Making a Prediction

Buying Market Outcome Assets

In this part we give an example of how to buy a market outcome asset in a categorical market. This effectively means making a prediction on the market.

1. Set up

First we import the needed modules from the sdk and polkadot.js. Some of the types are not needed but included for clarity.

note

To submit transactions we need to have the sdk in FullContext or RpcContext mode. Here we are using the FullContext.

import { KeyringPair } from "@polkadot/keyring/types";
import {
  AssetId,
  calcInGivenOut,
  create,
  FullContext,
  getIndexOf,
  mainnet,
  Market,
  Pool,
  Sdk,
  ZTG,
  ZtgAssetId,
  slippageFromFloat,
} from "@zeitgeistpm/sdk";

const sdk: Sdk<FullContext> = await create(mainnet());

2. Fetching Market and Pool

We fetch the market since it has metadata about the outcome categories that we need and the associated pool that we are going to buy assets from.

const marketId = 1;

const market: Market<FullContext> = await sdk.model.markets
  .get({ marketId })
  .then((market) => market.unwrap()!);

const pool: Pool<FullContext> = await sdk.model.swaps
  .getPool({ marketId })
  .then((pool) => pool.unwrap()!);

note

Note a market or pool might not exist by any given id so here we unwrap unsafely and do a non null assertion on them. This will throw an error if the market or pool does not exist and should be done in a safer way in a real world application like:

const market = (await sdk.model.markets.get({ marketId })).unwrap();

if (!market) {
  throw new Error("No market found");
}

3. Massaging the Trade Data

Now we massage the data fetched and further fetch some data we need to be able to make the trade.

First we normalize the assets in the pool to the AssetId type

const marketAssets: AssetId[] = pool.getAssetIds();

Then we declare the base asset we are going to buy the outcome assets with. This is the base asset of the pool.

const baseAsset: ZtgAssetId = { Ztg: null };

info

Currently only ZTG is able to be the base asset of a pool. But this will be expanded in the future.

Next we find the AssetId in the pool by the outcome name Yes that we want to buy.

const outcomeAssetIndex = market?.categories?.findIndex(
  (category) => category?.name === "Yes"
);
const outcomeAsset = marketAssets.find(
  (asset) => getIndexOf(asset) === outcomeAssetIndex
)!;

We want to buy 20 Yes assets

const amountToBuy = ZTG.mul(20).toString();

Now we need to fetch the asset balances in the pool for the base asset ZTG and the outcome asset we want to buy. We also need the swap fee, slippage percentage and weights of the pool assets so that we can calculate the max amount of base assets we are willing to pay for the outcome asset.

const [baseAssetBalance, outcomeAssetBalance] = await Promise.all([
  pool.getAssetBalance(baseAsset),
  pool.getAssetBalance(outcomeAsset),
]);

const baseAssetWeight = pool.getAssetWeight(baseAsset).unwrap()!;
const outcomeAssetWeight = pool.getAssetWeight(outcomeAsset).unwrap()!;

const amountToBuy = ZTG.mul(20).toString();
const swapFee = pool.getSwapFee();

const slippage = slippageFromFloat(0.1, "buying");

const maxAssetAmountIn = calcInGivenOut(
  baseAssetBalance,
  baseAssetWeight,
  outcomeAssetBalance,
  outcomeAssetWeight,
  amountToBuy,
  swapFee.div(ZTG).toNumber()
).mul(slippage);

info

The slippage here is set to 0.1%, for very active markets you might want to increase this a bit.

"Slippage tolerances establish a margin of change acceptable to the user beyond price impact."

Read more about slippage here.

danger

A high slippage increases the chance that a user's trade succeeds, however it also increases their chance of being front run and getting a worse deal.

4. Making the Transaction

Now we have all the data we need to submit the transaction and can submit it by calling the swapExactAmountOut method on the Pool

const signer: KeyringPair = getSignerSomehow();

const submittableResult = await pool.swapExactAmountOut({
  assetIn: { Ztg: null },
  assetAmountOut: amountToBuy,
  assetOut: outcomeAsset,
  signer,
  maxAssetAmountIn: maxAssetAmountIn.toFixed(0),
});

console.log("Trade Successfull");

Read more about signing transactions.

Full Code

Here is a link to the full code of this example with some smaller differences so its testable during development.

Full Code Snippet