🎯 What is this?
A simulator to understand how prediction markets work. Control all 4 players (A, B, C, D) to simulate a small market.
📊 Market Types
Two modes available:
- Parimutuel: Pool-based betting, winners split the pot
- LMSR: Continuous market with dynamic prices
Use the tabs above to learn about each mode in detail.
📊 Parimutuel Mode
All players place bets into a shared pool. After betting closes, the market is resolved.
How it Works
- Winning bets split the entire pool proportionally
- Payout = stake × (total pool / total on winning side)
- Losing bets get nothing
Example
If $1000 is staked on YES and $500 on NO:
- Total pool = $1500
- If YES wins: each $1 on YES gets $1.50 back
- If NO wins: each $1 on NO gets $3.00 back
📈 LMSR Mode
Continuous market with dynamic prices. Each trade changes the odds immediately.
How it Works
- LMSR = Logarithmic Market Scoring Rule
- Prices move based on quantity purchased
- Liquidity (b) controls how much prices move per trade
- Buy shares of YES or NO; each share pays $1 if correct
Example
Buying 10 YES shares might cost $5.50:
- If YES wins: shares redeem for $10 → +$4.50 profit
- If NO wins: shares worth $0 → -$5.50 loss