1. Introduction: The Prediction Market Revolution

Prediction markets have emerged as one of the most powerful tools for aggregating collective intelligence and forecasting future events. The 2024 U.S. election cycle demonstrated the explosive potential of this market, with over $3 billion in trading volume across various platforms, surpassing traditional polling mechanisms in both accuracy and engagement.

Despite this unprecedented growth, the prediction market industry remains fragmented, technically complex, and inaccessible to mainstream users. Current platforms suffer from capital inefficiency, high barriers to entry, and centralized control that limits innovation and competition.

Path Protocol: The AWS of Prediction Markets

Path Protocol represents a fundamental reimagining of prediction market infrastructure. Rather than building another siloed prediction market platform, Path operates as permissionless infrastructure that enables anyone to create, trade, and resolve prediction markets without requiring technical expertise or significant capital.

Just as Amazon Web Services (AWS) democratized cloud computing by providing scalable infrastructure, Path Protocol democratizes prediction markets by offering:

• Zero-capital Phased Dynamic LMSR (no liquidity providers or protocol reserves required)

• Permissionless platform ecosystem (third-party interfaces earn revenue)

• Multi-outcome market support (beyond simple binary predictions)

• Fair value distribution (creators, stakers, and platforms all earn)

The LMSR Advantage

Path Protocol is built on the Logarithmic Market Scoring Rule (LMSR), a mathematically superior automated market maker that eliminates the need for liquidity providers while providing instant, deep liquidity for any market. Unlike traditional constant product market makers (CPMM) that require significant capital deposits and expose liquidity providers to impermanent loss, Path Protocol implements a Phased Dynamic LMSR system that requires zero protocol capital while maintaining true LMSR behavior.

Key Innovation: Markets start in a BOUNDING phase (buy-only) to accumulate capital from traders, then transition to an ACTIVE phase with dynamic virtual reserves that always equal the real pool, ensuring accurate pricing and zero settlement risk.

Platform Ecosystem Vision

Path Protocol pioneers a platform revenue-sharing model where third-party interfaces can register, create markets, and earn a direct share of trading fees. This creates a flywheel effect: more platforms drive more markets, more markets drive more users, more users drive more volume, and more volume attracts more platforms.

Market creators earn perpetual fees from their markets, incentivizing high-quality, engaging prediction markets. PATH token stakers earn rewards from all platform activity, aligning long-term protocol governance with value creation.

Our Mission

Path Protocol's mission is to make prediction markets as ubiquitous and accessible as social media, enabling anyone to create markets about anything, anywhere, anytime. By removing capital requirements, enabling platform competition, and distributing value fairly across all stakeholders, Path is building the foundation for a new era of decentralized information markets.