An Automated Market Maker (AMM) is a smart contract that provides liquidity and determines asset prices algorithmically. It replaces the traditional order book model used by exchanges and bookmakers with on-chain liquidity pools.
Every market on AGON, from /markets/sports to /markets/crypto, is powered by an AMM. Unlike traditional sportsbooks like Stake or BC.Game that rely on internal bookmakers to set and adjust odds, our AMM calculates odds based purely on the ratio of capital in the pool.
This means the price for a "YES" or "NO" outcome is a direct, transparent reflection of market sentiment. All trades are executed against the AMM contract on Base, with settlement in USDC. There is no opaque, off-chain book. The code is the house.
Most AMMs use a constant function formula. The simplest and most common is the Constant Product Market Maker (CPMM) formula: x * y = k.
x = amount of Token A (e.g., YES tokens)y = amount of Token B (e.g., NO tokens)k = a constant total liquidity valueWhen a trader buys YES tokens, the supply of YES (x) in the pool decreases. To keep k constant, the supply of NO (y) must increase, which algorithmically raises the price of YES for the next trade. This mechanism is what moves the odds on AGON. For any serious degen, understanding this is key to anticipating price impact and slippage on large trades.
yes-no-token · cpmm · orderbook · clob
Trading prediction markets involves risk. Not financial advice.