OddsForge
How Trading Works
A deep dive into the parimutuel trading model that powers OddsForge.
The Parimutuel Model
OddsForge uses a parimutuel trading system â a proven model used globally in prediction platforms, lottery systems, and forecasting markets. Instead of matching individual buyers and sellers (like an orderbook exchange), all trades go into a shared pool and winners split the pot.
How It Works
- Traders place predictions on either YES or NO for a market question.
- All trades go into a pool â the YES pool and NO pool together make up the total market pool.
- When the market resolves, the losing side's pool is distributed to winners proportionally.
- A 5% platform fee is deducted from the losing pool before distribution.
Placing a Trade
When you place a trade on OddsForge, here's what happens under the hood:
1. Token Approval
Before your first trade, you need to approve the OddsForge smart contract to spend your USDC. This is a standard ERC-20 approval â a one-time transaction per token.
2. Trade Execution
When you click "Place Trade":
- Your USDC is transferred from your wallet to the smart contract.
- The smart contract records your trade amount, the side you chose (YES/NO), and the current pool state.
- Your position is recorded on-chain â fully transparent and verifiable.
- The market's prices update to reflect the new pool ratio.
3. On-Chain Confirmation
The transaction is confirmed on BNB Smart Chain within seconds. You'll see your new position reflected in your portfolio immediately.
The Trading Lifecycle
| Phase | What Happens |
|---|---|
| đĸ Active | Market is open for trading. Traders buy YES or NO shares. |
| đĄ Closed | Trading is closed. No more trades accepted. Awaiting resolution. |
| đĩ Resolved | Market outcome is determined. Winning side is announced. |
| âĒ Settled | Smart contract distributes winnings to the winning side. |
Winning and Losing
If You Win
Your payout is proportional to your share of the winning pool:
Payout = (Your Trade / Winning Pool) à (Total Pool à 0.95)The 0.95 multiplier accounts for the 5% platform fee taken from the losing side. Winners always receive more than they traded (assuming the losing pool is non-zero).
If You Lose
Your shares are worth $0. Your USDC has already been contributed to the pool and is distributed to the winners.
Platform Fee
OddsForge charges a 5% fee on the losing pool at resolution time:
- The fee is only taken from the losing side â winners are not charged.
- The fee is deducted before distributing winnings.
- This fee funds platform development, maintenance, and operations.
Smart Contract Security
All trading on OddsForge is handled by the OddsForgeV2 smart contract on BSC:
- Non-custodial: Your funds are held by the smart contract, not by OddsForge team.
- Transparent: All pool sizes, trades, and payouts are verifiable on BscScan.
- Automated settlement: Winnings are calculated and distributed by the smart contract â no manual intervention.
- Cancel protection: If a market is cancelled, all traders receive a full refund automatically.
Market Cancellation
In rare cases, a market may be cancelled (e.g., ambiguous resolution criteria, event postponed indefinitely). When this happens:
- All traders receive a 100% refund of their original trade amount.
- The refund is processed automatically by the smart contract.
- No fees are charged on cancelled markets.