Contracts

What is LiquidityTree?

LiquidityTree is Azuro’s novel fund accounting system that tracks the balance changes of Virtual Funds across all prediction markets in real-time, block-by-block.

It forms the backbone of Azuro — facilitating open deposits and unrestricted withdrawals to/from the LP, setting capacity for each prediction market to draw or ‘book’ liquidity from the LP, etc.

What is Reinforcement?

Reinforcement is a measure of the maximum potential loss that the singleton LP can suffer from a particular prediction market. It also represents the initial liquidity base upon creation of a prediction market, set by the responsible data provider with sell-side odds push authority.

What is Virtual Fund?

Virtual Fund is a measure of virtual balances attributed to a prediction market. From the perspective of the singleton LP, the Virtual Fund balance of a prediction market corresponds to the amount of ‘booked’ liquidity that the prediction market draws upon from the LP.

What is vAMM?

Virtual AMM (vAMM) is Azuro’s self-adjusting pricing mechanism on top of pushed sell-side odds from the data provider. Similar to conventional AMMs, vAMMs will shift the onchain odds of a prediction market depending on betting flows coming from bettors.

How is protocol revenue distributed?

The protocol involves three actors when facilitating a bet: apps, LP, and the data provider.

Apps are entitled to 70% of all generated revenue serviced from their interface (subject to Spread Reward Cap). The singleton LP takes 20% of protocol revenue, while the data provider takes the remaining 10%. AzuroDAO currently does not take any protocol revenue.

Reward distribution percentages are not fixed. In the future, AzuroDAO will be able to turn on the fee switch and adjust the percentages across each protocol actor.