Economics
Fee Structure
Section titled “Fee Structure”| Fee | Rate | Recipient | When |
|---|---|---|---|
| Treasury fee | 2% | Protocol | At resolution |
| Creator fee | 1% | Market creator | At resolution |
| Total | 3% | — | — |
Key points:
- Fees come from the losing pool only — winners never pay fees
- No fees on entry — 100% of your bet enters the pool
- The market creator earns 1% regardless of which side wins
Payout Math
Section titled “Payout Math”After resolution:
losingPoolAfterFees = losingPool × 0.97yourPayout = yourBet + (yourBet / winningPool) × losingPoolAfterFeesWorked Example
Section titled “Worked Example”A BTC market has 200 QUAI in the Yes Pool and 100 QUAI in the No Pool. Yes wins.
| Step | Calculation | Result |
|---|---|---|
| Losing pool | No Pool | 100 QUAI |
| Fees (3%) | 100 × 0.03 | 3 QUAI (2 treasury, 1 creator) |
| Losers’ pool after fees | 100 - 3 | 97 QUAI |
| Total to winners | 200 + 97 | 297 QUAI |
Your payout if you bet 20 QUAI on Yes (10% of Yes Pool):
- 20 + (20/200) × 97 = 29.70 QUAI
- Profit: 9.70 QUAI (48.5% return)
Your payout if you bet 20 QUAI on No:
- You lose everything. 0 QUAI back.
Payout Multiplier
Section titled “Payout Multiplier”Before betting, you can estimate your payout multiplier:
multiplier = 1 + (losingPool × 0.97) / (winningPool + yourBet)The contract exposes estimatePayout(isYes, amount) to simulate this on-chain.
Pool Impact
Section titled “Pool Impact”On parimutuel markets, your bet changes the odds. This matters most on thin pools:
| Your bet | Pool size | Odds shift |
|---|---|---|
| 10 QUAI | 1,000 QUAI | ~1% — negligible |
| 50 QUAI | 200 QUAI | ~15% — significant |
| 100 QUAI | 100 QUAI | ~33% — you’re now half the pool |
Rule of thumb: if your bet is more than 10% of the pool you’re entering, you’re meaningfully moving the odds against yourself.
Creator Economics
Section titled “Creator Economics”Market creators earn 1% of the losing pool. This is pure income — you get it regardless of whether your seed bet wins or loses.
| Scenario | Losing pool | Creator fee |
|---|---|---|
| Quiet market | 200 QUAI | 2 QUAI |
| Active market | 5,000 QUAI | 50 QUAI |
| High volume | 50,000 QUAI | 500 QUAI |
The creator fee incentivizes creating markets that attract volume. Strategies: pick popular assets, use round strike prices, target 50/50 implied odds, and time markets around catalysts (earnings, Fed meetings, etc.).
On-Chain Parameters
Section titled “On-Chain Parameters”| Parameter | Variable | Default | Unit |
|---|---|---|---|
| Treasury fee | treasuryFeeBps | 200 | basis points |
| Creator fee | creatorFeeBps | 100 | basis points |
| Min seed bet | minSeedBet | ~100 QUAI | wei |
| Min duration | — | 15 minutes | — |
| Min close buffer | — | 5 minutes before resolution | — |