Zeitgeist Unveils Blockchain's First LMSR-Based Market Maker with dynamic liquidity for Prediction Markets (DLMSR)
At Zeitgeist, we're not just following the trends — we're creating them. It's with great excitement that we announce our latest breakthrough: the release of a LMSR (Logarithmic Market Scoring Rule) based automated market maker (AMM) on our blockchain for prediction markets. This is a milestone not only for us but for the entire prediction market space, as we bring a model to the blockchain that has never been executed before.
As pioneers in this domain, we're driven by the relentless pursuit of innovation. Our LMSR-based market maker is not just a new feature; it's a revolution in the way prediction markets operate on the blockchain.
Why the DLMSR Model Is a Game-Changer on Zeitgeist
- First of Its Kind: We've successfully deployed the first blockchain-based prediction market platform with dynamic liquidity utilizing the LMSR model. This brings unrivaled flexibility to our platform for market creators and liquidity providers. Providing liquidity is much cheaper with the new AMM and market creators can worry less about their accuracy when setting the initial probabilities to their questions.
- Drastic Slippage Reduction: Transitioning from the CPMM (Constant Product Market Maker) model to LMSR has significantly decreased slippage. This is especially beneficial for trades at a higher percentage, making outcomes above 65% vastly more profitable. Traders can confidently enter larger positions, even in markets that are heavily skewed, while exposing themselves to less risk by circumventing the issues of the CPMM model with slippage.
The Impact of DLMSR on Trading By implementing the DLMSR model, trades on the Zeitgeist platform have become more efficient and profitable, especially for larger trades. This is a leap forward for traders who've been seeking more stability and predictability in their transactions. In the image below you can see price impact
A Step Forward for On-Chain Prediction Markets
Zeitgeist's DLMSR is a pivotal advancement for on-chain prediction markets. By introducing this model, we are not just evolving our platform but are also redefining the landscape of prediction markets. This development signifies a remarkable blend of blockchain's robustness with the dynamic nature of prediction markets, leading to an ecosystem that is more secure, transparent, and efficient. The integration of the DLMSR model transforms market dynamics, enabling a more fluid and responsive trading experience that caters to a diverse range of market participants.
Furthermore, Zeitgeist is more than just a trading platform; Zeitgeist is a protocol for prediction market applications. The introduction of our innovative market-making algorithm marks a significant step in enabling broader and more versatile uses of our technology. While this new AMM will first be showcased on the Zeitgeist application: https://app.zeitgeist.pm, the technology that powers it is available to any prediction market platform that wishes to use the Zeitgeist protocol.
Our commitment to innovation is unwavering. As we continue to explore new horizons and enhance user experiences, Zeitgeist remains dedicated to setting new benchmarks in the prediction market industry. We are constantly seeking ways to refine our technology and maintain our position at the forefront of prediction market solutions, ensuring that our platform remains a key player in shaping the future of decentralized forecasting.
Acknowledging Our Forerunners: A special shout out to Gnosis for designing a constant function version of LMSR on which our design is based.
Our Invitation to You Embrace the forefront of prediction market technology and experience the difference with our new DLMSR AMM. Visit Zeitgeist App and try out the future of decentralized forecasting.