AMM Market

Automated Market Makers (AMMs Market )

Our prediction markets support Automated Market Makers (AMMs) based on the Constant Product Model (x * y = k) to enable decentralized trading of binary outcomes (e.g., "Yes/No" or "For/Against"). Each market has two outcome Shares (e.g., YES and NO), and the AMM pool holds reserves of both. The product of the reserves (YES_reserves * NO_reserves = k) remains constant, ensuring liquidity.

1. Buying Outcome Shares

Step 1: Split collateral (e.g., USDC) into equal amount of both outcome Shares (1:1 ratio). Example: $10 USDC → 10 YES + 10 NO. Step 2: Swap the unwanted outcome Shares (e.g., NO) for the desired Shares (YES) via the AMM pool. Final Amount: The sum of the desired tokens splitted + tokens bought from the swap = total YES tokens purchased.

2. Selling Outcome Shares

Step 1: Swap a portion of the held Shares (e.g., YES) for the complementary outcome (NO) in the AMM pool. Step 2: Merge the remaining held Shares (YES) and the newly acquired NO Shares back into USDC (1:1).

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Tips | Important Notice :

Why AMM does not support limit orders

AMMs like the Constant Product Market Maker (CPMM) used on our platform fundamentally differ from order book-based systems, which is why they do not natively support limit orders. They replace order books with algorithmic liquidity pools.

1. The price in an AMM changes with every trade. A "limit order" would require a static price point, which contradicts how AMMs work.

2. There is no pending orders mechanism for AMMs. AMMs only execute trades immediately at the current pool-determined price. however, in an order book, a limit order sits idle until the market hits its price.