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How Are Prices Calculated?

Overview

YC365 employs a sophisticated pricing mechanism that combines Automated Market Maker (AMM) technology with real-time order book dynamics to ensure fair, efficient, and transparent price discovery across our global, multi-language prediction markets.

YC365 Pricing Architecture

🏗️ System Architecture Foundation

Smart Contract Integration:

  • LP Contract Set: Manages independent liquidity pools for each condition's YES/NO tokens
  • Trading Contract Set: Executes price-based buy/sell transactions
  • Order Trading Model: Provides order book management and matching engine
  • Vault Contract Set: Handles asset management and fee collection

Multi-Component Price Discovery:

  • Automated Market Maker: Provides continuous liquidity and base pricing
  • Order Book System: Enables limit order trading and price improvement
  • Real-time Settlement: Instant price updates via smart contracts on BSC
  • Cross-Language Consistency: Uniform pricing across all 6 supported languages

Primary Pricing Mechanisms

📊 Current Implementation: Order Book Model

Market Price Calculation:

Based on YC365's technical architecture, the current pricing model uses:

Market Price = Lowest Ask Price (Seller's Minimum Price)

Price Discovery Process:

  1. Limit Orders: Users place buy/sell orders at specific prices
  2. Order Matching: Matching engine processes orders by price-time priority
  3. Price Setting: Current market price = lowest available sell order
  4. Real-time Updates: Prices update instantly with each trade

Example Pricing:

Order Book State:
Sell Orders: 0.65, 0.67, 0.70 USDT (YES tokens)
Buy Orders: 0.60, 0.58, 0.55 USDT (YES tokens)

Current Market Price: 0.65 USDT (lowest sell order)
Bid-Ask Spread: 0.65 - 0.60 = 0.05 USDT

🔄 Future Enhancement: Comprehensive Model

Advanced Price Calculation (Planned):

Market Price = Weighted Average of:
- Transaction Prices (40%)
- Trading Volume (25%)
- Buyer Bid Prices (20%)
- Market Depth (15%)

Enhanced Features:

  • Volume-Weighted Average Price (VWAP): Historical trading volume consideration
  • Bid-Ask Spread Optimization: Tighter spreads through improved liquidity
  • Cross-Market Arbitrage: Price consistency across related markets
  • Volatility Adjustment: Price stability mechanisms

Role-Based Price Management

👥 Asset Administrator Functions

Liquidity Management:

  • Initial Liquidity: Set initial YES/NO token ratios and pricing
  • Liquidity Monitoring: Track order book depth and trading activity
  • Liquidity Adjustment: Add or recover liquidity to maintain market efficiency
  • Price Stability: Ensure stable and fair pricing conditions

Market Operations:

  • Price Verification: Monitor pricing accuracy and fairness
  • Arbitrage Prevention: Detect and prevent price manipulation
  • Performance Analytics: Analyze market performance and pricing efficiency
  • Fee Optimization: Manage trading fees (0.15%) and gas cost optimization

🛠️ Technical Price Infrastructure

Order Book Management (Order Trading Model):

  • Limit Order Support: Currently supports limit orders only (TPS < 100)
  • Price-Time Priority: Orders matched by price first, then by time
  • Real-time Processing: Immediate order processing and price updates
  • Order Validation: Pre-matching order verification and integrity checks

Settlement Service Integration:

  • Off-chain Calculation: Price calculations performed off-chain for efficiency
  • On-chain Execution: Price changes executed on BSC blockchain
  • Batch Processing: Efficient bulk transaction processing
  • Gas Optimization: Optimized gas usage for BSC transactions

Price Update Mechanisms

⚡ Real-Time Price Updates

Update Triggers:

  • New Trades: Every buy/sell transaction execution
  • Order Book Changes: New orders, cancellations, modifications
  • Liquidity Events: Liquidity additions or removals by Asset Administrators
  • External Events: News or information affecting market sentiment

Update Process:

  1. Transaction Execution: Trade executed via Trading Contract Set
  2. Price Calculation: New market price calculated by Order Trading Model
  3. Smart Contract Update: Price stored on-chain via LP Contract Set
  4. UI Updates: Real-time price display across all language interfaces
  5. API Distribution: Price data distributed to all connected services

Performance Characteristics:

  • BSC Speed: 3-second block times for near-instant confirmation
  • Low Latency: Minimal delays in price propagation
  • High Throughput: Support for high-frequency trading
  • Reliability: 99.9%+ uptime for pricing services

🌐 Multi-Language Price Display

Global Price Consistency:

  • Uniform Pricing: Identical prices across all language interfaces
  • Currency Formatting: Local number formatting (e.g., 0.65 vs 0,65)
  • Time Zone Adjustment: Local time stamps for price history
  • Cultural Adaptation: Region-appropriate price presentation

Localization Features:

  • Number Formats: Adapt to local number formatting conventions
  • Currency Symbols: Display USDT appropriately for each region
  • Chart Styling: Cultural preferences for chart colors and styles
  • Mobile Optimization: Responsive pricing displays for all devices

Advanced Price Features

📈 Price Impact and Slippage

Slippage Calculation:

Slippage = |Expected Price - Actual Execution Price| / Expected Price × 100%

Factors Affecting Price Impact:

  • Order Size: Larger orders create more price impact
  • Liquidity Depth: Deeper order books reduce slippage
  • Market Volatility: High volatility increases price unpredictability
  • Time of Trade: Market hours vs. off-hours liquidity differences

Impact Examples:

