Market Models
PnP Protocol offers two distinct market models, each designed for different trading mechanisms and liquidity structures.P2P Markets
Peer-to-peer markets where participants trade directly with each other using the V3 Parimutuel model. See the V3 Model - Parimutuel section below for full documentation on how P2P markets work.Pythagorean Prediction Markets
Pythagorean markets use algorithmic market makers to provide liquidity and determine prices. We offer two versions:V2 Model - Liquidity Split Equally
The V2 model splits liquidity equally into YES/NO positions, creating a balanced market from the start. Required Parameters: Question* The prediction question you want to create a market for. Example: “Will Apple announce a new product category in 2025?” Expire Date & Time* Set when the market will close and be ready for settlement. Example: December 31st, 2025 at 00:00[!IMPORTANT] Minimum market deadline is 2 days for other market typesInitial Liquidity* The amount of USDC you want to provide as initial liquidity for the market. Example: 2 USDC
[!NOTE] Initial liquidity is split equally between YES and NO positions in the V2 model
V3 Model - Parimutuel
The V3 parimutuel model allows traders to choose their side and includes a maximum pot ratio mechanism. Required Parameters: Question* The prediction question you want to create a market for. Example: “Will Bitcoin reach $100,000 by the end of 2025?” Expire Date & Time* Set when the market will close and be ready for settlement. Example: December 31st, 2025 at 23:59 Choose Side Select which side of the market you want to support initially. Max Pot Ratio Define the maximum pot ratio to control the distribution of winnings. Initial Liquidity* The amount of USDC you want to provide as initial liquidity for the market.[!NOTE] In the parimutuel model, all bets go into a pool, and winners share the total pool proportionally based on their stake
Key Differences
| Feature | V2 Model | V3 Parimutuel |
|---|---|---|
| Liquidity Distribution | Split equally YES/NO | Choose side |
| Pricing Mechanism | Algorithmic market maker | Parimutuel pool |
| Max Pot Ratio | Not applicable | Configurable |
| Best For | Balanced markets | Event-based betting |
Creating Your Market
- Choose your market type (General, YouTube, Coin, Twitter, or DefiLlama)
- Select your model (V2 or V3 Parimutuel)
- Fill in the required parameters
- Provide initial liquidity in USDC
- Submit for review and wait for market to go live
[!TIP] Start with smaller liquidity amounts while you’re learning how the different models work