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The Problem

Prediction markets offer binary outcomes with 100% downside exposure.
1

You Make a Bet

Place $50,000 on “Trump wins 2024” at 58% odds
2

Two Possible Outcomes

  • If Trump wins: You profit ~$36,000
  • If Trump loses: You lose all $50,000
3

No Middle Ground

Current Prediction market platforms offer no way to limit losses without giving up profits
The Risk: A single wrong prediction can wipe out your entire position.

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The Solution

Liquid Protocol introduces insurance for prediction markets.

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How It Works

Before Insurance

Bet: $50,000 on YES
If Lose: -$50,000
Max Loss: 100%

With Insurance

Bet: $50,000 on YES
Premium: $21,000
Coverage: $30,000
If Lose: -$41,000 total
Max Loss: 82% (saved 18%)

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Key Features

Claim based on actual losses, not fixed amounts.
  • Exit at -$10K loss → Claim $10K
  • Exit at -$30K loss → Claim $30K (up to coverage limit)
  • Exit at profit → Claim $0
You only use what you need.
All premiums calculated onchain using:
  1. Oracle odds (fair market value)
  2. Capacity curve (supply/demand)
  3. Balance curve (pool equilibrium)
No hidden fees, no surprises.
Every policy is an ERC-721 NFT you can:
  • Hold until expiry
  • Sell on OpenSea
  • Transfer to another wallet
  • Use as collateral (future)
Combines best of both worlds:
  • Oracle: Provides real-time market odds
  • AMM: Adjusts price based on pool state
Fair value + dynamic pricing = optimal efficiency

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Example Scenario

  • Setup
  • Scenario 1: You Win
  • Scenario 2: You Lose
  • Scenario 3: Early Exit
Market: Trump wins 2024
Current Odds: 58% YES / 42% NO
Your Position: $50,000 on YES
Insurance: $30,000 coverage (60% floor)
Premium: $21,000

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Why Liquid vs Alternatives?

MethodCap Downside?Keep Upside?Capital Efficient?
No Protection❌✅✅
Hedging✅❌❌
Stop Loss⚠️ Partial✅✅
Liquid Insurance✅✅✅

Ready to Get Started?

Follow our 5-minute quick start guide