Walk through a prediction market with 2–4 players. Pick Advanced (LMSR) or Basic (Parimutuel), trade or pass, then resolve the outcome and see who won.
Advanced Markets — LMSR
LMSR markets use a liquidity-weighted formula to set prices dynamically. As people buy YES, the YES price rises — reflecting the crowd's growing conviction.
Each contract pays 100 μ if your side wins, 0 μ if it loses.
Buy multiple contracts — more contracts means higher cost and higher payout.
Prices move: early buyers pay less than late buyers.
The market price always reflects the implied probability (e.g. 65 μ ≈ 65% chance YES).
Cost = b × ln(e^((qYes+x)/b) + e^(qNo/b)) − b × ln(e^(qYes/b) + e^(qNo/b))
This simulator uses b = 10 so price shifts are clearly visible with just 2–4 players. The real WePredict platform uses b ≥ 100, so large crowds move prices gradually.
Basic Markets — Parimutuel
All stakes go into a shared pool. When the market resolves, the entire pool is split among winners proportional to their bets. You can also Pass to skip without betting.
Payout = (your bet ÷ total winning pool) × total pool
No dynamic prices — payout depends on final pool composition.
Fewer people on the winning side = higher individual payout.
If nobody bets on the winning side, all bets are refunded.
LMSR vs Parimutuel
LMSR: Early movers get cheaper prices. Contrarians can profit most if the consensus is wrong.
Parimutuel: Simple pool split. Being on the minority winning side pays the most.
Starting Conditions
Each player starts with 1,000 μ. Contract face value is 100 μ — the same as the real platform.