initial commit

common/antes.ts

@@ -1,19 +1,14 @@
 export const PHANTOM_ANTE = 200
 
-export const calcStartPool = (initialProbInt: number, ante?: number) => {
+export const calcStartPool = (initialProbInt: number, ante = 0) => {
   const p = initialProbInt / 100.0
-  const totalAnte = PHANTOM_ANTE + (ante || 0)
+  const totalAnte = PHANTOM_ANTE + ante
 
-  const poolYes =
+  const sharesYes = Math.sqrt(p * totalAnte ** 2)
-    p === 0.5
+  const sharesNo = Math.sqrt(totalAnte ** 2 - sharesYes ** 2)
-      ? p * totalAnte
-      : -(totalAnte * (-p + Math.sqrt((-1 + p) * -p))) / (-1 + 2 * p)
 
-  const poolNo = totalAnte - poolYes
+  const poolYes = p * ante
+  const poolNo = (1 - p) * ante
 
-  const f = PHANTOM_ANTE / totalAnte
+  return { sharesYes, sharesNo, poolYes, poolNo }
-  const startYes = f * poolYes
-  const startNo = f * poolNo
-
-  return { startYes, startNo, poolYes, poolNo }
 }

common/calculate.ts

@@ -2,37 +2,80 @@ import { Bet } from './bet'
 import { Contract } from './contract'
 import { FEES } from './fees'
 
-export const blah = () => 999
+export function getProbability(totalShares: { YES: number; NO: number }) {
-
+  const { YES: y, NO: n } = totalShares
-export const getProbability = (pool: { YES: number; NO: number }) => {
+  return y ** 2 / (y ** 2 + n ** 2)
-  const [yesPool, noPool] = [pool.YES, pool.NO]
-  const numerator = Math.pow(yesPool, 2)
-  const denominator = Math.pow(yesPool, 2) + Math.pow(noPool, 2)
-  return numerator / denominator
 }
 
 export function getProbabilityAfterBet(
-  pool: { YES: number; NO: number },
+  totalShares: { YES: number; NO: number },
   outcome: 'YES' | 'NO',
   bet: number
 ) {
-  const [YES, NO] = [
+  const shares = calculateShares(totalShares, bet, outcome)
-    pool.YES + (outcome === 'YES' ? bet : 0),
+
-    pool.NO + (outcome === 'NO' ? bet : 0),
+  const [YES, NO] =
-  ]
+    outcome === 'YES'
+      ? [totalShares.YES + shares, totalShares.NO]
+      : [totalShares.YES, totalShares.NO + shares]
+
   return getProbability({ YES, NO })
 }
 
 export function calculateShares(
-  pool: { YES: number; NO: number },
+  totalShares: { YES: number; NO: number },
   bet: number,
   betChoice: 'YES' | 'NO'
 ) {
-  const [yesPool, noPool] = [pool.YES, pool.NO]
+  const [yesShares, noShares] = [totalShares.YES, totalShares.NO]
+
+  const c = 2 * bet * Math.sqrt(yesShares ** 2 + noShares ** 2)
 
   return betChoice === 'YES'
-    ? bet + (bet * noPool ** 2) / (yesPool ** 2 + bet * yesPool)
+    ? Math.sqrt(bet ** 2 + yesShares ** 2 + c) - yesShares
-    : bet + (bet * yesPool ** 2) / (noPool ** 2 + bet * noPool)
+    : Math.sqrt(bet ** 2 + noShares ** 2 + c) - noShares
+}
+
+export function calculateRawShareValue(
+  totalShares: { YES: number; NO: number },
+  shares: number,
+  betChoice: 'YES' | 'NO'
+) {
+  const [yesShares, noShares] = [totalShares.YES, totalShares.NO]
+  const currentValue = Math.sqrt(yesShares ** 2 + noShares ** 2)
+
+  const postSaleValue =
+    betChoice === 'YES'
+      ? Math.sqrt(Math.max(0, yesShares - shares) ** 2 + noShares ** 2)
+      : Math.sqrt(yesShares ** 2 + Math.max(0, noShares - shares) ** 2)
+
+  return currentValue - postSaleValue
+}
+
+export function calculateMoneyRatio(contract: Contract) {
+  const { totalShares, pool } = contract
+  const [yesShares, noShares] = [totalShares.YES, totalShares.NO]
+
+  const actual = pool.YES + pool.NO
+  const expected = Math.sqrt(yesShares ** 2 + noShares ** 2)
+  return actual / expected
+}
+
+export function calculateShareValue(contract: Contract, bet: Bet) {
+  const shareValue = calculateRawShareValue(
+    contract.totalShares,
+    bet.shares,
+    bet.outcome
+  )
+  const f = calculateMoneyRatio(contract)
+
+  const myPool = contract.pool[bet.outcome]
+  const adjShareValue = Math.min(Math.min(1, f) * shareValue, myPool)
+  return adjShareValue
+}
+
+export function calculateSaleAmount(contract: Contract, bet: Bet) {
+  return (1 - FEES) * calculateShareValue(contract, bet)
 }
 
