Skip to content
FatTail Markets

How It Works

Market lifecycle

Every market on FatTail follows this lifecycle:

1. Market creation

An admin or authorized user creates a market with:

  • A question (e.g., “Will BTC exceed $200K by March 2026?”)
  • An expiration date
  • Resolution criteria and oracle type
  • Initial probability skew (must be 90:10+)

2. Trading

Users buy shares on either side:

  • Yes shares — betting the event will happen
  • No shares — betting the event won’t happen

Prices are determined by the LS-LMSR automated market maker. As more capital enters one side, prices adjust accordingly.

3. Vig collection

Every trade generates a vigorish (vig) — a small spread that funds:

  • 50% to the platform
  • 50% distributed to yield seekers (dominant side holders, pro-rata)

4. Resolution

When the market closes, one of three oracle types determines the outcome:

  • Admin — platform operator resolves
  • Price Feed — automated from CoinGecko price data
  • Optimistic Oracle — community-driven propose/challenge/vote

5. Settlement

Winning shares pay out. Losing shares expire worthless. Settlement is on-chain on Solana.

Safety Guard

FatTail’s Safety Guard monitors probability drift. If prices move into the 11-89% range, a warning is displayed. This is informational only — trades are never blocked.