The Pre-seed Reward Pool is where creators and early contributors earn their rewards.

When a market resolves, the reward pool is distributed to everyone who contributed during the Pre-seed, based on how much they contributed.

The reward pool has two sources:

1. A share of trading fees generated by the market
2. The liquidity funds returned after the market resolves

Source 1 Trading fees (50% of every trade)

Each trade contributes to the Reward Pool.

Of the 3% trading fee charged on every trade, 50% is added to the Pre-seed Reward Pool.

The more people trade your market, the larger the Reward Pool becomes.

Source 2 Liquidity Returns (capital + P&L)

When the market launches, 80% of the Pre-seed funds become market liquidity.

After the market resolves, the remaining liquidity, including any gains or losses, is returned to the Reward Pool.

LP TAKES 80%
   |
   +-- Bootstrap liquidity
   +-- Trades over market life
   |
   v  Market resolves
   |
   +-- LP PROFIT (e.g. $8 in -> $10 out)
   |   -> $10 flows back to reward pool
   |
   +-- LP LOSS (e.g. $8 in -> $6 out)
       -> $6 flows back to reward pool

Note: Worked example (profit case)

LP takes $8 from Pre-seed. $6 gets used/matched in orders. After redeem, that $6 becomes $8 (LP profit of $2). Total returned = $8 (redeemed) + $2 (unused cash) = $10 flows back to the reward pool. The pool grew by $2 thanks to LP market-making.

Warning: Worked example (loss case)

LP takes $8. After redeem, only $6 comes back. $6 flows back to the reward pool. Investors and creators absorb the loss proportionally the pool can be smaller than the original 80%.

Final pool = Source 1 + Source 2

PRE-SEED REWARD POOL (at resolution) =
    (accumulated 50% of all trading fees)
    +
    (LP returns: capital + P&L, could be + or -)

Reward Distribution

After the dispute period ends, the Reward Pool is distributed to all Pre-seed contributors.

Rewards are proportional to each person's contribution. For example: