diff --git a/MATCHMAKING.md b/MATCHMAKING.md deleted file mode 100644 index 2d411d6..0000000 --- a/MATCHMAKING.md +++ /dev/null @@ -1,57 +0,0 @@ -# Prediction Market Matchmaking - -Idea: -Build order book with matchmaking => anyone can provide liquidity at the prices they desire. - -A market maker could still run by creating orders which others can fill to "kickstart the market". - - -**Example order flow:** - -`YES BUY 5 @ 80 <-> NO BUY 5 @ 20` - -YES: 5/80 | p=400/500=0.8
-NO: 5/20 | p=100/500=0.2
-total: 500 sats - -`YES SELL 1 @ 80 <-> NO SELL 1 @ 20` - -YES: 4/80 | p=320/400=0.8
-NO: 4/20 | p= 80/400=0.2
-total: 400 sats - -`YES SELL 1 @ 90 <-> NO SELL 1 @ 10` - -YES: 2/80 + 1/70 | p=230/300=0.7667
-NO: 2/20 + 1/30 | p= 70/300=0.2334
-total: 300 sats - -`YES BUY 10 @ 90 <-> NO BUY 10 @ 10` - -YES: 2/80 + 1/70 + 10/90 | p=1130/1300=0.8692
-NO: 2/20 + 1/30 + 10/10 | p= 170/1300=0.1307
-total: 1300 - -at any time, amount of YES shares in circulation must be equal to amount of NO shares in circulation. - -For every YES share bought at a price X, there must either be -* a NO share bought at (100-X) or -* a YES share sold at X. - -This makes sure that when one sides win, the other side has deposited enough sats to pay them. - -Order book will look like this: - -| YES BUY-IN | SELLs | NO BUY-IN | | -| -------------- |---------------- |---------------|----------------| -| YES BUY 5 @ 80 | YES SELL 5 @ 80 | | (filled order) -| YES BUY 5 @ 10 | | NO BUY 5 @ 90 | (filled order) -| YES BUY 1 @ 60 | | | (open order) -| | NO SELL 1 @ 20 | | - -Market stats: - -* amount of shares in circulation (amount of YES shares = amount of NO shares) -* Prediction for YES and NO (%) -* Expiry: 100 or 0 sats -