PALANTÍRI - A PREDICTION MARKET REDESIGN

Summary from the TLDR Crypto newsletter

Palantíri introduces a dynamic AMM that blends LMSR's bounded-loss pricing with adaptive liquidity inspired by PM-AMM using a time-varying function b(t) that grows with trading volume and gently decays as events near resolution. It incorporates a certainty throttle to protect LPs when probabilities approach 0 or 1, alongside fee mechanics and slippage guards to ensure fair compensation and stable pricing. By treating b(t) like a “smart thermostat,” the market deepens as interest rises and cools off before close, offering both scalability and risk control. Ongoing work will explore LP withdrawal methods, auto-compounding strategies, dispute resolution layers, customized time-decay profiles, and stress-testing with realistic trader behaviors.