Notes on Market Mechanisms

  • Centralized
    • Order Book
      • Also called: Continuous Double Auction
      • Cons: large spread when few participants;
    • Fixed-wager bets in horse racing
  • Automated Market Makers:
    • Works better in low-liquidity situation
    • Uniswap-style x*y=k
      • Fixed constant that you can input
      • Payment to liquidity providers
      • More for pairs of tokens than for
    • LSMR?
      • TODO
    • Parimutuel Betting: You get a proportion of the bets on your pool
      • Pros: Very simple
      • Cons: No benefit to betting early; don't know what the payout is
      • Example: Twitch stream betting games
    • "Dynamic Parimutuel Betting": Account for bet ratio at time of entry?
      1. DPM.pdf138.2KB
      2. Cons: Don't know what the payout is?
        • Apparently: no selling market?
      3. Q: Why isn't this implemented in more places?