Automated Cover Maker (ACM) providing liquidity for volatile events.
Pharo is an evolution of the Automated Market Maker concept (AMM), which we call an Automated Coverage Maker (ACM). An AMM has Buyers, Sellers, and Liquidity Providers; while an ACM has Buyers, Events, and Liquidity Providers. The protocol in both cases is optimized for their two sided marketplace; In an AMM, Buyers and Sellers are facilitated by Liquidity Providers who assume the risk of completing a transaction. In an ACM Buyers are affected by the real-world Event, and save for its inevitability, while Liquidity Providers assume the Event risk and provide stability over time.
Pharo’s Journey
There are endless events and combinations of. These undead Mummies incentivize believers, aka Buyers and Providers, to buy cover early and to stake Event odds that maximize their returns, coronating a Pharo.
A Pharo’s risk balances between: the greatest payout, unclaimed liquidity, unclaimed demand, $PHARO token rewards, and clarity around the event. $PHARO tokens are distributed to stakeholders along a bond curve that rewards believers.
Eventually the fog of uncertainty around an Event lifts, belief is no longer necessary, and Imhotep locks unmet demand with new Liquidity Providers. Imhotep has no power to reward $PHARO tokens.
Emergence of Events is managed as a DAO using $PHARO tokens. When the Event is triggered either way, Anubis distributes the Pharo’s body as $PHARO tokens to its believers. Believers are immortalized in the Pharo’s Obelisk, allowing anyone and everyone to know who bought in, what risk they took, and their constitution of Pharo.
More to Come…
