Explain market math geometrically.
6
277
Ṁ4.1Kresolved Mar 16
1D
1W
1M
ALL
100%95%
DPM as a path through YES/NO sharespace
0%3%
ANTE: Stake on this to subsidize the market.
0.4%
Chen's discord sketch in features channel, Feb 25th https://media.discordapp.net/attachments/915138780653051910/946966415473250395/g2bMrueMdUryQAAAABJRU5ErkJggg.png
1.1%
Dummy answer for paying out ante shareholders
I will buy answers that improve my understanding of market math, in particular that which MM uses or will use. Feel free to do the same.
Close date updated to 2022-04-11 11:59 pm
Close date updated to 2022-03-16 6:33 pm
Mar 16, 6:23pm: 87 profit ever made, 3% of that is about M$3, M$3 paid out to the ante pool.
Mar 16, 6:34pm: I didn't learn anything from #3, so #2 gets the rest.
Get Ṁ200 play money
🏅 Top traders
| # | Name | Total profit |
|---|---|---|
| 1 | Ṁ26 | |
| 2 | Ṁ4 | |
| 3 | Ṁ2 | |
| 4 | Ṁ2 | |
| 5 | Ṁ0 |
Sort by:
Oh no! I have written the second paragraph very badly. Let my try again, and add this sketch for compensation. http://sketchtoy.com/70478043
If the market has 0 YES and 4000 NO, staking 2000 M$ on YES will move to the right until the 6000-circle is hit. Then suppose someone else stakes another 2000 M$ YES, moving further right to the 8000-circle. Selling the first YES stake will now move the same distance left as buying it moved right, for about a +75% profit.
I liked this visualization and wish there were more in this vein!
Wish I had a direct link to the post, can't figure out how to get that on mobile.
See also "https://excalidraw.com/#json=E7GXmhhtK23ev_O5s1d0J,csk1oYOxzQjWX5f-r3Mgyg if anyone wants to build on top of this"
https://i.ibb.co/M2nTfBq/kiev2000.png graphs the history of https://manifold.markets/Duncan/will-russia-control-kyiv-as-of-apri . Buying YES moves right, buying NO moves up, selling YES moves left, selling NO moves down. The distance from the origin is the size of the pool, and so the circles are curves of equal pool size. The distance from the vertical axis is the total amount of YES shares. The distance from the horizontal axis is the total amount of NO shares.
If the market has 0 YES and 4000 NO, staking 2000 M$ will move to the right until the 6000-circle is hit. Then suppose someone else stakes 2000 M$ NO, moving further right to the 8000-circle. Selling the first NO stake will now move the same distance left as buying it moved right for about a +100% profit.
Upon YES/NO resolve, the market follows a circle to the axis it resolved to, stretching the value of shares along the way. If a whale buys that side to 99%, moving to the axis will barely stretch the shares. That's the primary DPM issue. But every share on the correct side is worth at least M$ 1, so we can imagine one's profit as made of a guranteed and a stretch component.
Picking different curve shapes gets different market systems. Uniswap can also be graphed this way. This implies how to fix DPM.
I would have paid enough to make this answer's author about 200 M$ if I didn't know it yet.