Understanding the new darling of prediction markets PMX (@pmx_trade) 1. What is PMX? PMX (Prediction Markets Exchange) is a decentralized prediction market platform built on the Solana blockchain. It allows users to create markets, provide liquidity, and trade on future events, featuring a transparent mechanism and fair settlement process. Originally known as PCLUE, it has transformed from a prediction market trading bot into a next-generation prediction market platform. 2. What problems does PMX solve? 1. Liquidity "trapped by the platform" Traditional prediction markets often see transactions and funds remain within the internal order book, with weak cross-protocol composability. PMX tokenizes each outcome (YES/NO) and allows free trading on Solana DEXs like Jupiter / Raydium / Orca, enabling liquidity to spill over into the entire chain ecosystem and reserving space for future combinations with DeFi components (market making, hedging, collateralization, etc.). 2. Supply side (market makers / creators) lacks sustainable incentives In traditional models, market making mainly relies on spreads and directional trading, lacking cash flow directly tied to trading volume. PMX creates a positive feedback loop of "the more active the trading, the more profitable the supply side" through a trading fee distribution (40% to LPs, 10% to market creators, 50% to the platform) + a presale mechanism (demand prior). 3. The mechanism of PMX In summary: each "event outcome" is tokenized into YES/NO that can be traded on all DEXs, using Option Wallets to anchor the combined market value of YES+NO to a preset target (based on presale tiers), and distributing trading fees proportionally to LPs and creators; settlement is done through manual adjudication + fixed amount airdrops. Core process: 1. Presale and creation: The initiator sets a target of $10k–$100k USDC; investors enter the whitelist according to their investment ratio. After selling out, the team manually reviews to decide whether to launch. 2. Providing liquidity: After LP participation, the initial principal is returned after settlement, and trading fees are shared (40% of the LP pool is distributed by share). 3. Trading and anchoring: The market starts by minting two types of SPL tokens, YES/NO; secondary market trading is free. The initial 50/50 is achieved through "supply volume"; subsequently, Option Wallets pull the combined market value of YES+NO back to the target total market value through "buy high, sell low" (e.g., single-sided $500k, double-sided $1M; or single-sided $5M, double-sided $10M). 4. Settlement distribution: Upon expiration, liquidity on both sides is withdrawn first, then manual determination of winners and losers occurs, with fixed amounts airdropped to the winning token holders (e.g., $0.001/token or $0.01/token, depending on the tier). 5. Role of the market-making wallet: Two wallets hold about 99% of the initial supply, automatically buying/selling when deviating from the target total market value, sharing the arbitrage profits with LPs while providing counterparty liquidity and smoothing volatility. Let’s talk about this market-making wallet, which is key to understanding odds changes. Essentially, it keeps the total market value of Yes and No constant, so when users buy Yes/No, the market-making wallet can sell Yes/No to keep the total market value unchanged. As long as the total market value remains unchanged, the amount of USDC airdropped to each token during settlement is guaranteed. 4. What opportunities are there? 1. PMX and Polymarket often have price discrepancies that can be arbitraged. 2. Buy PMX to bet on the prediction market track. The above are personal thoughts and do not constitute investment advice. Thanks to @fizzwickBW @Arron_finance @Caizer0x