Mkt resolution: new standard resolution (pay back bets first) (#15)

* new standard resolution; contract.totalBets; MKT resolution

* recalculate script

* Fix one bug and change script name

Co-authored-by: jahooma <jahooma@gmail.com>

functions/src/place-bet.ts

@@ -43,18 +43,14 @@ export const placeBet = functions.runWith({ minInstances: 1 }).https.onCall(
         .collection(`contracts/${contractId}/bets`)
         .doc()
 
-      const { newBet, newPool, newTotalShares, newBalance } = getNewBetInfo(
+      const { newBet, newPool, newTotalShares, newTotalBets, newBalance } =
-        user,
+        getNewBetInfo(user, outcome, amount, contract, newBetDoc.id)
-        outcome,
-        amount,
-        contract,
-        newBetDoc.id
-      )
 
       transaction.create(newBetDoc, newBet)
       transaction.update(contractDoc, {
         pool: newPool,
         totalShares: newTotalShares,
+        totalBets: newTotalBets,
       })
       transaction.update(userDoc, { balance: newBalance })
 
@@ -91,6 +87,13 @@ const getNewBetInfo = (
       ? { YES: yesShares + shares, NO: noShares }
       : { YES: yesShares, NO: noShares + shares }
 
+  const { YES: yesBets, NO: noBets } = contract.totalBets
+
+  const newTotalBets =
+    outcome === 'YES'
+      ? { YES: yesBets + amount, NO: noBets }
+      : { YES: yesBets, NO: noBets + amount }
+
   const probBefore = yesPool ** 2 / (yesPool ** 2 + noPool ** 2)
   const probAfter = newPool.YES ** 2 / (newPool.YES ** 2 + newPool.NO ** 2)
 
@@ -108,5 +111,5 @@ const getNewBetInfo = (
 
   const newBalance = user.balance - amount
 
-  return { newBet, newPool, newTotalShares, newBalance }
+  return { newBet, newPool, newTotalShares, newTotalBets, newBalance }
 }

functions/src/resolve-market.ts

@@ -55,12 +55,19 @@ export const resolveMarket = functions
       const betsSnap = await firestore
         .collection(`contracts/${contractId}/bets`)
         .get()
+
       const bets = betsSnap.docs.map((doc) => doc.data() as Bet)
+      const openBets = bets.filter((b) => !b.isSold && !b.sale)
+
+      const startPool = contract.startPool.YES + contract.startPool.NO
+      const truePool = contract.pool.YES + contract.pool.NO - startPool
 
       const payouts =
         outcome === 'CANCEL'
-          ? getCancelPayouts(contract, bets)
+          ? getCancelPayouts(truePool, openBets)
-          : getPayouts(outcome, contract, bets)
+          : outcome === 'MKT'
+          ? getMktPayouts(truePool, contract, openBets)
+          : getStandardPayouts(outcome, truePool, contract, openBets)
 
       console.log('payouts:', payouts)
 
@@ -96,42 +103,51 @@ export const resolveMarket = functions
 
 const firestore = admin.firestore()
 
-const getCancelPayouts = (contract: Contract, bets: Bet[]) => {
+const getCancelPayouts = (truePool: number, bets: Bet[]) => {
-  const startPool = contract.startPool.YES + contract.startPool.NO
+  console.log('resolved N/A, pool M$', truePool)
-  const truePool = contract.pool.YES + contract.pool.NO - startPool
 
-  const openBets = bets.filter((b) => !b.isSold && !b.sale)
+  const betSum = _.sumBy(bets, (b) => b.amount)
 
-  const betSum = _.sumBy(openBets, (b) => b.amount)
+  return bets.map((bet) => ({
-
-  return openBets.map((bet) => ({
     userId: bet.userId,
     payout: (bet.amount / betSum) * truePool,
   }))
 }
 
-const getPayouts = (outcome: string, contract: Contract, bets: Bet[]) => {
+const getStandardPayouts = (
-  const openBets = bets.filter((b) => !b.isSold && !b.sale)
+  outcome: string,
-  const [yesBets, noBets] = _.partition(
+  truePool: number,
-    openBets,
+  contract: Contract,
-    (bet) => bet.outcome === 'YES'
+  bets: Bet[]
+) => {
+  const [yesBets, noBets] = _.partition(bets, (bet) => bet.outcome === 'YES')
+  const winningBets = outcome === 'YES' ? yesBets : noBets
+
+  const betSum = _.sumBy(winningBets, (b) => b.amount)
+
+  if (betSum >= truePool) return getCancelPayouts(truePool, winningBets)
+
+  const creatorPayout = CREATOR_FEE * truePool
+  console.log(
+    'resolved',
+    outcome,
+    'pool: M$',
+    truePool,
+    'creator fee: M$',
+    creatorPayout
   )
 
