How Markets Work
Understanding Oyrade's market mechanics helps you make better predictions.
Market Structure
Each market represents a binary question:
"Will [EVENT] happen by [DATE]?"
Examples:
- "Will $BONK reach $0.001 by March 1st?"
- "Will ETH be above $5,000 on April 15th?"
- "Will candidate X win the election?"
Shares: YES and NO
Every market has two types of shares:
| Share | Meaning | Payout if Correct |
|---|---|---|
| YES | Event happens | $1.00 USDC |
| NO | Event doesn't happen | $1.00 USDC |
Combined value of 1 YES + 1 NO share always equals $1.00 USDC.
How Prices Work
Share prices range from $0.01 to $0.99:
- Price = Implied Probability
- YES at $0.70 = 70% chance event happens
- NO at $0.30 = 30% chance event doesn't happen
These always sum to $1.00 (minus small spread).
Making Money
Buy Low, Correct High
If you think the market is wrong:
- Underpriced YES: Buy YES if you think probability is higher than price
- Underpriced NO: Buy NO if you think probability is lower than price
Example
Market shows YES at $0.40 (40% implied)
You believe true probability is 70%
Buy 100 YES shares for $40
If correct: 100 × $1.00 = $100 (150% return)
If wrong: Lose $40
Liquidity & AMM
Oyrade uses an Automated Market Maker (AMM) with bonding curves:
- Always liquidity available to trade
- Prices adjust based on supply/demand
- Large trades move the price more
LMSR Curve
We use LMSR (Logarithmic Market Scoring Rule) for optimal price discovery-same as Polymarket.
Market Lifecycle
- Creation - Market opens for trading
- Trading - Buy/sell shares as odds change
- Expiry - Trading stops at cutoff time
- Resolution - Oracle determines outcome
- Settlement - Winners receive $1.00/share