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Creating Markets on PlotX
Before any prediction can be placed, thereโs one thing that needs to happen first - Market Creation Transaction. This explains how that happens.
Before a market goes live on PlotX, it has to be created on the Ethereum mainnet first. PlotX has a unique AMM mechanism that helps its users initiate market creation by letting them sign the Ethereum transaction that is required to create markets.
PlotX incentivises its users to perform this โMarket Creation Transactionโ in two ways:
- 1.Users who perform the market creation transaction can claim a dynamically calculated amount of $PLOT that has potentially an equal value as the amount of ETH they spend in Gas fees.
- 2.A chance to get up to 5% of the reward pool of the market that they create.โ
How to create Markets
The steps to create a PlotX market are simple:
1. If you see that a particular market is not live, then, you can click on the โCreate Marketโ button to start the market creation process.
2. Once you click on the button, the market creation transaction will be automatically initiated.
3. You will need to approve the transaction via your connected wallet and pay the required Gas fees in ETH.
4. Once the transaction is complete the market will become live for predictions to be placed in it.
Once the market is live, you will be able to claim your rewarded $PLOT from the My Account page instantly.
Market Creator can also claim a minimum of 0.5% and a maximum of 5% of the reward pool of their created market based on the number of $PLOT staked by them in Play Mining.
More on market creatorsโ incentives
Incentive #1: PLOT for Gas fees
- Whenever a user creates any market by signing the market creation transaction, one of the incentives they receive for paying the necessary Gas fees, is in the form of a dynamically calculated amount of $PLOT tokens which will potentially have the same value as the amount of $ETH the user pays in Gas fees for the market creation transaction.
- The exact amount of $PLOT the market creator ends up receiving is calculated in the following manner:
Incentive in $PLOT for market creation = (Gas Amount Used * Gas Price) / Price of PLOT in ETH- Here,
- Gas Price = Whichever of the following is the minimum: i. Gas Price sent by market creator ii. Fast Gas Price as per Chainlink Oracle with a deviation of 25% iii. Maximum Gas Price (currently set at 100 Gwei)
- PLOT price in ETH = Price taken from the PlotX smart contracts that are maintained with cumulative hourly price updateโ
- Gas Amount Used = Gas Amount used by the transaction to mine
- The intention of the above-mentioned formula is to return 100% of the gas fee incurred by the Market Creator in the form of $PLOT, as long as the gas price is less than 100 Gwei.
- Chainlink maintains an on-chain measure of fast gas required to mine transactions on Ethereum. Chainlink node operators update the gas price feed on-chain if there is a 25% deviation from the current gas price recorded on-chain. Hence, in such a case, the 2nd factor = 1.25 * on chain fast gas price provided by Chainlink.
- It is important to note that in order to avoid drainage of funds and unnecessary gas wars, the gas price being compensated for is subject to some limits. It is possible that a user pays 1000 gas price while the fast gas price of 60 could have been sufficient. Hence, in order to avoid similar situations that may lead to gas wars and drainage of funds, the limits of Chainlink based data at 25% deviation is put in place.
- In order to provide this incentive to the market creators, the PlotX protocol charges a fee from the market participants. This fee is taken as a percentage of the participation amount; for participations in $ETH, the fee is 0.1%, while for participations in $PLOT, the fee is 0.05%.
- Any leftover fees, apart from the incentives of Market Creators, are accrued in the DAO on-chain, and the community can decide on how to use the DAO fund via on-chain governance.
Incentive #2: Market Reward Pool Share
- For Market Creator to claim a %age of the reward pool of the created market, they need to stake $PLOT tokens for 30 days under Play Mining and then create the market.
- Based on the amount of $PLOT staked for play mining by the market creator, the share of the reward pool is computed, beginning at 0.5% and capped at 5% of the reward pool.
- The created market must accumulate a minimum liquidity equivalent to 1 ETH in PLOT and/or ETH for this incentive to be activated. This means that the combined value of PLOT and/or ETH staked in each of the three options should be greater than the value of 1 ETH.
- The %age of the reward pool the market creator ends up getting is subject to the following conditions:
- 0.5% until the staked amount by the market creator is less than or equal to 25,000 $PLOT. Hence, even if the market creator hasnโt staked any $PLOT under Play Mining, theyโll still get a 0.5% share of the reward pool of their created market.
