cpmm initial commit: common logic, cloud functions

common/antes.ts

@@ -1,11 +1,50 @@
 import { Bet } from './bet'
 import { getProbability } from './calculate'
-import { Contract } from './contract'
+import { getCpmmProbability } from './calculate-cpmm'
+import { Binary, CPMM, DPM, FreeResponse, FullContract } from './contract'
 import { User } from './user'
 
 export const PHANTOM_ANTE = 0.001
 export const MINIMUM_ANTE = 10
 
+export const calcStartCpmmPool = (initialProbInt: number, ante: number) => {
+  const p = initialProbInt / 100.0
+  const invP = 1.0 / p - 1
+  const otherAnte = ante / invP
+
+  const [poolYes, poolNo] = p >= 0.5 ? [otherAnte, ante] : [ante, otherAnte]
+  const k = poolYes * poolNo
+
+  return { poolYes, poolNo, k }
+}
+
+export function getCpmmAnteBet(
+  creator: User,
+  contract: FullContract<CPMM, Binary>,
+  anteId: string,
+  amount: number,
+  outcome: 'YES' | 'NO'
+) {
+  const p = getCpmmProbability(contract.pool)
+
+  const { createdTime } = contract
+
+  const bet: Bet = {
+    id: anteId,
+    userId: creator.id,
+    contractId: contract.id,
+    amount: amount,
+    shares: amount,
+    outcome,
+    probBefore: p,
+    probAfter: p,
+    createdTime,
+    isAnte: true,
+  }
+
+  return bet
+}
+
 export const calcStartPool = (initialProbInt: number, ante = 0) => {
   const p = initialProbInt / 100.0
   const totalAnte = PHANTOM_ANTE + ante
@@ -24,7 +63,7 @@ export const calcStartPool = (initialProbInt: number, ante = 0) => {
 
 export function getAnteBets(
   creator: User,
-  contract: Contract,
+  contract: FullContract<DPM, Binary>,
   yesAnteId: string,
   noAnteId: string
 ) {
@@ -64,7 +103,7 @@ export function getAnteBets(
 
 export function getFreeAnswerAnte(
   creator: User,
-  contract: Contract,
+  contract: FullContract<DPM, FreeResponse>,
   anteBetId: string
 ) {
   const { totalBets, totalShares } = contract

common/calculate-cpmm.ts

@@ -0,0 +1,134 @@
+import * as _ from 'lodash'
+import { Bet } from './bet'
+import { Binary, CPMM, FullContract } from './contract'
+import { FEES } from './fees'
+
+export function getCpmmProbability(pool: { [outcome: string]: number }) {
+  // For binary contracts only.
+  const { YES, NO } = pool
+  return NO / (YES + NO)
+}
+
+export function getCpmmProbabilityAfterBet(
+  contract: FullContract<CPMM, Binary>,
+  outcome: string,
+  bet: number
+) {
+  const { newPool } = calculateCpmmPurchase(contract, bet, outcome)
+  return getCpmmProbability(newPool)
+}
+
+export function calculateCpmmShares(
+  pool: {
+    [outcome: string]: number
+  },
+  k: number,
+  bet: number,
+  betChoice: string
+) {
+  const { YES: y, NO: n } = pool
+  const numerator = bet ** 2 + bet * (y + n) - k + y * n
+  const denominator = betChoice === 'YES' ? bet + n : bet + y
+  const shares = numerator / denominator
+  return shares
+}
+
+export function calculateCpmmPurchase(
+  contract: FullContract<CPMM, Binary>,
+  bet: number,
+  outcome: string
+) {
+  const { pool, k } = contract
+
+  const shares = calculateCpmmShares(pool, k, bet, outcome)
+  const { YES: y, NO: n } = pool
+
+  const [newY, newN] =
+    outcome === 'YES'
+      ? [y - shares + bet, n + bet]
+      : [y + bet, n - shares + bet]
+
+  const newPool = { YES: newY, NO: newN }
+
+  return { shares, newPool }
+}
+
+export function calculateCpmmShareValue(
+  contract: FullContract<CPMM, Binary>,
+  shares: number,
+  outcome: string
+) {
+  const { pool, k } = contract
+  const { YES: y, NO: n } = pool
+
+  const poolChange = outcome === 'YES' ? shares + y - n : shares + n - y
+
+  const shareValue = 0.5 * (shares + y + n - Math.sqrt(4 * k + poolChange ** 2))
+  return shareValue
+}
+
+export function calculateCpmmSale(
+  contract: FullContract<CPMM, Binary>,
+  bet: Bet
+) {
+  const { shares, outcome } = bet
+
+  const saleValue = calculateCpmmShareValue(contract, shares, outcome)
+
+  const { pool } = contract
+  const { YES: y, NO: n } = pool
+
+  const [newY, newN] =
+    outcome === 'YES'
+      ? [y + shares - saleValue, n - saleValue]
+      : [y - saleValue, n + shares - saleValue]
+
+  const newPool = { YES: newY, NO: newN }
+
+  return { saleValue, newPool }
+}
+
+export function calculateFixedPayout(
+  contract: FullContract<CPMM, Binary>,
+  bet: Bet,
+  outcome: string
+) {
+  if (outcome === 'CANCEL') return calculateFixedCancelPayout(bet)
+  if (outcome === 'MKT') return calculateFixedMktPayout(contract, bet)
+
+  return calculateStandardFixedPayout(bet, outcome)
+}
+
+export function calculateFixedCancelPayout(bet: Bet) {
+  return bet.amount
+}
+
+export function calculateStandardFixedPayout(bet: Bet, outcome: string) {
+  const { amount, outcome: betOutcome, shares } = bet
+  if (betOutcome !== outcome) return 0
+  return deductCpmmFees(amount, shares - amount)
+}
+
+function calculateFixedMktPayout(
+  contract: FullContract<CPMM, Binary>,
+  bet: Bet
+) {
+  const { resolutionProbability, pool } = contract
+  const p =
+    resolutionProbability !== undefined
+      ? resolutionProbability
+      : getCpmmProbability(pool)
+
+  const { outcome, amount, shares } = bet
+
+  const betP = outcome === 'YES' ? p : 1 - p
+  const winnings = betP * shares
+
+  return deductCpmmFees(amount, winnings)
+}
+
+export const deductCpmmFees = (betAmount: number, winnings: number) => {
+  return winnings > betAmount
+    ? betAmount + (1 - FEES) * (winnings - betAmount)
+    : winnings
+}

