Market Microstructure

Layer 3 — Trading

LMSR and Automated Market Makers: The Math Behind Prediction Market Liquidity

Derives the Logarithmic Market Scoring Rule (LMSR) cost function, price function, and bounded loss theorem. Compares LMSR to CLOB and constant-product AMMs for autonomous agent trading.

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Market Microstructure for Prediction Markets: Orderbooks, Spreads, and Liquidity

How prediction market orderbooks work — CLOB architecture, bid-ask spreads, depth of book analysis, slippage modeling, and maker-taker fees for autonomous betting agents.

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