Price Impact

When you place a bet, there will be a price impact on your particular transaction due to the AMM algorithm.

This mechanism will prevent any transactions impacting the overall market prices or create volatility for the liquidity pool.

Here's an example to help illustrate the concept of price impact on Goal3 sports AMM betting:

Imagine you are betting on a football match. The current available liquidity for this pool is $50,000.

  • You decide to bet a total of $1000, representing 2% of the total liquidity, therefore this trade has a minimal impact on the overall market prices.

  • If instead, you decide to bet $10,000, representing 20% of the total liquidity, in this case this trade would have a much bigger impact on the overall betting price and could potentially move the odds of the team you are betting on down.

This example shows how the amount of the bet can affect the price impact, the first trade represents a minimal impact , while the second trade represents a big impact on the odds of the team.

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