common/calculate.ts

@@ -1,6 +1,6 @@
 import * as _ from 'lodash'
 import { Bet } from './bet'
-import { Contract } from './contract'
+import { Binary, DPM, FullContract } from './contract'
 import { FEES } from './fees'
 
 export function getProbability(totalShares: { [outcome: string]: number }) {
@@ -86,7 +86,7 @@ export function calculateRawShareValue(
 }
 
 export function calculateMoneyRatio(
-  contract: Contract,
+  contract: FullContract<DPM, any>,
   bet: Bet,
   shareValue: number
 ) {
@@ -112,7 +112,10 @@ export function calculateMoneyRatio(
   return actual / expected
 }
 
-export function calculateShareValue(contract: Contract, bet: Bet) {
+export function calculateShareValue(
+  contract: FullContract<DPM, any>,
+  bet: Bet
+) {
   const { pool, totalShares } = contract
   const { shares, outcome } = bet
 
@@ -124,20 +127,30 @@ export function calculateShareValue(contract: Contract, bet: Bet) {
   return adjShareValue
 }
 
-export function calculateSaleAmount(contract: Contract, bet: Bet) {
+export function calculateSaleAmount(
+  contract: FullContract<DPM, any>,
+  bet: Bet
+) {
   const { amount } = bet
   const winnings = calculateShareValue(contract, bet)
   return deductFees(amount, winnings)
 }
 
-export function calculatePayout(contract: Contract, bet: Bet, outcome: string) {
+export function calculatePayout(
+  contract: FullContract<DPM, any>,
+  bet: Bet,
+  outcome: string
+) {
   if (outcome === 'CANCEL') return calculateCancelPayout(contract, bet)
   if (outcome === 'MKT') return calculateMktPayout(contract, bet)
 
   return calculateStandardPayout(contract, bet, outcome)
 }
 
-export function calculateCancelPayout(contract: Contract, bet: Bet) {
+export function calculateCancelPayout(
+  contract: FullContract<DPM, any>,
+  bet: Bet
+) {
   const { totalBets, pool } = contract
   const betTotal = _.sum(Object.values(totalBets))
   const poolTotal = _.sum(Object.values(pool))
@@ -146,7 +159,7 @@ export function calculateCancelPayout(contract: Contract, bet: Bet) {
 }
 
 export function calculateStandardPayout(
-  contract: Contract,
+  contract: FullContract<DPM, any>,
   bet: Bet,
   outcome: string
 ) {
@@ -166,7 +179,10 @@ export function calculateStandardPayout(
   return amount + (1 - FEES) * Math.max(0, winnings - amount)
 }
 
