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Prediction Markets Exchange

Comprehensive guide to PMX presales, trading, and mechanics

Contents

What is PMX?

Prediction Markets Exchange (PMX) is a decentralized prediction market platform built on Solana. It enables users to create markets, provide liquidity, and trade on future events with transparent mechanics and fair resolution processes.

Key Features

  • • Decentralized market creation and trading
  • • Automated liquidity provision with uncapped gains
  • • Transparent resolution mechanisms
  • • Cross-platform token trading on Solana

Presales

Market Creation Process

Anyone can create a prediction market through our presale system. To get your market listed, you need to raise funds from the community to demonstrate interest and viability.

Funding Requirements

Choose Your Tier: $10,000 - $100,000 USDC

Creators can select any amount within this range

Contributors are automatically whitelisted proportionally to their funding amount

Once sold out, markets are forwarded to PMX team for manual approval

How to Participate

  1. Find a presale market you want to support
  2. Send SOL or USDC to the funding wallet
  3. Get automatically whitelisted based on your contribution
  4. Wait for market approval and launch

Example: If YES pool has $1,000 and you bet $500, your odds are ~66% (1000/1500). The earlier you bet and the more you contribute, the better your odds AND the higher your share of future trading fees!

Delta Neutral Strategy: You can bet $250 on YES and $250 on NO to help the presale migrate while earning fee share on your $500 total contribution, with minimal directional risk.

No Risk: If the presale doesn't reach its migration goal, all USDC is fully refunded to participants.

Liquidity Provision

Uncapped Gains for LPs

Liquidity providers receive both their initial capital back and a share of profits or fees, depending on whether the market is pre-bond or post-bond. This creates potential for unlimited upside based on market performance.

Pre-Bond Markets (Before LP × 2 Volume)

Profit Sharing (60-20-20 Split)

Pre-bond markets use variable profit-sharing. LPs receive their initial LP back plus 20% of profits from the losing side's liquidity, fees, and sellers.

• Initial LP Return: Get back your full initial LP contribution

• Profit Share: Receive 20% of profits from losing side's liquidity/fees/sellers

• Split: 60% Traders - 20% LPs - 20% PMX

Pre-Bond Example Calculation

• Seed: $10,000 in $50,000 presale (20% share)

• Market is pre-bond (hasn't reached LP × 2 volume)

• Profits from losing side: $50,000

• LP profit share: $50,000 × 20% × 20% = $2,000

• Total LP return: Initial $10,000 + $2,000 = $12,000

Post-Bond Markets (After LP × 2 Volume)

Fee Distribution (50-50 Split)

Post-bond markets use guaranteed fee distribution. LPs receive 50% of all trading fees generated by the market, proportional to their initial contribution.

• Guaranteed Fee Share: Receive 50% of all trading fees

• Proportional Distribution: Based on your initial LP contribution

• Split: 50% LPs - 50% Platform

Post-Bond Example Calculation

• Seed: $10,000 in $50,000 presale (20% share)

• Market has reached LP × 2 volume (post-bond)

• Market volume: $100M

• Total fee pool: $100M × 1% = $1M

• LP fee share: $1M × 50% × 20% = $100,000

• Total LP return: Initial $10,000 + $100,000 = $110,000

Risk-Reward Profile

  • • Capital Preservation: Get your initial investment back in both pre-bond and post-bond markets
  • • Pre-Bond Upside: 20% profit share from losing side's liquidity/fees/sellers
  • • Post-Bond Upside: 50% guaranteed share of all trading fees
  • • Uncapped Potential: No limit on potential gains from market volume and performance
  • • Market Selection: Choose markets you believe will generate high volume
  • • Viral Potential: Bet on which markets will capture public attention

Trading Mechanics

Token Launch Structure

Once a market is approved and goes live, two separate tokens are created for each outcome, enabling flexible trading across the Solana ecosystem.

Token Specifications by Tier

$10K - $50K Tier

  • • Market cap per token: $500K
  • • Total market cap: $1M
  • • Tradeable on all Solana DEXs

$50K - $100K Tier

  • • Market cap per token: $5M
  • • Total market cap: $10M
  • • Tradeable on all Solana DEXs

Note: Each tier maintains 50/50 odds by adjusting token supply, not price per token.

