token at a price of $1700. Bob wants to enter the market and believes that the vault token is worth $1800, and can either make a market orders to enter a position at the current market price or set a limit order at his desired entry. The taker (Bob) is liable for the gas to execute the trade.
At the end of the epoch, Bob then can redeem his Vault tokens for the underlying plus yield/coverage (premiums or payout), burning the vault token.