-export function calculatePayoutAfterCorrectBet(contract: Contract, bet: Bet) {
+export function calculatePayoutAfterCorrectBet(
+  contract: FullContract<DPM, any>,
+  bet: Bet
+) {
   const { totalShares, pool, totalBets } = contract
   const { shares, amount, outcome } = bet
 
@@ -193,7 +209,7 @@ export function calculatePayoutAfterCorrectBet(contract: Contract, bet: Bet) {
   return calculateStandardPayout(newContract, bet, outcome)
 }
 
-function calculateMktPayout(contract: Contract, bet: Bet) {
+function calculateMktPayout(contract: FullContract<DPM, any>, bet: Bet) {
   if (contract.outcomeType === 'BINARY')
     return calculateBinaryMktPayout(contract, bet)
 
@@ -201,7 +217,7 @@ function calculateMktPayout(contract: Contract, bet: Bet) {
 
   const totalPool = _.sum(Object.values(pool))
   const sharesSquareSum = _.sumBy(
-    Object.values(totalShares),
+    Object.values(totalShares) as number[],
     (shares) => shares ** 2
   )
 
@@ -220,7 +236,10 @@ function calculateMktPayout(contract: Contract, bet: Bet) {
   return deductFees(amount, winnings)
 }
 
-function calculateBinaryMktPayout(contract: Contract, bet: Bet) {
+function calculateBinaryMktPayout(
+  contract: FullContract<DPM, Binary>,
+  bet: Bet
+) {
   const { resolutionProbability, totalShares, phantomShares } = contract
   const p =
     resolutionProbability !== undefined
@@ -241,7 +260,7 @@ function calculateBinaryMktPayout(contract: Contract, bet: Bet) {
   return deductFees(amount, winnings)
 }
 
-export function resolvedPayout(contract: Contract, bet: Bet) {
+export function resolvedPayout(contract: FullContract<DPM, any>, bet: Bet) {
   if (contract.resolution)
     return calculatePayout(contract, bet, contract.resolution)
   throw new Error('Contract was not resolved')

common/contract.ts

@@ -1,6 +1,9 @@
 import { Answer } from './answer'
 
-export type Contract = {
+export type FullContract<
+  M extends DPM | CPMM,
+  T extends Binary | Multi | FreeResponse
+> = {
   id: string
   slug: string // auto-generated; must be unique
 
@@ -15,16 +18,6 @@ export type Contract = {
   lowercaseTags: string[]
   visibility: 'public' | 'unlisted'
 
-  outcomeType: 'BINARY' | 'MULTI' | 'FREE_RESPONSE'
-  multiOutcomes?: string[] // Used for outcomeType 'MULTI'.
-  answers?: Answer[] // Used for outcomeType 'FREE_RESPONSE'.
-
-  mechanism: 'dpm-2'
-  phantomShares?: { [outcome: string]: number }
-  pool: { [outcome: string]: number }
-  totalShares: { [outcome: string]: number }
-  totalBets: { [outcome: string]: number }
-
   createdTime: number // Milliseconds since epoch
   lastUpdatedTime: number // If the question or description was changed
   closeTime?: number // When no more trading is allowed
@@ -32,12 +25,48 @@ export type Contract = {
   isResolved: boolean
   resolutionTime?: number // When the contract creator resolved the market
   resolution?: string
-  resolutionProbability?: number // Used for BINARY markets resolved to MKT
+
-  resolutions?: { [outcome: string]: number } // Used for outcomeType FREE_RESPONSE resolved to MKT
   closeEmailsSent?: number
 
   volume24Hours: number
   volume7Days: number
+} & M &
+  T
+
+export type Contract = FullContract<DPM | CPMM, Binary | Multi | FreeResponse>
+
+export type DPM = {
+  mechanism: 'dpm-2'
+
+  pool: { [outcome: string]: number }
+  phantomShares?: { [outcome: string]: number }
+  totalShares: { [outcome: string]: number }
+  totalBets: { [outcome: string]: number }
+}
+
+export type CPMM = {
+  mechanism: 'cpmm-1'
+
+  pool: { [outcome: string]: number }
+  k: number // liquidity constant
+  liquidity: { [userId: string]: { [outcome: string]: number } } // track liquidity providers
+}
+
+export type Binary = {
+  outcomeType: 'BINARY'
+  resolutionProbability?: number // Used for BINARY markets resolved to MKT
+}
+
+export type Multi = {
+  outcomeType: 'MULTI'
+  multiOutcomes: string[] // Used for outcomeType 'MULTI'.
+  resolutions?: { [outcome: string]: number } // Used for PROB
+}
+
+export type FreeResponse = {
+  outcomeType: 'FREE_RESPONSE'
+  answers: Answer[] // Used for outcomeType 'FREE_RESPONSE'.
+  resolutions?: { [outcome: string]: number } // Used for PROB
 }
 
