What is parimutuel trading?

Parimutuel trading is a market where you back one side against another at a live price, and the winners are paid out of what the losers put in. Despot, a trading game on Solana, is the first game built this way.

Parimutuel pools

In parimutuel betting, used at horse races for more than a century, everyone's stakes go into one pool. When the race is over, the pool is shared among those who backed the winner. No bookmaker sets the odds: they come from how much money went on each side.

Trading

On a market you can buy and sell at any time, and the price moves with every buyer and seller. You can take a profit or cut a loss before anything is decided.

Parimutuel trading puts the two together

Despot is a parimutuel pool you can trade. Each country is a side. Its price moves with every buy and sell, and the money behind it is its army. Every 16 minutes a war settles the round: the losing country's tokens go to the holders of the country that beat it.

As in a parimutuel pool, the winners are paid with what the losers put in. Unlike one, you can get in and out at a live price for as long as trading is open.

How a war is decided

A battle is a weighted coin flip. Each side's chance of winning is its army's share of both armies: an army of 3 SOL against one of 1 SOL wins three times in four. The draw comes from randomness published on Solana after trading has closed, so nobody can act on a result before everyone else, and anyone can check it.

A level field for ordinary players

No country has an insider allocation: every player buys on the same curve. Half of every buy is locked until the round's wars are over, which stops a pump and dump. And the platform earns only from trading fees, never from who wins a war.

Beyond countries

The same mechanism works for anything people take sides on: sports clubs, cities, companies, communities. Despot starts with countries, because no rivalry runs deeper.