-  const startPool = contract.startPool.YES + contract.startPool.NO
+  const shareDifferenceSum = _.sumBy(winningBets, (b) => b.shares - b.amount)
-  const truePool = contract.pool.YES + contract.pool.NO - startPool
 
-  const [totalShares, winningBets] =
+  const winningsPool = truePool - betSum
-    outcome === 'YES'
+  const fees = PLATFORM_FEE + CREATOR_FEE
-      ? [contract.totalShares.YES, yesBets]
-      : [contract.totalShares.NO, noBets]
-
-  const finalPool = (1 - PLATFORM_FEE - CREATOR_FEE) * truePool
-  const creatorPayout = CREATOR_FEE * truePool
-  console.log('final pool:', finalPool, 'creator fee:', creatorPayout)
 
   const winnerPayouts = winningBets.map((bet) => ({
     userId: bet.userId,
-    payout: (bet.shares / totalShares) * finalPool,
+    payout:
+      (1 - fees) *
+      (bet.amount +
+        ((bet.shares - bet.amount) / shareDifferenceSum) * winningsPool),
   }))
 
   return winnerPayouts.concat([
@@ -139,6 +155,17 @@ const getPayouts = (outcome: string, contract: Contract, bets: Bet[]) => {
   ]) // add creator fee
 }
 
+const getMktPayouts = (truePool: number, contract: Contract, bets: Bet[]) => {
+  const p =
+    contract.pool.YES ** 2 / (contract.pool.YES ** 2 + contract.pool.NO ** 2)
+  console.log('Resolved MKT at p=', p)
+
+  return [
+    ...getStandardPayouts('YES', p * truePool, contract, bets),
+    ...getStandardPayouts('NO', (1 - p) * truePool, contract, bets),
+  ]
+}
+
 const payUser = ([userId, payout]: [string, number]) => {
   return firestore.runTransaction(async (transaction) => {
     const userDoc = firestore.doc(`users/${userId}`)

functions/src/scripts/recalculate-contract-totals.ts

@@ -0,0 +1,62 @@
+import * as admin from 'firebase-admin'
+import * as _ from 'lodash'
+import { Bet } from '../types/bet'
+import { Contract } from '../types/contract'
+
+type DocRef = admin.firestore.DocumentReference
+
+// Generate your own private key, and set the path below:
+// https://console.firebase.google.com/u/0/project/mantic-markets/settings/serviceaccounts/adminsdk
+const serviceAccount = require('../../../../Downloads/dev-mantic-markets-firebase-adminsdk-sir5m-b2d27f8970.json')
+
+admin.initializeApp({
+  credential: admin.credential.cert(serviceAccount),
+})
+const firestore = admin.firestore()
+
+async function recalculateContract(contractRef: DocRef, contract: Contract) {
+  const bets = await contractRef
+    .collection('bets')
+    .get()
+    .then((snap) => snap.docs.map((bet) => bet.data() as Bet))
+
+  const openBets = bets.filter((b) => !b.isSold && !b.sale)
+
+  const totalShares = {
+    YES: _.sumBy(openBets, (bet) => (bet.outcome === 'YES' ? bet.shares : 0)),
+    NO: _.sumBy(openBets, (bet) => (bet.outcome === 'NO' ? bet.shares : 0)),
+  }
+
+  const totalBets = {
+    YES: _.sumBy(openBets, (bet) => (bet.outcome === 'YES' ? bet.amount : 0)),
+    NO: _.sumBy(openBets, (bet) => (bet.outcome === 'NO' ? bet.amount : 0)),
+  }
+
+  await contractRef.update({ totalShares, totalBets })
+
+  console.log(
+    'calculating totals for "',
+    contract.question,
+    '" total bets:',
+    totalBets
+  )
+  console.log()
+}
+
+async function recalculateContractTotals() {
+  console.log('Recalculating contract info')
+
+  const snapshot = await firestore.collection('contracts').get()
+  const contracts = snapshot.docs.map((doc) => doc.data() as Contract)
+
+  console.log('Loaded', contracts.length, 'contracts')
+
+  for (const contract of contracts) {
+    const contractRef = firestore.doc(`contracts/${contract.id}`)
+
+    await recalculateContract(contractRef, contract)
+  }
+}
+
+if (require.main === module)
+  recalculateContractTotals().then(() => process.exit())

functions/src/sell-bet.ts

@@ -44,8 +44,14 @@ export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
         .collection(`contracts/${contractId}/bets`)
         .doc()
 
