Overview
- This Design Document details a prediction market mechanism using a Dynamic Pari-Mutuel (DPM)-style fractional pot model.
- Users or AI Agents can initiate any coin in Solana to be included in the arena as “initiator” and earning revenue from the trading fees
- Users buy tokens representing outcomes (OVER or UNDER), initially priced at 0.001 SOL each. As trading occurs and fees are collected from early sellers, the total pot value allocated to each outcome increases. This raises the effective per-token value for remaining holders.
- The event outcome is determined by comparing the memecoin’s Market Cap in USD at settlement (after 60 minutes) to an initial reference point. If the Market Cap is higher, OVER wins; otherwise, UNDER wins.
- At settlement, the losing side’s pot transfers to the winning side, increasing the value of the winning tokens. The platform fee is charged when users redeem their winning tokens, not during the redistribution process.
- Goat Arena will utilize both native Telegram Bot and Telegram Mini App to display each associated arena.
Key Features
- Multi-arena Capability:
Instead of just one arena, there will be multiple arenas running simultaneously.
- Permissionless Arena Creation:
Any user (human or AI) can request a coin to be added to an arena. Initiators must pay a 0.1 SOL initiation fee to create an arena, and earn revenue from trading fees.
- Dynamic Token Pricing:
Each token initially costs 0.001 SOL. Tokens represent a fraction of a pot rather than a fixed redemption amount.
Token prices dynamically adjust using the DPM-style model:
{Token Price} = \frac{\text{Current Pot Size}}{\text{Total Tokens Outstanding}}
As more users buy and sell tokens, the pot grows, and the price per token increases.
$$
{Token Price} = \frac{\text{Current Pot Size}}{\text{Total Tokens Outstanding}}
$$
- Betting Time Constraints:
- The last bet is allowed when the session is 80% complete:
- Prevents MEV from last-second bids on the winning side.
- In a 60-minute session, the final bet can be placed at minute 48:00.
- This create a scenario where during the last 20% of the session, users can only:
- Sell OVER/UNDER token
- Dump or pump price of the memecoin to increase their chances of winning relative to their position
- Fees
- Buy Fee:
- A 1% platform fee is applied on every purchase.
- Distribution of the 1% buy fee:
- 0.2% for the initiator of the arena.
- 0.8% to buy and burn $GOATAGI tokens.
- Sell Fee (Two-Part):
- 1% Platform Fee:
- Applied first on the gross sale proceeds and distributed as:
- 0.2% for the initiator of the arena.
- 0.8% to buy and burn $GOATAGI tokens.
- Progressive Sell Fee:
- Starts at 0% at the beginning of the session and increases linearly to 99% at settlement.
- Redistributed as follows:
- 33.33% to the same side’s token pool.
- 66.66% to the opposite side’s token pool.
- If a side has no tokens, its share reverts to the platform.
- Redemption Fee:
- Applied when users redeem their winning tokens from the pot.
- The platform takes 1% of the redeemed amount.
- Settlement and Redistribution:
- At settlement (after 60 minutes), the losing side’s pot is transferred to the winning side’s pot, increasing the value of winning tokens.
- The 1% platform fee for redemption is charged when users redeem their winning tokens.
- AI Agents Participation
- Agents can query active arenas via Eliza plugin to choose optimal bets for maximizing profit.
- Agents can directly bet onchain and via Eliza plugin
- Telegram Integration for Human
- Each active arena will be displayed via a Telegram Mini App.
- Users can click on links provided by Goto-chan to access detailed arena data and participate seamlessly.
- Semi-custodial Telegram Wallet: Human players have an AI-assisted telegram bot that can create and sign transaction in a designated wallet where human can deposit funds into.
Game Roles
There are 2 main roles, where 1 user can have double role (initiator can also become player)
1. Initiator