Seer 101: Providing Liquidity to Markets

Permissionless market creation is a powerful feature of Seer that enables any user to create prediction markets. Another tool decentralizing the marketplace and empowering users is the ability of any user to provide liquidity to any market. This allows information seekers to add liquidity to markets of interest, leading to higher trading volume and the more efficient pricing of market outcomes.

These instructions and examples are for Seer prediction markets on the Gnosis chain.

Adding Liquidity to markets

A) Use sDAI or xDAI to mint tokens. Plan to apply roughly 50% of the total collateral you plan to use for that specific market’s liquidity. Click “More” underneath the Trade (Buy and Sell) box and the option to “Mint” will appear. In this example we’re minting 500 sDAI worth of tokens.

B) Add liquidity to each individual outcome by clicking “Add Liquidity” for the respective outcome. In this example we’ll start the DOWN outcome (the “SY25_EDI_DO” outcome token) in this scalar market. Note how the 500 sDAI minted in step 1 created 500 outcome tokens for each outcome.

C) Clicking “Add Liquidity” will take you to Swapr where liquidity is managed for Seer markets.

• (1) Select a pair. The pair of tokens for the liquidity pool should be selected for you automatically. In the below example we see that SY25_EDI_DO and sDAI are chosen. Double-check before clicking “Set initial price >”

• (2) Set initial price. Set the initial value for the tokens. Remember that the value of all the outcome tokens for this market should add up to 1. This DOWN token is valued at 0.53. (UP will be 0.45 and INVALID will be 0.02). Double-check your values before clicking “Select a range >”

• (3) Select a range. You can set a custom price range or select a preset range. To minimize risk, particularly if you are inexperienced with providing liquidity, select “Safe” from the Preset ranges. Now click “Enter amounts >”

• (4) Enter amounts. First click “Approve” for Swapr to access each of the two tokens:

Click “MAX” for the amount representing outcome tokens

Adjust to “Token ratio” only if you understand the consequences on the price. Otherwise, double-check the token amounts and then click “Add liquidity”

Click “Go to pools” to check your positions in Swapr.

On the “Positions Overview” page you can toggle between “Active positions” (currently holding) and “All positions” (that you have ever held with this address in Swapr).

Below, you should see the position you just created:

D) Now repeat the process for the other outcomes in this particular market.

By providing liquidity to an outcome in a market, LPs will earn a small percentage of the transaction fees when the respective outcome is bought or sold.

And Seer has launched an Initial Airdrop Distribution where SEER tokens can be earned in proportion to the effective liquidity provided on designated liquidity pools. There will be a “Seer LP Point” token (SER-lpp) which will serve as a receipt and to allow liquidity providers to clearly understand how many points they are getting.