 export type outcomeType = 'BINARY' | 'MULTI' | 'FREE_RESPONSE'

common/new-bet.ts

@@ -4,14 +4,60 @@ import {
   getProbability,
   getOutcomeProbability,
 } from './calculate'
-import { Contract } from './contract'
+import { calculateCpmmShares, getCpmmProbability } from './calculate-cpmm'
+import {
+  Binary,
+  CPMM,
+  DPM,
+  FreeResponse,
+  FullContract,
+  Multi,
+} from './contract'
 import { User } from './user'
 
-export const getNewBinaryBetInfo = (
+export const getNewBinaryCpmmBetInfo = (
   user: User,
   outcome: 'YES' | 'NO',
   amount: number,
-  contract: Contract,
+  contract: FullContract<CPMM, Binary>,
+  newBetId: string
+) => {
+  const { pool, k } = contract
+
+  const shares = calculateCpmmShares(pool, k, amount, outcome)
+  const { YES: y, NO: n } = pool
+
+  const [newY, newN] =
+    outcome === 'YES'
+      ? [y - shares + amount, amount]
+      : [amount, n - shares + amount]
+
+  const newBalance = user.balance - amount
+
+  const probBefore = getCpmmProbability(pool)
+  const newPool = { YES: newY, NO: newN }
+  const probAfter = getCpmmProbability(newPool)
+
+  const newBet: Bet = {
+    id: newBetId,
+    userId: user.id,
+    contractId: contract.id,
+    amount,
+    shares,
+    outcome,
+    probBefore,
+    probAfter,
+    createdTime: Date.now(),
+  }
+
+  return { newBet, newPool, newBalance }
+}
+
+export const getNewBinaryDpmBetInfo = (
+  user: User,
+  outcome: 'YES' | 'NO',
+  amount: number,
+  contract: FullContract<DPM, Binary>,
   newBetId: string
 ) => {
   const { YES: yesPool, NO: noPool } = contract.pool
@@ -61,7 +107,7 @@ export const getNewMultiBetInfo = (
   user: User,
   outcome: string,
   amount: number,
-  contract: Contract,
+  contract: FullContract<DPM, Multi | FreeResponse>,
   newBetId: string
 ) => {
   const { pool, totalShares, totalBets } = contract

common/new-contract.ts

@@ -1,5 +1,12 @@
-import { calcStartPool } from './antes'
+import { calcStartPool, calcStartCpmmPool } from './antes'
-import { Contract, outcomeType } from './contract'
+import {
+  Binary,
+  Contract,
+  CPMM,
+  DPM,
+  FreeResponse,
+  outcomeType,
+} from './contract'
 import { User } from './user'
 import { parseTags } from './util/parse'
 import { removeUndefinedProps } from './util/object'
@@ -23,13 +30,12 @@ export function getNewContract(
 
   const propsByOutcomeType =
     outcomeType === 'BINARY'
-      ? getBinaryProps(initialProb, ante)
+      ? getBinaryCpmmProps(initialProb, ante, creator.id) // getBinaryDpmProps(initialProb, ante)
       : getFreeAnswerProps(ante)
 
-  const contract: Contract = removeUndefinedProps({
+  const contract = removeUndefinedProps({
     id,
     slug,
-    mechanism: 'dpm-2',
     outcomeType,
     ...propsByOutcomeType,
 
@@ -52,28 +58,55 @@ export function getNewContract(
     volume7Days: 0,
   })
 
-  return contract
+  return contract as Contract
 }
 
-const getBinaryProps = (initialProb: number, ante: number) => {
+const getBinaryDpmProps = (initialProb: number, ante: number) => {
   const { sharesYes, sharesNo, poolYes, poolNo, phantomYes, phantomNo } =
     calcStartPool(initialProb, ante)
 
