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1 sat \ 1 reply \ @ek OP 27 Aug \ parent \ on: Non-custodial prediction markets on Ark? bitcoin
Like would they exit the Ark but still be locked into the DLC on-chain somehow?

Yes! Unilateral exit means you broadcast the chain of presigned transactions, so your VTXO turns into a UTXO, but spending this UTXO still requires the correct unlock script. In the case of a 2-party DLC, there would be three ways to unlock it: one for each winner with the correct attestation, and a delayed refund for both. This means the Ark operator as the market operator is still part of the DLC, just onchain now instead of in a VTXO.

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101 sats \ 0 replies \ @HYPERBITCOINZATION 28 Aug

Fascinating, that's really cool.

If you have a way to solve the liquidity problem, so that the volume is not constrained by how much liquidity the AMM has available, then Ark-based DLCs could work for an LMSR type AMM.

I wonder if it's possible to reuse liquidity across mutually exclusive outcomes. For example, outcome A and outcome B are mutually exclusive, and any traders that bet on outcome A, their payouts need to be committed beforehand to that DLC.

If it's possible to re-use the liquidity that's committed to the A outcome CET to the B outcome CET, then the volume of the prediction market is not constrained by the liquidity available in the AMM (besides the subsidy committed beforehand).

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