Aqua Outcome Market

Problem Statement

AOM Implements a novel AMM invariant describe by Ciamac Moallemi and Dan Robinson in pm-AMM: A Uniform AMM for Prediction Markets and is specifically derived for use in markets which follow a "Gaussian Score Dynamic".This type of market allows AMMs to be used in binary option, sports games, elections and more.This allows liquidity providers to mitigate Loss vs rebalancing which is inherent in AMM style markets. By providing liquidity concentrated around the most volatile part of the price curve (50/50) and scaling liquidity down as the market approaches "expiration" LP's costs are greatly minimized.To further increase capital efficiency, AOM allows LP's to make a market in several instruments at the same time using the same capital base without having to hold inventory or commit any funds to a market.Increasing capital efficiency even further, AOM's Just-In-Time liquidity allow funds to accrue yield in lending markets while standing by to provide liquidity to the prediction market on demand.Additionally, AOM enables access to credit based market making, allowing LP's to fulfill swaps and provide liquidity via borrowed funds, allowing LP strategies to become an overlay to a portfolio of other asset holding not necessarily denominated in USD. LP's are enabled to hold liquid staked ETH, earning a yield, and when advantageous they can provide liquidity in USDC to an array of prediction markets.

Solution

AOM is Built on swapVM and Aqua by 1 Inch..We utilize swapVM's bespoke instruction architecture to implement a novel AMM invariant for pricing specific to prediction market instruments.SwapVM and Aqua's built in Virtual Reserve and multi market architecture allow us to enable LP's to create AMM's and provide liquidity across range of outcome based markets.Utilizing SwapVM's hook implementation we enable just in time liquidity, integrating the hook with euler's evc operator to borrow or withdraw from a money market on demand to fulfill a swap and provide liquidity. Thus generating a base level of yield for prediction market LPs.The LP is enabled to put their capital to work while market making. Using JIT, we simply pull the capital necessary to provide liquidity at the exact time it's needed and underwrite (mint) the outcome tokens in response to actual demand.