 export function calculatePayout(
@@ -40,19 +83,31 @@ export function calculatePayout(
   bet: Bet,
   outcome: 'YES' | 'NO' | 'CANCEL' | 'MKT'
 ) {
-  const { amount, outcome: betOutcome, shares } = bet
+  if (outcome === 'CANCEL') return calculateCancelPayout(contract, bet)
-
-  if (outcome === 'CANCEL') return amount
   if (outcome === 'MKT') return calculateMktPayout(contract, bet)
 
+  return calculateStandardPayout(contract, bet, outcome)
+}
+
+export function calculateCancelPayout(contract: Contract, bet: Bet) {
+  const totalBets = contract.totalBets.YES + contract.totalBets.NO
+  const pool = contract.pool.YES + contract.pool.NO
+
+  return (bet.amount / totalBets) * pool
+}
+
+export function calculateStandardPayout(
+  contract: Contract,
+  bet: Bet,
+  outcome: 'YES' | 'NO'
+) {
+  const { amount, outcome: betOutcome, shares } = bet
   if (betOutcome !== outcome) return 0
 
   const { totalShares, totalBets } = contract
-
   if (totalShares[outcome] === 0) return 0
 
-  const startPool = contract.startPool.YES + contract.startPool.NO
+  const truePool = contract.pool.YES + contract.pool.NO
-  const truePool = contract.pool.YES + contract.pool.NO - startPool
 
   if (totalBets[outcome] >= truePool)
     return (amount / totalBets[outcome]) * truePool
@@ -64,22 +119,7 @@ export function calculatePayout(
 }
 
 export function calculatePayoutAfterCorrectBet(contract: Contract, bet: Bet) {
-  const { amount, outcome, shares } = bet
+  return calculateStandardPayout(contract, bet, bet.outcome)
-  const { totalShares, totalBets } = contract
-
-  const startPool = contract.startPool.YES + contract.startPool.NO
-  const truePool = amount + contract.pool.YES + contract.pool.NO - startPool
-
-  const totalBetsOutcome = totalBets[outcome] + amount
-  const totalSharesOutcome = totalShares[outcome] + shares
-
-  if (totalBetsOutcome >= truePool)
-    return (amount / totalBetsOutcome) * truePool
-
-  const total = totalSharesOutcome - totalBetsOutcome
-  const winningsPool = truePool - totalBetsOutcome
-
-  return (1 - FEES) * (amount + ((shares - amount) / total) * winningsPool)
 }
 
 function calculateMktPayout(contract: Contract, bet: Bet) {
@@ -88,8 +128,7 @@ function calculateMktPayout(contract: Contract, bet: Bet) {
   const weightedTotal =
     p * contract.totalBets.YES + (1 - p) * contract.totalBets.NO
 
