# Dynamic Market Pricing (AMM)

#### **Overview**

DarkBet uses a **Fixed Product Market Maker (FPMM)** model to ensure fair and dynamic pricing for every market. This mechanism continuously adjusts prices based on the ratio of liquidity between **YES** and **NO** outcomes, creating a self-balancing system that reflects real market sentiment.

#### How Prices Work

* Prices are determined by the **pool balance ratios** of YES and NO shares.
* The combined price of both outcomes remains constant:\
  **YES price + NO price = 0.01 BNB** (fixed total market price).
* When more users bet on one side, the price of that outcome increases while the opposite side decreases.
* Every trade slightly shifts the market, ensuring real-time price discovery.

#### Betting Options

**1. Market Price (Default)**\
Buy shares instantly at the current market rate. This is the fastest and simplest way to participate in a prediction.

**2. Custom Amount**\
Enter any BNB amount to receive shares based on the current market price.\
Real-time quotes are displayed and remain valid for 30 seconds before refreshing.\
The formula used is:\
**Shares = Amount Paid ÷ Current Price**

**Example**\
If YES is trading at **0.006 BNB** and you bet **0.01 BNB**:

* YES Price: 0.006 BNB
* Your Bet: 0.01 BNB
* Shares Received: 0.01 ÷ 0.006 = **\~1.67 shares**\
  If the YES outcome wins, your payout will be **1.67 × 0.01 = 0.0167 BNB**.

#### Market Dynamics

* **Bullish Market (More YES Bets)**\
  More liquidity flows into YES, increasing its price and lowering NO — signaling positive sentiment.
* **Bearish Market (More NO Bets)**\
  More liquidity flows into NO, increasing its price and lowering YES — reflecting negative sentiment.
* **Balanced Market**\
  Equal liquidity on both sides stabilizes prices around **0.005 BNB** each.

#### Advantages of AMM Pricing

* **Fair and Algorithmic** — Prices are set purely by supply and demand.
* **Continuous Liquidity** — Every participant contributes to market depth.
* **Resistant to Manipulation** — Algorithmic balancing prevents manual price distortion.
* **Transparent and Predictable** — All calculations are verifiable on-chain.
* **Efficient Price Discovery** — Market sentiment adjusts dynamically with each trade.


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