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PAMM: A simple guide to how our prediction markets work

TL;DR PAMM is a pari-mutuel market. When the event resolves, winners split a shared wstETH pot. It's not a fixed "$1 if YES" system. You profit if your average cost per share ≤ payout per share at resolution. Being right on the outcome isn't always enough if you bought late/expensive.

What you're buying

  • A YES or NO share is a claim on a shared pot of wstETH.
  • The displayed odds come from the on-chain YES/NO pool (like a price). They move as people trade.

How payouts work

When the market resolves:

  • Payout per winning share = pot (after any resolver fee) ÷ circulating winning shares (Shares held by the protocol/AMM don't count in the denominator.)
  • Your total payout = your winning shares × payout per share.

Not fixed payout: There's no guaranteed $1 per winning share. Payout depends on how much was contributed to the pot and how many winning shares exist.

"I won the bet but lost money"—why that can happen

  • If you bought late on the already-favored side, your average cost per share might be higher than the final payout per share (because many other buyers minted more winning shares, diluting the split).
  • Result: you're right on the outcome, but your cost > payout, so you lose a bit.

How you make money here

  1. Be early & right (hold to resolution). Buy when you believe the true chance is higher than the current odds. If later trading and/or the losing side's spend grows the pot relative to your entry cost, your payout per share > your cost.
  2. Trade the move (before resolution). Buy when you think odds will rise; sell later if your refund quote exceeds your cost. (Quotes already include the tiny 0.10% pool fee; refunds are capped by the pot.)

Fees & fairness

  • A small 0.10% market-quality fee is baked into every trade quote. It discourages spammy in-and-out trades and helps the price reflect real conviction. No extra fee is taken at claim.

Timing rules

  • Trading is open until the market's close time.
  • After close (and after resolution), trading is disabled; winners can claim once resolved.

Simple example

  • Pot ends at 10 wstETH.
  • Circulating winning shares = 12.5.
  • Payout per share = 10 / 12.5 = 0.8 wstETH.
  • If your avg cost per share was 0.65, you profit (0.8 > 0.65).
  • If your avg cost was 0.85, you "won" but lose a bit at payout (0.8 < 0.85).

Pro tips for new traders

  • Check two numbers before you buy:

    • Projected payout if resolved now (pot ÷ current circulating winners)
    • Your avg cost per share (shown on your ticket) Aim for projected payout ≥ your cost.

  • Late buys on a heavy favorite can still lose money at resolution—consider taking profits before resolution if your sell quote is above your cost.

  • Short windows & on-chain outcomes (like ICO milestones) are friendliest to learn on: clear info, clear timelines.

Why PAMM?

  • On-chain, transparent math (pot & shares are visible).
  • Capital-efficient (no $1-per-share collateral requirement).
  • Flexible: you can hold to resolution or trade the move.

One-liner you'll see in the UI

Not a fixed-payout market — winners split a shared pot; profit when your average cost per share is at or below the final payout per share.