πΈValue Transfer Events
Value Transfer Events are the smart contract functions that move ownership rights of deposited collateral between players.
Capital within existing positions are redistributed as part of a Value Transfer Event whenever players add or remove capital from a pool, where the winnerβs profits p
, is equal to the True Odds of their side of the pool o
, multiplied by the percentage shift in the reference price since the last Value Transfer Event s
, multiplied by their Mimeβs position size m
.
Conversely, a loserβs losses l
, is equal to the percentage shift in the reference price since the last Value Transfer Event, multiplied by their Mimeβs position size, without factoring True Odds at all.
Token Flow Illustration
The following chart illustrates how tokens might flow between two sides of a Pantomime at different Value Transfer Events.
In this example: Letβs assume for a given Pantomime that Alice represents all bulls who believe the reference price will rise, and Bob represents all bears who think the price will fall. And they are both using USDT. As you can see below, losers always lose at a 1:1 ratio of reference price movement, while winners earn at the rate of reference price movement relative to their True Odds.
Related: Skew Change Risk
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