Market Payouts

Explains how winnings are distributed in standard markets, where correct outcomes receive both their initial stake back and a share of the losing pools.

Upon market resolution, the pools of money invested in other outcomes are distributed to the investors in the correct outcome. The portion each user is owed is determined by the number of shares they own. Shares increase in price along the bonding curve of the outcome, meaning earlier purchases in an outcome are cheaper per share than later purchases.

Users’ initial investment in the correct outcome is refunded to ensure they don’t lose money. The remaining pools for each outcome are distributed pro rata based on share ownership.

Ex: Three users have invested in the correct outcome. Their investments and share ownership are:

User 1: Invested 1 SOL, received 10000 shares

User 2: Invested 1 SOL, received 5000 shares

User 3: Invested 2 SOL, received 5000 shares

They will receive their initial investments back and are owed their share of all other pools in the market. The payout for each user, assuming the pool of investment from all other outcomes is 8 SOL, is:

User 1: 1 SOL + 8 SOL * (10000 / 20000) = 5 SOL

User 2: 1 SOL + 8 SOL * (5000 / 20000) = 3 SOL

User 3: 2 SOL + 8 SOL * (5000 / 20000) = 4 SOL