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?

The vAMM (Virtual AMM) 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, and may be subject to further changes if deemed necessary by AzuroDAO.