- Increment of 0.5% with every additional 25,000 $PLOT that the market creator stakes under Play Mining.
- A maximum of 5% when the staked amount becomes equal to or greater than 225,000 $PLOT under Play Mining.
- The final %age share of the reward pool = Whichever of the following is minimum
- 5%
- 0.5% + absolute($PLOT staked in Play Mining / 25,000) * 0.5%
- The ETH and/or PLOT (as per the reward pool split) that the market creator gets from the reward pool are claimable once the market has settled.
- Incentivizing the market creator with a share of the reward pool aligns their interests towards grassroots activation for building liquidity in their markets.
Hence, the total incentive for market creation includes potentially 100% of the gas fee incurred in equivalent $PLOT (assuming the gas price is <= 100 Gwei), and an opportunity to claim up to 5% of the Reward Pool of the created market.
How to claim your rewards
Claiming the rewards you get from creating markets is very simple. Just:
- Navigate to the My Account page;
- Scroll down to the โMarket Creation Rewardsโ section;
- See stats like the number of the markets that you have created, the reward pool share you got for each of those markets, how much Gas you paid and how much of it you got back, etc.
- See the amount of PLOT and/or ETH that is pending to be claimed and click the Claim button to actually claim them.
- Approve the initiated claim transaction and youโll get the specified amount of ETH and/or PLOT in your connected wallet.
A few things to note here are: -
- Once the market creation transaction is successful, you will be able to claim your rewarded PLOT instantly by following the above-mentioned steps.
- If your created market accrues liquidity greater than or equal to the value of 1 ETH, then, you will be able to claim 0.5% to 5% of the reward pool (depending on how many PLOTs you have staked in Play Mining) once the market has settled by following the above-mentioned steps.
- The amount of ETH and/or PLOT you get as the reward pool share depends on the split between the two currencies in the reward pool. If the reward pool comprises 10 ETH and 10,000 PLOT, and you had 250,000 PLOT staked under Play Mining before creating the market, then, you will be able to claim 0.5 ETH and 500 PLOT as your reward pool share once the market settles.
What if multiple users try to create the market
It is important to note that there may come a situation where multiple users are trying to create the same market simultaneously. In such a scenario, only the user whose transaction is successful first will receive the rewards that come with creating a market.
And once any one of the transactions goes through, the market will be created and all the other transactions will automatically fail.
Hence, it is advised that the user keeps this piece of information in mind while choosing the Gas settings for their market creation transaction.
Example
Any user can create a market by signing the market creation transaction in the market creation page that becomes active right after a market ends.
When a daily market that is asking the price of BTC at 1:00 PM today ends, the market creation page for the daily market asking the price BTC at 1:00 PM tomorrow will become active. During the time this market creation page is active, any user can sign the market creation transaction to create the 1:00 PM daily market of BTC.
Letโs say that Alex signs the market creation transaction during this time and spend $25 worth of $ETH in gas cost to create the 1:00 PM daily market of BTC. Now, provided that the gas price he paid for the transaction isnโt greater than 100 Gwei, Alex will receive back $25 worth of $PLOT as soon as his transaction goes through and the market is created.
Now, assuming that Alex has 250,000 $PLOT staked in Play Mining, he will own 5% of the reward pool of the market he just created. Letโs say that post-settlement, the reward pool of this market is worth $10,000. Then, this would mean that Alex will now get $500 worth $ETH and/or $PLOT from the reward pool as an additional incentive for creating the market.
Hence, his total incentive for market creation becomes $525 ($25 equivalent in $PLOT and $500 equivalent in $PLOT and/or $ETH, based on the reward pool split).
More on PlotX Markets
PlotX offers three distinct time frames, namely 4 Hour, Daily, and Weekly. This means that for each prediction pair on the platform (eg - BTC, ETH), users can choose whether they want to predict the value of that asset on an hourly, daily, or weekly basis.
Moreover, no matter the market duration, each market goes through various stages that are common among all markets. These stages are called โMarket Cyclesโ.
There are 5 Market Cycles/Stages in total that apply to each and every market on the platform. And in order to make it easier for the users to navigate through the platform, PlotX allows its users to see each market in various stages of its lifecycle. These stages are: -
- Live
- In Settlement
- In Cooling
- In Dispute
- Settled
But, before any prediction can be placed, thereโs one thing that needs to happen first - Market Creation Transaction.