Trading Platforms

PMX tokens can be traded on any Solana DEX, including:

  • • Jupiter
  • • Raydium
  • • Orca
  • • Axiom
  • • Meteora
  • • And more...

Orderbook-Style Liquidity

PMX uses an orderbook-style architecture where betting on one side shifts liquidity to the opposite side:

Bet on YES: Liquidity removed from YES pool, added to NO pool

Bet on NO: Liquidity removed from NO pool, added to YES pool

This creates dynamic, responsive odds that reflect true market sentiment while maintaining balanced liquidity.

Market Resolution & Payouts

Resolution Process

When a market reaches its resolution date, the platform automatically executes the settlement process to determine winners and distribute payouts based on whether the market is pre-bond or post-bond.

Pre-Bond Markets (Before LP × 2 Volume)

Variable Payout System

Pre-bond markets use variable payouts based on profits from the losing side's liquidity, fees, and sellers. The split is 60-20-20 (Traders-LPs-PMX).

Traders on Winning Side - NO DOWNSIDE:

  • • Get back ALL initial capital (including slippage) - guaranteed
  • • Receive 60% of profits from losing side's liquidity/fees/sellers
  • • Guaranteed profits - zero downside risk

Liquidity Providers:

  • • Get back initial LP
  • • Receive 20% of profits from losing side's liquidity/fees/sellers

PMX Platform:

Receives 20% of profits from losing side's liquidity/fees/sellers

View Your Payout: Click the 'Payouts' button on each market's page to calculate and see your estimated payout.

Post-Bond Markets (After LP × 2 Volume)

Guaranteed Payouts

Traders:

  • • Receive 100% guaranteed payouts at 100% odds
  • • All payouts are guaranteed regardless of market performance

Liquidity Providers:

Receive a guaranteed 50% split of trading fees, proportional to their initial contribution

Settlement Steps

1

Liquidity Withdrawal

All liquidity is withdrawn from both tokens to prevent further trading

2

Winner Determination

Platform determines the winning outcome based on real-world events

3

Payout Distribution

Payouts are distributed via airdrop based on market type (pre-bond variable or post-bond guaranteed)

Post-Bond Payout Examples by Tier

$10K-$50K Tier ($1M Market Cap)

If you hold 1,000 YES tokens and YES wins (post-bond):

Payout: 1,000 × $0.001 = $1.00 (guaranteed)

$50K-$100K Tier ($10M Market Cap)

If you hold 1,000 YES tokens and YES wins (post-bond):

Payout: 1,000 × $0.01 = $10.00 (guaranteed)

Note: Pre-bond markets use variable payouts (60-20-20 split). Post-bond markets guarantee 100% odds payouts. See rules page for details.

Internal Mechanics

Arbitrage System

PMX uses an automated arbitrage mechanism to maintain market efficiency and generate additional profits for liquidity providers.

Option Wallets

Token Allocation

  • • 99% of both YES and NO token supply moved to separate option wallets
  • • These wallets act as automated market makers
  • • Maintain total market cap at $10M target

Arbitrage Logic

Below $10M: Option wallets buy tokens until target reached

Above $10M: Option wallets sell tokens until target reached

Profit Distribution: Arbitrage profits shared with liquidity providers

Market Efficiency

  • • Price Stability: Maintains consistent total market cap
  • • Liquidity: Ensures adequate trading liquidity
  • • Arbitrage Profits: Generates additional returns for LPs
  • • Fair Pricing: Prevents manipulation and ensures fair odds

Architecture

Phase 1: DAMMV2 AMM (Current)

PMX currently operates on a DAMMV2 AMM architecture that intelligently manages liquidity and risk through dynamic pool allocation and automated arbitrage mechanisms.