-  const startPool = contract.startPool.YES + contract.startPool.NO
+  const truePool = contract.pool.YES + contract.pool.NO
-  const truePool = contract.pool.YES + contract.pool.NO - startPool
 
   const betP = bet.outcome === 'YES' ? p : 1 - p
 
@@ -123,44 +162,3 @@ export function currentValue(contract: Contract, bet: Bet) {
 
   return prob * yesPayout + (1 - prob) * noPayout
 }
-
-export function calculateSaleAmount(contract: Contract, bet: Bet) {
-  const { shares, outcome } = bet
-
-  const { YES: yesPool, NO: noPool } = contract.pool
-  const { YES: yesStart, NO: noStart } = contract.startPool
-  const { YES: yesShares, NO: noShares } = contract.totalShares
-
-  const [y, n, s] = [yesPool, noPool, shares]
-
-  const shareValue =
-    outcome === 'YES'
-      ? // https://www.wolframalpha.com/input/?i=b+%2B+%28b+n%5E2%29%2F%28y+%28-b+%2B+y%29%29+%3D+c+solve+b
-        (n ** 2 +
-          s * y +
-          y ** 2 -
-          Math.sqrt(
-            n ** 4 + (s - y) ** 2 * y ** 2 + 2 * n ** 2 * y * (s + y)
-          )) /
-        (2 * y)
-      : (y ** 2 +
-          s * n +
-          n ** 2 -
-          Math.sqrt(
-            y ** 4 + (s - n) ** 2 * n ** 2 + 2 * y ** 2 * n * (s + n)
-          )) /
-        (2 * n)
-
-  const startPool = yesStart + noStart
-  const pool = yesPool + noPool - startPool
-
-  const probBefore = yesPool ** 2 / (yesPool ** 2 + noPool ** 2)
-  const f = pool / (probBefore * yesShares + (1 - probBefore) * noShares)
-
-  const myPool = outcome === 'YES' ? yesPool - yesStart : noPool - noStart
-
-  const adjShareValue = Math.min(Math.min(1, f) * shareValue, myPool)
-
-  const saleAmount = (1 - FEES) * adjShareValue
-  return saleAmount
-}

common/new-bet.ts

@@ -1,4 +1,5 @@
 import { Bet } from './bet'
+import { calculateShares, getProbability } from './calculate'
 import { Contract } from './contract'
 import { User } from './user'
 
@@ -16,10 +17,7 @@ export const getNewBetInfo = (
       ? { YES: yesPool + amount, NO: noPool }
       : { YES: yesPool, NO: noPool + amount }
 
-  const shares =
+  const shares = calculateShares(contract.totalShares, amount, outcome)
-    outcome === 'YES'
-      ? amount + (amount * noPool ** 2) / (yesPool ** 2 + amount * yesPool)
-      : amount + (amount * yesPool ** 2) / (noPool ** 2 + amount * noPool)
 
   const { YES: yesShares, NO: noShares } = contract.totalShares
 
@@ -35,8 +33,8 @@ export const getNewBetInfo = (
       ? { YES: yesBets + amount, NO: noBets }
       : { YES: yesBets, NO: noBets + amount }
 
-  const probBefore = yesPool ** 2 / (yesPool ** 2 + noPool ** 2)
+  const probBefore = getProbability(contract.totalShares)
-  const probAfter = newPool.YES ** 2 / (newPool.YES ** 2 + newPool.NO ** 2)
+  const probAfter = getProbability(newTotalShares)
 
   const newBet: Bet = {
     id: newBetId,

common/new-contract.ts

@@ -12,7 +12,7 @@ export function getNewContract(
   ante?: number,
   closeTime?: number
 ) {
-  const { startYes, startNo, poolYes, poolNo } = calcStartPool(
+  const { sharesYes, sharesNo, poolYes, poolNo } = calcStartPool(
     initialProb,
     ante
   )
@@ -29,10 +29,10 @@ export function getNewContract(
     question: question.trim(),
     description: description.trim(),
 
-    startPool: { YES: startYes, NO: startNo },
+    startPool: { YES: poolYes, NO: poolNo },
     pool: { YES: poolYes, NO: poolNo },
-    totalShares: { YES: 0, NO: 0 },
+    totalShares: { YES: sharesYes, NO: sharesNo },
-    totalBets: { YES: 0, NO: 0 },
+    totalBets: { YES: poolYes, NO: poolNo },
     isResolved: false,
 
     createdTime: Date.now(),
@@ -46,3 +46,5 @@ export function getNewContract(
 
   return contract
 }
+
+function getAnteBets() {}

common/payouts.ts

@@ -1,4 +1,5 @@
 import { Bet } from './bet'
+import { getProbability } from './calculate'
 import { Contract } from './contract'
 import { CREATOR_FEE, FEES } from './fees'
 
