Trading on Aura

Aura delivers a robust, decentralized prediction market experience by utilizing a single-phase constant-sum market maker. Prices appear directly as probabilities, liquidity is available from the first trade, and a treasury-funded cushion keeps every share fully collateralized, so users enjoy optimal pricing, predictable slippage, and iron-clad solvency without any complex phase changes or hidden mechanics.

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Buying Outcome Shares

1. Navigate to Your Desired Market:

   • Select the market you wish to trade from the Aura homepage or search results.

2. Choose Outcome:

   • Decide between available outcomes, typically "YES" or "NO."

3. Input Amount:

   • Enter the amount of Alephium you wish to spend in the "Amount" input box.

   • The system will display the average share price, total shares acquired, and potential return.

4. Confirm Transaction:

   • Click the "Buy" button and confirm the transaction through your connected wallet.

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Selling Outcome Shares

1. Switch to Sell Tab:

   • On the market page, select the "Sell" tab.

2. Select Outcome Shares:

   • Choose the outcome shares you wish to sell.

3. Enter Share Amount:

   • Input the number of shares you intend to sell.

4. Complete the Sale:

   • Click the "Sell" button and confirm the transaction via your wallet.

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Parlay Bets (Multi-Leg Trades)

1. Multiple Legs:

   • Users can select 2 to 5 different market outcome positions (legs) to include in one parlay bet.

2. Combined Odds:

   • The odds of each leg multiply together, yielding a combined payout that can reach up to 50× the original stake if all legs are correct.

3. All-or-Nothing Payout:

   • Every leg must win for the parlay to pay out. If any leg fails, the entire parlay bet is lost and no payout is given.

4. Dynamic Odds Impact:

   • Parlay odds are influenced by the price impact of each leg on the others. Adding each leg can slightly adjust the overall odds, as the markets’ liquidity and prices respond to the combined bet.

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Understanding Fees & CSAMM Market Pricing Model

Aura's markets are powered by a constant-sum automated market maker (CSAMM).

• Two ALPH pools, one for each outcome. Buying moves ALPH into one pool and mints the matching YES or NO shares. Selling burns your shares and sends ALPH back from that pool.

• Prices are probabilities. The larger a pool is relative to the other, the higher the probability shown for that side.

• Treasury cushion for safety. At launch the Aura treasury seeds extra ALPH in both pools that has no shares issued against it. If a large one-sided trade would otherwise create un-backed shares, the contract automatically “peels” a slice of this cushion out of both pools to keep every share fully collateralized.

• What-you-see-is-what-you-get quotes. The UI asks the contract for an exact post-trade quote (including any peel that might trigger). You always know your share amount and price impact before you confirm the transaction.

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Benefits

Benefit	Why it matters
Instant liquidity	Trades are possible from the very first block—no waiting for external LPs.
Easy-to-read odds	Prices already represent probabilities (e.g. 0.64 = 64 % chance).
Guaranteed solvency	The cushion ensures every winning share always cashes out at 1 ALPH.
Low, predictable slippage	Depth only shrinks when the cushion is peeled, so normal trades stay smooth.

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Trading fee

• 2.5 % flat on every trade, taken in ALPH before pricing.

• Fee split:

  • A predefined slice goes to the market creator.

  • The remainder goes to the Aura treasury.

  • If you used a referral link, 10 % of the treasury slice is paid to the referrer.

  • If a market’s resolution is disputed and put to a community vote, 10 % of the treasury slice is redirected to voters who backed the ultimately correct outcome.

No other fees exist—no exit tax, hidden spread, or performance fee.

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Potential returns

Market resolves YES	Market resolves NO
Each YES share you hold pays 1 ALPH	Each NO share you hold pays 1 ALPH
All NO shares expire worthless	All YES shares expire worthless

As soon as a markets outcome is finalized, the winning sides shareholders will immediately be sent their winnings in ALPH to the same wallet they bought the shares with.

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Insolvency Protection

Aura includes built-in insolvency protection to ensure market integrity and prevent situations where the constant-sum automated market maker (CSAMM) cannot fulfill trades. This system automatically checks each trade before execution to verify that sufficient liquidity exists.

What is Market Insolvency?

A market becomes "insolvent" when it cannot guarantee payouts for winning positions. This typically occurs when:

• The liquidity pools become severely imbalanced

• There's insufficient ALPH backing to cover all outstanding shares

How Insolvency Checks Work

Buy Orders

Before executing any buy order, the system verifies:

1. The market has enough liquidity to mint new shares

2. The total shares after the trade won't exceed the available ALPH collateral

3. The market can maintain solvency after accounting for the cushion mechanism

Sell Orders

For sell orders, the system checks:

1. The market has sufficient ALPH to pay out for the shares being sold

2. The liquidity pool can handle the redemption without becoming negative

3. The trade won't leave the market unable to pay other shareholders

User Experience

Price Display

When a market cannot handle even minimal trades (1 ALPH):

• Buy prices show as "1.00" - indicating the market is essentially untradable

• Sell prices show as "0.00" - indicating shares cannot be redeemed

Trade Execution

When you attempt a trade:

1. The "Buy/Sell" button shows "Checking..." while verifying solvency

2. If the trade would make the market insolvent, the button changes to "Unavailable"

3. An error message appears: "Insufficient coverage for this trade"

Visual Indicators

• Normal markets: Display actual prices (e.g., "0.65" for 65% probability)

• Insolvent markets: Display "1.00" for buys or "0.00" for sells

The Cushion Mechanism

Markets maintain a "cushion" - a reserve of liquidity that helps prevent insolvency:

• Each pool (YES/NO) has up to 50% of initial funding as cushion

• The cushion is gradually used when trades would otherwise cause insolvency

• This allows markets to remain tradable longer during extreme price movements

What This Means for Traders

Protection Benefits

• No failed transactions: Trades that would cause insolvency are blocked before execution

• Transparent pricing: You can see when markets are becoming illiquid

• Fair warning: The UI clearly indicates when markets cannot accept trades

Trading Implications

• Markets showing "1.00" buy prices have exhausted their liquidity

• Markets showing "0.00" sell prices cannot redeem shares

• You may need to wait for other traders to balance the market

• Consider trading in smaller amounts if large trades show as unavailable

Technical Details

The insolvency check performs a full simulation of your trade:

1. Calculates the shares you would receive (for buys) or ALPH payout (for sells)

2. Simulates the cushion mechanism adjustments

3. Verifies final market state maintains: totalShares ≤ totalALPH + cushion

4. Only allows the trade if all conditions pass

This happens in real-time as you type your trade amount, ensuring you always know if your trade is viable before attempting execution.

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TL;DR

• Probabilities you can read at a glance.

• Always-on liquidity protected by an on-chain cushion.

• 2.5 % flat fee—simple and transparent.

• 1 ALPH per winning share—guaranteed.

• Dispute voters share in the fees when they call the outcome correctly.

Trade confidently with Aura’s constant-sum engine: straightforward, solvent, and easy to understand.