How it works
A plain-language guide to prediction markets on the pm-AMM — what they are, the three ways to take part, and why the design is different.
What is a prediction market?
A market on a yes/no question (“Will BTC top $200k in 2026?”). You buy YES or NO tokens with USDC. When the event resolves, the winning side redeems for 1 USDC each and the losing side for 0. The price of YES (between 0 and 1) is simply the market’s estimate of the probability— YES at 0.62 means “~62% likely”.
Three ways to take part
Swap USDC for YES or NO. If you’re right, every token pays 1 USDC at resolution. You can also sell back any time before resolution at the live price.
Deposit USDC so others can trade. You earn a continuous yield as the pool releases tokens to you over time (the dC_t mechanism), and you take the other side of bettors’ trades — your cost is “LVR” (the AMM’s loss to arbitrage), which this design keeps steady and predictable instead of lumpy.
Open a market yourself, or open a commitment vaultso a crowd funds the starting liquidity. The crowd’s commits set the opening price; once it launches, the committers become the market’s LPs. You earn 50% of the 2% swap fee on every trade in your market.
Why pm-AMM is different
- Liquidity decays as √(time left).The LP’s risk is spread evenly across the whole life of the market — no nasty surprise right before expiry.
- Prices stay honest. They track the true probability of the event, not just inventory imbalance.
- Always fully collateralized. The vault holds enough USDC to pay every winning token — a winner can never be locked out of their payout.
What does it cost?
A swap pays a 2% protocol fee on the USDC leg, split 50% to the protocol DAO and 50% to the market creator. Trading YES↔NO directly is free. Beyond the fee you only pay the curve’s price impact (slippage). An LP’s return comes from the curve spread and the time-release mechanism — the 2% fee does not accrue to LPs.
Get started
Browse live markets, place a bet, provide liquidity, or open your own market or vault.
Open the app →Building on top? Switch to the Detailed tab for the SDK and every instruction.