-  return {
+  const system: DPM & Binary = {
+    mechanism: 'dpm-2',
+    outcomeType: 'BINARY',
     phantomShares: { YES: phantomYes, NO: phantomNo },
     pool: { YES: poolYes, NO: poolNo },
     totalShares: { YES: sharesYes, NO: sharesNo },
     totalBets: { YES: poolYes, NO: poolNo },
   }
+
+  return system
+}
+
+const getBinaryCpmmProps = (
+  initialProb: number,
+  ante: number,
+  userId: string
+) => {
+  const { poolYes, poolNo, k } = calcStartCpmmPool(initialProb, ante)
+  const pool = { YES: poolYes, NO: poolNo }
+
+  const system: CPMM & Binary = {
+    mechanism: 'cpmm-1',
+    outcomeType: 'BINARY',
+    pool: pool,
+    k,
+    liquidity: { [userId]: pool },
+  }
+
+  return system
 }
 
 const getFreeAnswerProps = (ante: number) => {
-  return {
+  const system: DPM & FreeResponse = {
+    mechanism: 'dpm-2',
+    outcomeType: 'FREE_RESPONSE',
     pool: { '0': ante },
     totalShares: { '0': ante },
     totalBets: { '0': ante },
     answers: [],
   }
+
+  return system
 }
 
 const getMultiProps = (

common/payouts.ts

@@ -2,10 +2,21 @@ import * as _ from 'lodash'
 
 import { Bet } from './bet'
 import { deductFees, getProbability } from './calculate'
-import { Contract } from './contract'
+import {
+  Binary,
+  Contract,
+  CPMM,
+  DPM,
+  FreeResponse,
+  FullContract,
+  Multi,
+} from './contract'
 import { CREATOR_FEE, FEES } from './fees'
 
-export const getCancelPayouts = (contract: Contract, bets: Bet[]) => {
+export const getDpmCancelPayouts = (
+  contract: FullContract<DPM, any>,
+  bets: Bet[]
+) => {
   const { pool } = contract
   const poolTotal = _.sum(Object.values(pool))
   console.log('resolved N/A, pool M$', poolTotal)
@@ -18,9 +29,59 @@ export const getCancelPayouts = (contract: Contract, bets: Bet[]) => {
   }))
 }
 
+export const getFixedCancelPayouts = (bets: Bet[]) => {
+  return bets.map((bet) => ({
+    userId: bet.userId,
+    payout: bet.amount,
+  }))
+}
+
+export const getStandardFixedPayouts = (
+  outcome: string,
+  contract: FullContract<CPMM, Binary>,
+  bets: Bet[]
+) => {
+  const winningBets = bets.filter((bet) => bet.outcome === outcome)
+
+  const payouts = winningBets.map(({ userId, amount, shares }) => {
+    const winnings = shares
+    const profit = winnings - amount
+
+    const payout = amount + (1 - FEES) * profit
+    return { userId, profit, payout }
+  })
+
+  const profits = _.sumBy(payouts, (po) => Math.max(0, po.profit))
+  const creatorPayout = CREATOR_FEE * profits
+
+  console.log(
+    'resolved',
+    outcome,
+    'pool',
+    contract.pool,
+    'profits',
+    profits,
+    'creator fee',
+    creatorPayout
+  )
+
+  return payouts
+    .map(({ userId, payout }) => ({ userId, payout }))
+    .concat([{ userId: contract.creatorId, payout: creatorPayout }]) // add creator fee
+    .concat(getLiquidityPoolPayouts(contract, outcome))
+}
+
+export const getLiquidityPoolPayouts = (
+  contract: FullContract<CPMM, Binary>,
+  outcome: string
+) => {
+  const { creatorId, pool } = contract
+  return [{ userId: creatorId, payout: pool[outcome] }]
+}
+
 export const getStandardPayouts = (
   outcome: string,
-  contract: Contract,
+  contract: FullContract<DPM, any>,
   bets: Bet[]
 ) => {
   const winningBets = bets.filter((bet) => bet.outcome === outcome)
@@ -57,7 +118,7 @@ export const getStandardPayouts = (
 }
 
 export const getMktPayouts = (
-  contract: Contract,
+  contract: FullContract<DPM, any>,
   bets: Bet[],
   resolutionProbability?: number
 ) => {
@@ -99,12 +160,71 @@ export const getMktPayouts = (
     .concat([{ userId: contract.creatorId, payout: creatorPayout }]) // add creator fee
 }
 