Pool Initialization

Example: 70/30 odds with $10K initial LP

• YES pool: $3K liquidity

• NO pool: $3K liquidity

• Equal liquidity allocation regardless of odds

Automated Arbitrage

Trigger: When odds sum above 100% (e.g., 60/50)

Action: Sell both sides proportionally to restore 100% (55/45)

Benefit: Maintains market efficiency and generates arbitrage profits

Risk Management System

Payout Tracking Formula

Available Funds: (Liquidity in pools + USDC in arbitrage wallets + swap fees)

Required Payouts: (Initial LP + circulating tokens × 100% odds payout value)

Result: Positive = profit, Negative = loss risk

Dynamic Liquidity Withdrawal

Max Risk Threshold: 10% of initial LP

Withdrawal Scale: Risk % ÷ 10% = Liquidity withdrawal %

Example: 5% risk = 50% LP withdrawal

Maximum: 10%+ risk = 90% LP withdrawal

Volume Requirements

Fee Rate: 5% on all trades

LP × 2 Volume: Generates 10% of initial LP in fees

Risk Coverage: Matches maximum 10% risk threshold

Counterparty Alternative: Sufficient USDC can reduce volume requirements

Phase 2: DLMM Integration (Future)

PMX is developing a Dynamic Liquidity Market Maker (DLMM) system that will concentrate liquidity in bid-ask curve spreads, creating an orderbook-like experience similar to Kalshi and Polymarket.

DLMM Features

Concentrated Liquidity

  • • Liquidity distributed across price bins
  • • Creates bid-ask spread similar to orderbook
  • • Enables limit order-like functionality

Dynamic Market Making

  • • Liquidity shifts based on price action
  • • Automated market making using user LP
  • • More efficient than traditional AMM

Platform Parity

This architecture will bring PMX in line with established prediction market platforms like Kalshi and Polymarket, providing users with familiar trading experiences while maintaining the benefits of decentralized liquidity provision.

Vision

The Meteora Meets PumpFun of Prediction Markets

PMX aims to become the core infrastructure layer for prediction markets by democratizing market creation and solving the critical liquidity bootstrapping problem through a presale-to-migration model.

Democratizing Market Creation

Anyone Can Create Markets

Just like PumpFun enables anyone to launch tokens, PMX enables anyone to create prediction markets

No barriers to entry - simply raise community funding to demonstrate market viability

Community-driven market selection ensures only the most interesting topics get funded

Solving the Liquidity Problem

Risk-Free Liquidity Provision

LPs get their initial capital back plus uncapped upside from trading volume

Future liquidity deepening - ability to add liquidity to existing markets

Automated arbitrage and market making ensures optimal liquidity distribution

Core Infrastructure Vision

Prediction Market Infrastructure

PMX becomes the go-to platform for prediction market liquidity and trading

Cross-platform token trading on all Solana DEXs increases accessibility

Solving liquidity enables prediction markets to scale to mainstream adoption

🎯

The Key Innovation

By allowing LPs to contribute to prediction markets and earn yield risk-free, PMX solves the fundamental liquidity problem that has prevented prediction markets from achieving mainstream adoption. This positions PMX as the essential infrastructure layer for the entire prediction market ecosystem.

$PMX Token

Revenue Distribution Mechanism

PMX will implement either a buyback program or staking mechanism to redistribute platform revenue directly to $PMX token holders, ensuring sustainable value accrual aligned with platform growth.

Revenue Distribution Options

Buyback Program

Platform profits will be used to buy back $PMX tokens from the market, reducing supply and increasing token value for holders.

Staking Rewards

Stake $PMX tokens to receive proportional shares of platform profits, creating a direct revenue stream for committed token holders.

🚀

Implementation Details Coming Soon

More details regarding the specific revenue distribution mechanism will be announced on our official Twitter. Stay tuned for updates on how $PMX token holders will benefit from platform growth and trading volume.

Governance & Resolution

Current Resolution System

PMX currently uses a manual resolution system similar to Kalshi's approach, with plans for future decentralization through token-based governance.

Manual Resolution

Current Approach

  • • PMX team manually resolves markets
  • • Similar to Kalshi's resolution process
  • • Only approved markets that can be objectively resolved
  • • Fast resolution timeline

Market Selection

Initially, only markets with clear, verifiable outcomes will be approved to prevent controversy and ensure fair resolution.