Skip to main contentMarket 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 types
Initial 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
