Trading Mechanics
Trading Mechanics
Buying Outcome Tokens
The user deposits collateral (e.g., BNB).
The FPMM issues conditional tokens for all outcomes.
It delivers the selected outcome tokens to the trader and retains the rest, restoring the invariant.
Selling Outcome Tokens
The user sends outcome tokens to the pool.
The invariant is temporarily broken.
The AMM rebalances by redeeming collateral and sending it to the user.
Each transaction includes a small liquidity fee, automatically distributed to liquidity providers.
Price & Odds Formula
For each outcome:
oddsWeight(outcome) = Π (tokens of all other outcomes)
odds(outcome) = oddsWeight(outcome) / Σ(oddsWeights of all outcomes)Prices adjust dynamically with market activity. More demand for an outcome increases its price and reduces its implied odds for others, creating a real-time probability consensus driven entirely by user actions.
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