Explain 'Create Market'


Can someone explain the 'create market' feature in it's current implementation? If you put 100 ether in as 'funding' for a market will you ever get that back? Or will you just get the x% fee back?


Hey @FuriousD - thank for your interest. At the current stage I can not recommend using it. The initial funding is used to fund the automated market maker. All traded are against this market maker.
This market maker can potentially lose or win money. However - under the assumption that traders make informed decisions they win on average that means that the market maker looses on average.
How much the market maker wins or looses is also very related to the question how long the market stays open. Lets say we start a market on the super bowl. If the market closes before the game starts than traders can most likely no do too much profitable trades against the MM. However - if the market stays open the whole game the MM will loose everything because at the end of the game traders will have driven the price of one outcome to 1 and by this bought all the shares from the market maker of the winning outcome.

We are working on our next iteration to make this much more clearer and to provide a good user interface for creating market. For markets where the fees will most likely not compensate the MM but the market is of public interest we are planning to do crowdfunded market. See this.