Market Dynamics

Note: Listed market dynamics account for launch and resolution of v1 markets only.

We are taking an instance of a hypothetical sample market to give an overview of all the processes involved in establishing and resolving a market.

Sample Market Overview

To enhance community engagement and facilitate informed decision-making, a Proposal Grant Betting Market has been established on Optimism. The Proposal Grant Betting Market offers participants the opportunity to wager on which proposals will be awarded grants within a specified cycle. With 30 distinct options available for betting, participants can strategically allocate their resources across multiple proposals during the designated betting period.

Reward Distribution Protocol

The reward distribution process unfolds in two distinct phases:

1. Claim Initiation

   • Following the conclusion of the betting period, the market will be promptly updated with the results of the grant distribution cycle.

   • Simultaneously, the claim process will commence, allowing participants to verify the outcomes of their bets and initiate the claiming procedure.

2. Claim Period

   • During the claim period, participants can review the market results to determine the success of their bets.

   • Those whose wagers align with the awarded grants can proceed to claim their rightful share of the market rewards.

Resolution Procedure

The determination of each market participant's share is achieved through the calculation of their winning share relative to the total market share. This ratio is then utilized to compute their payout by multiplying it with the total market volume. This method ensures equitable distribution of resources commensurate with individual performance within the market ecosystem.

In the calculation of share value, several key terms are employed:

1. Winning Share: This denotes the aggregated value of a participant's bet across all options that emerge victorious within the market.

2. Total Winning Share: This represents the aggregated value of all participants' bets across all winning options within the market.

3. Market Volume: This signifies the aggregated value of shares encompassing all options available within the market.