📊vAMM for Prediction Markets

The Prognoze vAMM model introduces key differences between existing prediction market platforms and previous vAMM iterations. We recommend familiarizing yourself with the vAMM model to understand how the protocol works.

• Each market consists of a single vAMM with two interdependent pools, representing YES and NO shares. These pools have a symbiotic relationship, meaning an increase in the price of one pool leads to a decrease in the other.

  • Prognoze employs a dual-pool virtual AMM system, where both YES and NO pools are interconnected through shared reserves (yesQuoteReserve and noQuoteReserve) and a constant reserve (sharesConstReserve).

• Unlike previous iterations of vAMMs, share prices are path-independent and fully internal to the protocol. Since the market does not rely on an external price feed, there are no funding fees.

• Instead, traders’ positions directly impact the price through the AMM pricing function.

• Prognoze does not use liquidity or liquidity providers. Our vAMM is 100% AMM based; there is no order book.

• Traders use USDC as collateral to buy YES or NO shares in a given event market. Every time a trade is made, the vAMM dynamically adjusts the price using an AMM-style pricing function, where buying YES increases its price while decreasing NO’s price, and vice versa.