@@ -58,8 +59,7 @@ export const getMktPayouts = (
   contract: Contract,
   bets: Bet[]
 ) => {
-  const p =
+  const p = getProbability(contract.totalShares)
-    contract.pool.YES ** 2 / (contract.pool.YES ** 2 + contract.pool.NO ** 2)
   console.log('Resolved MKT at p=', p, 'pool: $M', truePool)
 
   const [yesBets, noBets] = partition(bets, (bet) => bet.outcome === 'YES')

common/sell-bet.ts

@@ -1,6 +1,7 @@
 import { Bet } from './bet'
+import { calculateShareValue, getProbability } from './calculate'
 import { Contract } from './contract'
-import { CREATOR_FEE, PLATFORM_FEE } from './fees'
+import { CREATOR_FEE, FEES } from './fees'
 import { User } from './user'
 
 export const getSellBetInfo = (
@@ -12,40 +13,10 @@ export const getSellBetInfo = (
   const { id: betId, amount, shares, outcome } = bet
 
   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]
+  const adjShareValue = calculateShareValue(contract, bet)
-
-  const shareValue =
-    outcome === 'YES'
-      ? // https://www.wolframalpha.com/input/?i=b+%2B+%28b+n%5E2%29%2F%28y+%28-b+%2B+y%29%29+%3D+c+solve+b
-        (n ** 2 +
-          s * y +
-          y ** 2 -
-          Math.sqrt(
-            n ** 4 + (s - y) ** 2 * y ** 2 + 2 * n ** 2 * y * (s + y)
-          )) /
-        (2 * y)
-      : (y ** 2 +
-          s * n +
-          n ** 2 -
-          Math.sqrt(
-            y ** 4 + (s - n) ** 2 * n ** 2 + 2 * y ** 2 * n * (s + n)
-          )) /
-        (2 * n)
-
-  const startPool = yesStart + noStart
-  const pool = yesPool + noPool - startPool
-
-  const probBefore = yesPool ** 2 / (yesPool ** 2 + noPool ** 2)
-
-  const f = pool / (probBefore * yesShares + (1 - probBefore) * noShares)
-
-  const myPool = outcome === 'YES' ? yesPool - yesStart : noPool - noStart
-
-  const adjShareValue = Math.min(Math.min(1, f) * shareValue, myPool)
 
   const newPool =
     outcome === 'YES'
@@ -62,10 +33,11 @@ export const getSellBetInfo = (
       ? { YES: yesBets - amount, NO: noBets }
       : { YES: yesBets, NO: noBets - amount }
 
-  const probAfter = newPool.YES ** 2 / (newPool.YES ** 2 + newPool.NO ** 2)
+  const probBefore = getProbability(contract.totalShares)
+  const probAfter = getProbability(newTotalShares)
 
   const creatorFee = CREATOR_FEE * adjShareValue
-  const saleAmount = (1 - CREATOR_FEE - PLATFORM_FEE) * adjShareValue
+  const saleAmount = (1 - FEES) * adjShareValue
 
   console.log(
     'SELL M$',
@@ -73,8 +45,6 @@ export const getSellBetInfo = (
     outcome,
     'for M$',
     saleAmount,
-    'M$/share:',
-    f,
     'creator fee: M$',
     creatorFee
   )

functions/src/resolve-market.ts

@@ -61,8 +61,7 @@ export const resolveMarket = functions
       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
-      const truePool = contract.pool.YES + contract.pool.NO - startPool
 
       const payouts =
         outcome === 'CANCEL'

web/components/bet-panel.tsx

@@ -94,7 +94,7 @@ export function BetPanel(props: { contract: Contract; className?: string }) {
 
   const initialProb = getProbability(contract.pool)
   const resultProb = getProbabilityAfterBet(
-    contract.pool,
+    contract.totalShares,
     betChoice,
     betAmount ?? 0
   )