How Parimutuel Pools Work
Viral Markets use a parimutuel betting system, where all bets are pooled, and payouts are shared among winners after a random outcome is selected. Here’s how it works:
Place Your Bet: Choose one of two outcomes (e.g., “Dog” or “Cat”) and bet USDC via your crypto wallet. All bets go into a single pool.
Pool Closes: A countdown timer (10–60 minutes) signals when betting stops. No further bets are accepted.
Random Outcome: Chainlink VRF, a secure random number generator, selects the winning outcome (e.g., “Dog”).
Rake Deduction: A configurable house fee (rake, e.g., 10%) is deducted from the pool.
Payouts: The remaining pool is distributed pro-rata to bettors who picked the winning outcome. If only one side has bets, all bettors are refunded automatically.
Video Reveal: A random AI-generated video clip from the winning outcome’s video bank plays to announce the result.
Example Scenario of Viral Markets
Consider a Viral Market: “Who came first: Chicken or Egg?”
You bet 300 USDC on Chicken. Another user bets 200 USDC on Egg. A third user bets 500 USDC on Chicken.
Pool State: Chicken = 800 USDC, Egg = 200 USDC, Total = 1,000 USDC.
The timer ends, and the pool closes. The smart contract deducts a 10% rake (100 USDC), leaving 900 USDC.
Chainlink VRF selects “Chicken” as the winner. A Chicken video plays.
Payout: The 900 USDC is split among Chicken bettors (800 USDC total). Payout factor = 900 ÷ 800 = 1.125x. You receive 337.5 USDC; the other Chicken bettor gets 562.5 USDC; Egg bettors get 0 USDC.
If only Chicken had bets, all 1,000 USDC would be refunded, with no rake applied.
Why It’s Different from Prediction Markets
No Trading: Bets are fixed and cannot be sold or traded, unlike prediction market shares.
Odds at Close: Payouts are calculated only after the pool locks, not based on real-time probabilities.
Random Outcomes: Results are determined by Chainlink VRF, not event-based predictions.
This system ensures fast, fair, and transparent betting with minimal complexity.
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