+export const getMktFixedPayouts = (
+  contract: FullContract<CPMM, Binary>,
+  bets: Bet[],
+  resolutionProbability?: number
+) => {
+  const p =
+    resolutionProbability === undefined
+      ? getProbability(contract.pool)
+      : resolutionProbability
+
+  const payouts = bets.map(({ userId, outcome, amount, shares }) => {
+    const betP = outcome === 'YES' ? p : 1 - p
+    const winnings = betP * shares
+    const profit = winnings - amount
+    const payout = deductFees(amount, winnings)
+    return { userId, profit, payout }
+  })
+
+  const profits = _.sumBy(payouts, (po) => Math.max(0, po.profit))
+  const creatorPayout = CREATOR_FEE * profits
+
+  console.log(
+    'resolved MKT',
+    p,
+    'pool',
+    contract.pool,
+    'profits',
+    profits,
+    'creator fee',
+    creatorPayout
+  )
+
+  return payouts
+    .map(({ userId, payout }) => ({ userId, payout }))
+    .concat([{ userId: contract.creatorId, payout: creatorPayout }]) // add creator fee
+    .concat(getLiquidityPoolProbPayouts(contract, p))
+}
+
+export const getLiquidityPoolProbPayouts = (
+  contract: FullContract<CPMM, Binary>,
+  p: number
+) => {
+  const { creatorId, pool } = contract
+  const payout = p * pool.YES + (1 - p) * pool.NO
+  return [{ userId: creatorId, payout }]
+}
+
 export const getPayouts = (
   outcome: string,
   contract: Contract,
   bets: Bet[],
   resolutionProbability?: number
 ) => {
+  if (contract.mechanism === 'cpmm-1') {
+    switch (outcome) {
+      case 'YES':
+      case 'NO':
+        return getStandardFixedPayouts(outcome, contract as any, bets)
+      case 'MKT':
+        return getMktFixedPayouts(contract as any, bets, resolutionProbability)
+      case 'CANCEL':
+        return getFixedCancelPayouts(bets)
+    }
+  }
+
   switch (outcome) {
     case 'YES':
     case 'NO':
@@ -112,7 +232,7 @@ export const getPayouts = (
     case 'MKT':
       return getMktPayouts(contract, bets, resolutionProbability)
     case 'CANCEL':
-      return getCancelPayouts(contract, bets)
+      return getDpmCancelPayouts(contract, bets)
     default:
       // Multi outcome.
       return getStandardPayouts(outcome, contract, bets)
@@ -121,7 +241,7 @@ export const getPayouts = (
 
 export const getPayoutsMultiOutcome = (
   resolutions: { [outcome: string]: number },
-  contract: Contract,
+  contract: FullContract<DPM, Multi | FreeResponse>,
   bets: Bet[]
 ) => {
   const poolTotal = _.sum(Object.values(contract.pool))

common/scoring.ts

@@ -1,6 +1,6 @@
 import * as _ from 'lodash'
 import { Bet } from './bet'
-import { Contract } from './contract'
+import { Binary, Contract, FullContract } from './contract'
 import { getPayouts } from './payouts'
 
 export function scoreCreators(contracts: Contract[], bets: Bet[][]) {
@@ -23,7 +23,10 @@ export function scoreTraders(contracts: Contract[], bets: Bet[][]) {
   return userScores
 }
 
-export function scoreUsersByContract(contract: Contract, bets: Bet[]) {
+export function scoreUsersByContract(
+  contract: FullContract<any, Binary>,
+  bets: Bet[]
+) {
   const { resolution, resolutionProbability } = contract
 
   const [closedBets, openBets] = _.partition(

common/sell-bet.ts

@@ -1,13 +1,18 @@
 import { Bet } from './bet'
 import { calculateShareValue, deductFees, getProbability } from './calculate'
-import { Contract } from './contract'
+import {
+  calculateCpmmSale,
+  calculateCpmmShareValue,
+  getCpmmProbability,
+} from './calculate-cpmm'
+import { Binary, DPM, CPMM, FullContract } from './contract'
 import { CREATOR_FEE } from './fees'
 import { User } from './user'
 
