🔮 Minting/Merging Prediction Token

Minting and Merging of Prediction Tokens are handled seamlessly in the orderbook. When someone made a bid order of a PT, a bid order for the same quantity of negation of the PT is also made.

Mint

Example: When Alice submitted a bid of YES token with 1.25x Odd, a NO token bid is simultaneously created, with 5x Odd. The rationale behind is, Alice is looking for someone who sell her YES token at 1.25x, she is ALSO looking for someone who wants to buy a NO token at 5x.

$$(Odd(\textcolor{#228B22}{YES}) - 1) * (Odd(\textcolor{red}{NO}) - 1)= 1$$

If Alice found a NO Token buyer (Bob), the transaction in behind would take their collateral token, mint YES and NO token, and send to them respectively.

Mint function would trigger, when there are 2 buying parties covering all possible occurrences.

Merge

Example: When Alice now wants to sell her YES token with 1.25x Odd, like the example above, a NO token ASK is also created, with 5x Odd. The above formula still holds.

If Alice found a NO Token seller (Bob), the transaction would take their Prediction Token, merge them and retrieve collateral token, then send to Alice and Bob accordingly.

Merge function would trigger, when there are 2 selling parties covering all possible occurrences.