Oddbean new post about login | logout Can you please elaborate? Why is it not interesting to know how much is in the bets? Isn't it way more interesting than the volume if any party can just spawn and wipe out volume? If done quickly, this should boost the volume for free. Granted, it would also increase the "open interest" for a second but that's easy to ignore if you track the median open interest over the last week or so. Also how do bets get bootstrapped? So there is a bet X. How is liquidity created. Who determines the price initially? If I think, odds are 20%, so I would be willing to buy yes for 19ct and no for 79ct, who do I buy from?
s/spawn and wipe out volume/spawn and wipe out bets/g
Only market determines prices. You mint yes and no tokens (only on the platform, they are not crypto tokens). Their combined value is exactly 1$ (because either yes or no happens and the payout of one will be 1, payout of the other 0). You can then add a limit sell order to the order book for whatever price you want. And when someone wants to buy for the price, voila the market has spoken and initial price is born. The process then repeats, like on any other market. How much is in the bets is not interesting, because you can create arbitrary amount of bets, without price risk. Holding both tokens does not add any information to how risky it is. Volume is interesting. Most interesting is the full order book.