Loans currently work by loaning back daily a portion (2%) of purchase price, to be repaid when shares are sold or the market resolves. With loans, you only get more than market price if you sell or the market resolves in your favor.

So, I propose dividends (switching to % of market price) to incentivize betting and holding on markets that will never resolve.

Dividends would work by paying out daily a portion of the current value of remaining unvested shares. Whenever you sell, the proportion of shares that have already vested are sold at purchase price instead of market price (the rest are sold at market price). When the market resolves, you subtract the dividend already paid out from your winnings.

Mostly, it would be similar to loans with a slightly less predictable payout schedule. But because of initial liquidity subsidization, markets are positive-sum on expectation for bettors, moreso if more liquidity is added. This means that with dividends, a good bet will asymptotically make money without selling or waiting for the market to resolve.

Never-resolving markets that pay positive-sum dividends would make the Destiny users happy, because of permanent stocks, and enable all sorts of interesting other things, some of which I went into at the end of this (mostly unrelated) post: https://manifold.markets/post/literate-predicting-in-progress-v1.

Uh, also correct me if there is some financial instrument which operates in this fashion and I've forgotten the name of, because it's on the tip of my tongue.

Nov 18, 8:47pm: Will Manifold change from using loans to using dividends? → Will Manifold loans change from % cost basis to % market price?