 export const getSellBetInfo = (
   user: User,
   bet: Bet,
-  contract: Contract,
+  contract: FullContract<DPM, any>,
   newBetId: string
 ) => {
   const { pool, totalShares, totalBets } = contract
@@ -68,3 +73,57 @@ export const getSellBetInfo = (
     creatorFee,
   }
 }
+
+export const getCpmmSellBetInfo = (
+  user: User,
+  bet: Bet,
+  contract: FullContract<CPMM, Binary>,
+  newBetId: string
+) => {
+  const { pool } = contract
+  const { id: betId, amount, shares, outcome } = bet
+
+  const { saleValue, newPool } = calculateCpmmSale(contract, bet)
+
+  const probBefore = getCpmmProbability(pool)
+  const probAfter = getCpmmProbability(newPool)
+
+  const profit = saleValue - amount
+  const creatorFee = CREATOR_FEE * Math.max(0, profit)
+  const saleAmount = deductFees(amount, profit)
+
+  console.log(
+    'SELL M$',
+    amount,
+    outcome,
+    'for M$',
+    saleAmount,
+    'creator fee: M$',
+    creatorFee
+  )
+
+  const newBet: Bet = {
+    id: newBetId,
+    userId: user.id,
+    contractId: contract.id,
+    amount: -saleValue,
+    shares: -shares,
+    outcome,
+    probBefore,
+    probAfter,
+    createdTime: Date.now(),
+    sale: {
+      amount: saleAmount,
+      betId,
+    },
+  }
+
+  const newBalance = user.balance + saleAmount
+
+  return {
+    newBet,
+    newPool,
+    newBalance,
+    creatorFee,
+  }
+}

functions/src/create-contract.ts

@@ -2,12 +2,21 @@ import * as functions from 'firebase-functions'
 import * as admin from 'firebase-admin'
 
 import { chargeUser, getUser } from './utils'
-import { Contract, outcomeType } from '../../common/contract'
+import {
+  Binary,
+  Contract,
+  CPMM,
+  DPM,
+  FreeResponse,
+  FullContract,
+  outcomeType,
+} from '../../common/contract'
 import { slugify } from '../../common/util/slugify'
 import { randomString } from '../../common/util/random'
 import { getNewContract } from '../../common/new-contract'
 import {
   getAnteBets,
+  getCpmmAnteBet,
   getFreeAnswerAnte,
   MINIMUM_ANTE,
 } from '../../common/antes'
@@ -89,7 +98,7 @@ export const createContract = functions
       await contractRef.create(contract)
 
       if (ante) {
-        if (outcomeType === 'BINARY') {
+        if (outcomeType === 'BINARY' && contract.mechanism === 'dpm-2') {
           const yesBetDoc = firestore
             .collection(`contracts/${contract.id}/bets`)
             .doc()
@@ -100,23 +109,51 @@ export const createContract = functions
 
           const { yesBet, noBet } = getAnteBets(
             creator,
-            contract,
+            contract as FullContract<DPM, Binary>,
             yesBetDoc.id,
             noBetDoc.id
           )
+
           await yesBetDoc.set(yesBet)
           await noBetDoc.set(noBet)
+        } else if (outcomeType === 'BINARY') {
+          const { YES: y, NO: n } = contract.pool
+          const anteBet = Math.abs(y - n)
+
+          if (anteBet) {
+            const betDoc = firestore
+              .collection(`contracts/${contract.id}/bets`)
+              .doc()
+
+            const outcome = y > n ? 'NO' : 'YES' // more in YES pool if prob leans NO
+
+            const bet = await getCpmmAnteBet(
+              creator,
+              contract as FullContract<CPMM, Binary>,
+              betDoc.id,
+              anteBet,
+              outcome
+            )
+
+            await betDoc.set(bet)
+          }
         } else if (outcomeType === 'FREE_RESPONSE') {
           const noneAnswerDoc = firestore
             .collection(`contracts/${contract.id}/answers`)
             .doc('0')
+
           const noneAnswer = getNoneAnswer(contract.id, creator)
           await noneAnswerDoc.set(noneAnswer)
 
           const anteBetDoc = firestore
             .collection(`contracts/${contract.id}/bets`)
             .doc()
-          const anteBet = getFreeAnswerAnte(creator, contract, anteBetDoc.id)
+
+          const anteBet = getFreeAnswerAnte(
+            creator,
+            contract as FullContract<DPM, FreeResponse>,
+            anteBetDoc.id
+          )
           await anteBetDoc.set(anteBet)
         }
       }

functions/src/place-bet.ts

@@ -3,7 +3,12 @@ import * as admin from 'firebase-admin'
 
 import { Contract } from '../../common/contract'
 import { User } from '../../common/user'
-import { getNewBinaryBetInfo, getNewMultiBetInfo } from '../../common/new-bet'
+import {
+  getNewBinaryCpmmBetInfo,
+  getNewBinaryDpmBetInfo,
+  getNewMultiBetInfo,
+} from '../../common/new-bet'
+import { removeUndefinedProps } from '../../common/util/object'
 
 export const placeBet = functions.runWith({ minInstances: 1 }).https.onCall(
   async (
@@ -42,7 +47,7 @@ export const placeBet = functions.runWith({ minInstances: 1 }).https.onCall(
         return { status: 'error', message: 'Invalid contract' }
       const contract = contractSnap.data() as Contract
 
