The AMM

Always on

Every board on PopularityX is priced by an automated market maker. You trade directly against it, with no order book and no counterparty to match. The AMM quotes a buy and sell price for every position at all times. A market is never closed and never illiquid.

Based on Hanson's LMSR

The design is grounded in Robin Hanson's Logarithmic Market Scoring Rule, a mechanism designed specifically for multi-outcome prediction markets. Hanson's original paper (opens in a new tab) established that a log-scoring rule can be used to create a market maker that prices any number of outcomes simultaneously. The PopularityX AMM builds on that foundation with several extensions required for on-chain perpetual markets.

Gas optimised

The implementation is optimised so that trade cost does not grow with the number of positions on a board. A board with a hundred positions costs the same to trade against as one with five. This makes large, detailed boards practical on-chain.

Long and Short tokens

Traditional LMSR prices only the Long side of each outcome. The PopularityX AMM is extended to price Short tokens natively. A Short token is a composite of every other Long token on the board, and the AMM prices it as such, with no separate mechanism required and without iterating over the composite tokens. See Tokens for how the token model works.

Instantly liquid

Opening a new board requires no external capital. The AMM provides liquidity from its own internal accounting. Any board is instantly liquid across every position from day one, with zero external capital.

Expandable

New positions can be added to a live board at any time. When a position is added, the AMM prices it as a proportion of Long Other's current share, which decreases accordingly. All other positions are unaffected.