Mechanism
APMM
In traditional prediction markets, low-probability outcomes often suffer from poor liquidity — making them hard to buy or sell. When each outcome is isolated in its own order book, long-tail and niche markets receive little attention, leading to liquidity collapse and a frustrating user experience.
Bayes Market solves this by introducing an Automated Prediction Market Maker (APMM) — a novel design that ensures deep, continuous liquidity across all outcomes:
❌ No reliance on traditional order books or centralized counterparties
🌍 Open market-making — anyone can contribute liquidity and earn returns
⚙️ Algorithmic pricing replaces manual matching, enabling instant trades anytime
🟢 Buying Process
1. Deposit USD and Mint Option Tokens
The user begins by depositing USDC into the APMM liquidity pool. Based on the deposited amount, the system mints an equal value of tokens for each outcome. For example, if there are three outcomes (A, B, and C), the system mints a proportional number of A, B, and C tokens.
2. Select the Target Outcome Token
The user then selects their preferred outcome. The APMM automatically converts the tokens of the unchosen outcomes into the selected one. For instance, if the user selects outcome A, the system will convert all B and C tokens into A tokens.
3. Transaction Complete
The user receives a token bundle composed entirely of A tokens, representing their position. The USDC deposited is retained in the APMM as collateral, and the trade is recorded on-chain.
🔴 Selling Process
1. Submit Tokens for Redemption
To sell, the user deposits their outcome tokens (e.g., A tokens or a mix of A/B/C) into the APMM liquidity pool.
2. Receive All Outcome Tokens Equally
The APMM returns an equal amount of all outcome tokens (A, B, and C) based on the quantity submitted.
3. Burn Tokens and Redeem USD
The user burns the full set of outcome tokens and redeems the equivalent amount of USDC, completing the sell transaction. At this point, the token value is converted back into USD.
⚙️ The Core of APMM:
This entire trading process is powered by the automated pricing and conversion mechanism within the APMM liquidity pool — the engine that enables seamless, permissionless trading across all outcomes.
Still need help？
we’d love to help you get the most out of Bayes.
1️⃣Join our Discord：👉 https://discord.gg/hb4R2jwa82
(Our team is active and usually responds faster there.)
2️⃣Email us：👉info@bayeslabs.tech
Last updated