Overview

The Fixed Product Market Maker is the heart of Predify’s trading logic. Each market has its own autonomous liquidity pool governed by a constant product invariant, ensuring transparent and permissionless price formation.

Every market deploys its unique FPMM contract using a factory system. These deployments are indexed via The Graph and accessible through the Predify API for data integrations.

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Core Principle

The FPMM ensures that for all outcome tokens in a market, the product of their balances remains constant:

Invariant = Π (numOutcomeTokensInPool)

This invariant acts as the backbone of pricing. When traders buy or sell tokens, the AMM adjusts inventory to restore equilibrium, setting the implied odds dynamically.