-      const { closeTime, outcomeType } = contract
+      const { closeTime, outcomeType, mechanism } = contract
       if (closeTime && Date.now() > closeTime)
         return { status: 'error', message: 'Trading is closed' }
 
@@ -60,21 +65,40 @@ export const placeBet = functions.runWith({ minInstances: 1 }).https.onCall(
 
       const { newBet, newPool, newTotalShares, newTotalBets, newBalance } =
         outcomeType === 'BINARY'
-          ? getNewBinaryBetInfo(
+          ? mechanism === 'dpm-2'
+            ? getNewBinaryDpmBetInfo(
                 user,
                 outcome as 'YES' | 'NO',
                 amount,
                 contract,
                 newBetDoc.id
               )
-          : getNewMultiBetInfo(user, outcome, amount, contract, newBetDoc.id)
+            : (getNewBinaryCpmmBetInfo(
+                user,
+                outcome as 'YES' | 'NO',
+                amount,
+                contract,
+                newBetDoc.id
+              ) as any)
+          : getNewMultiBetInfo(
+              user,
+              outcome,
+              amount,
+              contract as any,
+              newBetDoc.id
+            )
 
       transaction.create(newBetDoc, newBet)
-      transaction.update(contractDoc, {
+
+      transaction.update(
+        contractDoc,
+        removeUndefinedProps({
           pool: newPool,
           totalShares: newTotalShares,
           totalBets: newTotalBets,
         })
+      )
+
       transaction.update(userDoc, { balance: newBalance })
 
       return { status: 'success', betId: newBetDoc.id }

functions/src/resolve-market.ts

@@ -89,7 +89,7 @@ export const resolveMarket = functions
 
       const payouts =
         outcomeType === 'FREE_RESPONSE' && resolutions
-          ? getPayoutsMultiOutcome(resolutions, contract, openBets)
+          ? getPayoutsMultiOutcome(resolutions, contract as any, openBets)
           : getPayouts(outcome, contract, openBets, resolutionProbability)
 
       console.log('payouts:', payouts)

functions/src/sell-bet.ts

@@ -4,7 +4,8 @@ import * as functions from 'firebase-functions'
 import { Contract } from '../../common/contract'
 import { User } from '../../common/user'
 import { Bet } from '../../common/bet'
-import { getSellBetInfo } from '../../common/sell-bet'
+import { getCpmmSellBetInfo, getSellBetInfo } from '../../common/sell-bet'
+import { removeUndefinedProps } from '../../common/util/object'
 
 export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
   async (
@@ -33,7 +34,7 @@ export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
         return { status: 'error', message: 'Invalid contract' }
       const contract = contractSnap.data() as Contract
 
-      const { closeTime } = contract
+      const { closeTime, mechanism } = contract
       if (closeTime && Date.now() > closeTime)
         return { status: 'error', message: 'Trading is closed' }
 
@@ -55,7 +56,15 @@ export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
         newTotalBets,
         newBalance,
         creatorFee,
-      } = getSellBetInfo(user, bet, contract, newBetDoc.id)
+      } =
+        mechanism === 'dpm-2'
+          ? getSellBetInfo(user, bet, contract, newBetDoc.id)
+          : (getCpmmSellBetInfo(
+              user,
+              bet,
+              contract as any,
+              newBetDoc.id
+            ) as any)
 
       if (contract.creatorId === userId) {
         transaction.update(userDoc, { balance: newBalance + creatorFee })
@@ -74,11 +83,14 @@ export const sellBet = functions.runWith({ minInstances: 1 }).https.onCall(
 
       transaction.update(betDoc, { isSold: true })
       transaction.create(newBetDoc, newBet)
-      transaction.update(contractDoc, {
+      transaction.update(
+        contractDoc,
+        removeUndefinedProps({
           pool: newPool,
           totalShares: newTotalShares,
           totalBets: newTotalBets,
         })
+      )
 
       return { status: 'success' }
     })