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310 sats \ 1 reply \ @mega_dreamer 21h \ parent \ on: Predyx Just Got Bigger: User-Created Markets Are Live oracle
In LMSR the initial bootstrap liquidity is basically worst-case-loss (WCL). That's why its known as Liquidity Subsidy.
For example the market (Kash Patel) you created with 20k sats as liquidity and with the win probability of 15%.
Your initial cost = Global WCL = 37,943 sats.
What this means is, if NO wins, your market will incur a loss of 3251 sats, and if YES wins, your market will incur a loss of 37943 sats.
Best case loss:
If NO wins, you will receive 37943 - 3251 = approx 34,692 sats + fees collected.
Worst case loss:
if YES wins, you will receive 37943 - 37943 = approx 0 sats + fees collected.
The default market fees are very low at this time (buy: 0.45%, sell: 0.35%, win: 0.20%), and with current volume it will be very difficult to make profits from the liquidity provided.
My suggestion:
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If you're creating the market with the intention to make profit from liquidity provided, then either you must increase the fees. Max fees allowed on Predyx is 5% for each buy/sell/win. Or you will have to proactively trade on your market to cover the liquidity subsidy.
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If you're creating a market to elicit any valuable information that you might not be able to get from traditional media source, consider you liquidity as cost of seeking the valuable information.
Our current solution to deal with creators loss, due to low volume is to add the tipping functionality for creator to cover for the losses. When the trader of your market will rate your resolution, they will have the opportunity to tip the creator to cover the loss or possibly make more profits. At the time of rating, your trader will be able to see creators profit/loss from liquidity/fees. And make a moral judgement to tip or not.
Short-term:
At this point if time it is reputation based - the only way to police is to give ratings like (5 star or 1 star) on the resolution of the market. Always be wary of new user created markets.
Long-term:
Meanwhile, I've been working on non-custodial markets, once I achieve some success, we'll add oracle functionality to market resolutions.
My initial plan is to have few (around 21) trusted oracles on Predyx like @grayruby, @Undisciplined and yourself @BlokchainB and more. The market resolution must receive at least 11 oracle's vote for it to resolve.
Thanks for reporting the issue - and sorry for inconvenience caused.
I think we're still not able to handle high-frequency trading. Most probably the root cause in our LNBits server. We're hoping after upgrading to newer version we'll be able to address the performance issue. The older version that we're using didn't have web-sockets implementation.
The upgrade is already planned for the current sprint.
Expect the performance to sky-rocket in about 2-3 weeks or so.
Also a heads-up most probably we'll be releasing a new version of Predyx tomorrow morning.
Some very cool new features dropping with this release:
- Real-time AI Chat-bot and Market Analysis. AI will also recommend what to buy. More power to the new traders who are still figuring out prediction markets.
- User created markets - people will be able to create and resolve their own markets.
- Password reset via email.
Yes - it was a new trader. That was his first trade. Hope he comes back, we need whales like these at Predyx. His username is: jerry_loves_freedom
Yeah this was really fun market and kept the traders on their toes. Some of the best traders didn't see it coming.
Resolution Summary - WSH Commanders vs GB Packers (Sep 11): Packers win?
Winner: Yes
- ✅ chickendinner - 100 sats
- ✅ grayruby - 50000 sats
- ✅ karkar - 5000 sats
- ✅ liquidity_bot - 6610 sats
Total Payment: 61583 sats
Fee: 127 sats
Date: Sep 11, 2025 10:10 PM
Resolution Summary - WSH Commanders vs GB Packers (Sep 11): Packers win?
Winner: Yes
- ✅ chickendinner - 100 sats
- ✅ grayruby - 50000 sats
- ✅ karkar - 5000 sats
- ✅ liquidity_bot - 6610 sats
Total Payment: 61583 sats
Fee: 127 sats
Date: Sep 11, 2025 10:10 PM