Small Trade (100 USDT): 0.1-0.5% slippage
Medium Trade (1,000 USDT): 0.5-2% slippage
Large Trade (10,000 USDT): 2-5% slippage

🛡️ Price Protection Mechanisms

Anti-Manipulation Safeguards:

  • Circuit Breakers: Temporary trading halts for extreme price movements
  • Price Bands: Maximum price movement limits per time period
  • Volume Monitoring: Detect unusual trading volume patterns
  • Order Size Limits: Maximum order size restrictions

Monitoring Systems:

  • Real-time Surveillance: AI-powered price monitoring
  • Anomaly Detection: Identify suspicious pricing patterns
  • Alert Systems: Automatic alerts for price irregularities
  • Manual Oversight: Asset Administrator monitoring and intervention

Fee Structure and Price Impact

💰 Trading Fee Integration

Current Fee Structure:

  • Platform Fee: 0.15% (1.5/1000) of transaction amount
  • Fee Application: Applied to both buy and sell transactions
  • Fee Collection: Automatic deduction via Trading Contract Set
  • Gas Fees: BSC network fees (typically 0.005-0.02 USDT equivalent)

Fee Calculation Example:

Trade: Buy 1,000 YES tokens at 0.60 USDT each
Trade Value: 1,000 × 0.60 = 600 USDT
Platform Fee: 600 × 0.0015 = 0.90 USDT
Gas Fee: ~0.01 USDT (BSC network fee)
Total Cost: 600 + 0.90 + 0.01 = 600.91 USDT

Fee Transparency:

  • Pre-Trade Display: Fees shown before transaction confirmation
  • Receipt Details: Complete fee breakdown in transaction receipts
  • Multi-Language: Fee information in user's preferred language
  • Real-time Updates: Current gas fees displayed dynamically

Price Analytics and Historical Data

📊 Data Collection and Analysis

DApp Backend Service Integration:

  • Graph Services: Market price trend visualization with multiple time intervals
  • Data Collection: 10-minute API data collection from Order Trading Model
  • Chart Generation: 30-minute, 1-hour, 1-day, 1-week statistical analysis
  • Performance Tracking: Comprehensive price performance analysis

Analytics Features:

  • Price History: Complete historical price data storage
  • Volume Analysis: Trading volume correlation with price movements
  • Volatility Metrics: Price stability and volatility measurements
  • Trend Analysis: Statistical trend identification and pattern recognition

📱 User Interface and Accessibility

Price Display Features:

  • Real-time Charts: Live price charts with various time frames
  • Order Book Depth: Visual representation of buy/sell order depth
  • Price Impact Calculator: Estimate price impact before trading
  • Portfolio Tracking: Personal position value and P&L calculations

Multi-Language Support:

  • Localized Interfaces: Price interfaces in all 6 supported languages
  • Cultural Adaptation: Chart styles and colors appropriate for each culture
  • Mobile Optimization: Responsive design for mobile price monitoring
  • Accessibility: WCAG compliance for price information accessibility

Price Transparency and Verification

🔍 Blockchain Transparency

On-Chain Price Data:

  • Public Verification: All price changes recorded on BSC blockchain
  • Smart Contract Transparency: Open-source pricing logic
  • Transaction History: Complete trade and price history on-chain
  • Audit Trail: Immutable record of all pricing decisions

External Verification:

  • API Endpoints: Public APIs for price data verification
  • Third-party Integration: Integration with price tracking services
  • Oracle Integration: Cross-reference with external price oracles
  • Community Monitoring: User verification of pricing accuracy

📋 Price Resolution and Settlement

Final Price Determination:

  • Market Resolution: Final prices set to 0 or 1 USDT based on outcomes
  • Settlement Process: Automatic settlement via smart contracts
  • Payout Calculation: Final payout = (Token Holdings) × (Final Price)
  • Fee Settlement: Platform fees distributed according to revenue model

Resolution Example:

Market: "Will Bitcoin reach $100,000 by Dec 31, 2024?"
Your Position: 500 YES tokens purchased at average price 0.45 USDT
Outcome: YES (Bitcoin reaches $100,000)
Final Price: 1.00 USDT
Payout: 500 × 1.00 = 500 USDT
Profit: 500 - (500 × 0.45) - fees = 275 USDT - fees

Future Enhancements

🚀 Advanced Pricing Models

Planned Technical Improvements:

  • Dynamic AMM: Adaptive liquidity curves based on market conditions
  • Cross-Market Pricing: Correlation-based pricing across related markets
  • AI-Enhanced Pricing: Machine learning for price prediction and optimization
  • Multi-Asset Integration: Complex pricing for multi-outcome markets

Performance Upgrades:

  • Increased TPS: Higher transaction throughput (target: 500+ TPS)
  • Layer 2 Integration: L2 solutions for faster, cheaper transactions
  • Advanced Order Types: Market orders, stop-loss, and conditional orders
  • Risk Management: Automated risk assessment and position sizing tools

🌍 Global Expansion Features

Enhanced Localization:

  • Additional Languages: Japanese, Korean, Hindi, Arabic support
  • Regional Price Customization: Local market hour adjustments
  • Cultural Price Display: Region-specific price presentation preferences
  • Advanced Mobile Features: Enhanced mobile price monitoring tools

YC365's pricing mechanism ensures fair, transparent, and efficient price discovery through our advanced order book system and smart contract integration. Our commitment to real-time updates, multi-language accessibility, and blockchain transparency provides users worldwide with reliable and accurate pricing information.

Through continuous innovation and system optimization, we maintain pricing excellence while expanding our global reach and improving user experience across all supported languages and regions.