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).
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).