Volatility Pools
Overview
Volatility Pools are pooled markets on the size of a price move. Each market asks one question: will an asset move more than a set percentage, up or down, within a fixed window?
How a market works
A market names an asset, a window and a threshold. For example: will NVDA move more than 1.91% between today's close and tomorrow's close? The direction does not matter, only the size of the move.
- YES wins if the move is larger than the threshold.
- NO wins if it is not. An exact tie goes to NO.
Deposits go into the pool of the side you choose. When the window closes, the winning side shares the losing pool in proportion to what each participant deposited, after a fee. There is no order book and no counterparty set by the protocol: the odds are the ratio between the two pools.
Reading the odds
If YES holds 600 USDX and NO holds 400, the pot is 1,000. After a 1% fee, 990 is paid to the winning side. If YES wins, each YES deposit returns 990 / 600 = 1.65x. If NO wins, each NO deposit returns 990 / 400 = 2.475x. The pools move as deposits arrive, so the multiple shown in the app is an estimate until the market locks.
The most a participant can lose is the deposit. There is no margin, no leverage and no liquidation.
Current listings
| Venue | Instrument | Window | Assets |
|---|---|---|---|
| Equities | Daily ladder | Close to close, New York time | NVDA, TSLA, SPY |
| Equities | Hourly | One hour of the regular session | NVDA |
| Crypto | Daily ladder | 00:00 to 00:00 UTC | BTC, ETH, SOL |
| Crypto | Hourly | One hour, on the hour, UTC | BTC |
A daily ladder is three markets on the same asset and window with three thresholds: TIGHT, FAIR and WIDE. Hourly markets use the FAIR threshold only. How thresholds are set is covered in Markets and thresholds.