-      const { newBet, newPool, newTotalShares, newBalance, creatorFee } =
+      const {
-        getSellBetInfo(user, bet, contract, newBetDoc.id)
+        newBet,
+        newPool,
+        newTotalShares,
+        newTotalBets,
+        newBalance,
+        creatorFee,
+      } = getSellBetInfo(user, bet, contract, newBetDoc.id)
 
       const creatorDoc = firestore.doc(`users/${contract.creatorId}`)
       const creatorSnap = await transaction.get(creatorDoc)
@@ -60,6 +66,7 @@ export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
       transaction.update(contractDoc, {
         pool: newPool,
         totalShares: newTotalShares,
+        totalBets: newTotalBets,
       })
       transaction.update(userDoc, { balance: newBalance })
 
@@ -81,6 +88,7 @@ const getSellBetInfo = (
   const { YES: yesPool, NO: noPool } = contract.pool
   const { YES: yesStart, NO: noStart } = contract.startPool
   const { YES: yesShares, NO: noShares } = contract.totalShares
+  const { YES: yesBets, NO: noBets } = contract.totalBets
 
   const [y, n, s] = [yesPool, noPool, shares]
 
@@ -123,6 +131,11 @@ const getSellBetInfo = (
       ? { YES: yesShares - shares, NO: noShares }
       : { YES: yesShares, NO: noShares - shares }
 
+  const newTotalBets =
+    outcome === 'YES'
+      ? { YES: yesBets - amount, NO: noBets }
+      : { YES: yesBets, NO: noBets - amount }
+
   const probAfter = newPool.YES ** 2 / (newPool.YES ** 2 + newPool.NO ** 2)
 
   const creatorFee = CREATOR_FEE * adjShareValue
@@ -158,5 +171,12 @@ const getSellBetInfo = (
 
   const newBalance = user.balance + saleAmount
 
-  return { newBet, newPool, newTotalShares, newBalance, creatorFee }
+  return {
+    newBet,
+    newPool,
+    newTotalShares,
+    newTotalBets,
+    newBalance,
+    creatorFee,
+  }
 }

functions/src/types/contract.ts

@@ -13,6 +13,7 @@ export type Contract = {
   startPool: { YES: number; NO: number }
   pool: { YES: number; NO: number }
   totalShares: { YES: number; NO: number }
+  totalBets: { YES: number; NO: number }
 
   createdTime: number // Milliseconds since epoch
   lastUpdatedTime: number // If the question or description was changed

web/lib/calculate.ts

@@ -44,14 +44,20 @@ export function calculatePayout(
   if (outcome === 'CANCEL') return amount
   if (betOutcome !== outcome) return 0
 
-  const { totalShares } = contract
+  const { totalShares, totalBets } = contract
 
   if (totalShares[outcome] === 0) return 0
 
   const startPool = contract.startPool.YES + contract.startPool.NO
-  const pool = contract.pool.YES + contract.pool.NO - startPool
+  const truePool = contract.pool.YES + contract.pool.NO - startPool
 
-  return (1 - fees) * (shares / totalShares[outcome]) * pool
+  if (totalBets[outcome] >= truePool)
+    return (amount / totalBets[outcome]) * truePool
+
+  const total = totalShares[outcome] - totalBets[outcome]
+  const winningsPool = truePool - totalBets[outcome]
+
+  return (1 - fees) * (amount + ((shares - amount) / total) * winningsPool)
 }
 
 export function resolvedPayout(contract: Contract, bet: Bet) {

web/lib/firebase/contracts.ts

@@ -31,6 +31,7 @@ export type Contract = {
   startPool: { YES: number; NO: number }
   pool: { YES: number; NO: number }
   totalShares: { YES: number; NO: number }
+  totalBets: { YES: number; NO: number }
 
   createdTime: number // Milliseconds since epoch
   lastUpdatedTime: number // If the question or description was changed

web/lib/service/create-contract.ts

@@ -38,6 +38,7 @@ export async function createContract(
     startPool: { YES: startYes, NO: startNo },
     pool: { YES: startYes, NO: startNo },
     totalShares: { YES: 0, NO: 0 },
+    totalBets: { YES: 0, NO: 0 },
     isResolved: false,
 
     // TODO: Set create time to Firestore timestamp