We have carefully studied multiple prediction market algorithms below: Logarithmic Market Scoring Rule, invented by Robin Hanson, required a manually set liquidity parameter. Dynamic Parimutuel betting, has proven to be unfair to early players because the payout is determined at the end of the event. Constant function market maker, used by Uniswap and Polymarket, but the liquidity providers will inevitably lose money. Polymarket has recently decided to move away from its AMM. Existing Automated Market Maker (AMM) algorithms aim to mitigate financial losses for market operators. Therefore, there are always some flaws in each algorithm. WOC Street invented a modified algorithm and will continue to iterate based on user feedback. To maintain the stability of the market, a dynamic trading fee is also imposed. This fee helps to avoid inflation and arbitrage at the end of the event.
Last modified 4mo ago