📊vAMM for Prediction Markets

Our vAMM model differs in a few key aspects from existing prediction market platforms as well as previous iterations of the vAMMs. We recommend familiarising with the vAMM model to understand how the protocol works.

• Each vAMM consists of two internal vAMMs representing Yes and No shares in the market. Both internal pools have a symbiotic relationship between each other, where an increase in price of one pool causes a decline in price of another pool, and vice versa.

• The outcome share prices are independent and internal to the protocol. The Yes and No share prices are not anchored to any external price feed and therefore the concept of funding fees does not exist. Traders' positions directly impact the price.

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

• Traders use collateral (USDC) to purchase Yes or No shares in a given event market. Every time a trade is made, the vAMM calculates the entry or exit price in the same way prices are calculated on Uniswap or other AMM style exchanges.

Simple representation of how prices are correlated.