Does it mean that when there are many of the same bets, the wages decreases? Please do enlighten me.
Consider a game with 2 outcomes which are equally likely to happen. Both (decimal) odds for that outcome are set to 3.0 at the beginning (before any bet is placed).
I picked the following wages just for the sake of simplicity, you can bet any amount you wish.First player puts 1 BTC on the first outcome at odds 3.0 (he gets 3.0 BTC if he wins).
-> This bet makes the odds for the first outcome decrease and the odds for the other outcome increase: they are now respectively 2.9 and 3.1
Second player comes in and puts 1 BTC on the first outcome at odds 2.9.
-> This bet makes the odds for the first outcome decrease again at 2.8 while the other goes up.
And so on and so forth...
Of course, if the first player bets 2 BTC at the beginning, he will get odds around 2.95 (half way between 3.0 and 2.9).
If some money is placed on the second outcome then the second odds will start going down while the first one will go up: this is the same mechanism.
It works exactly the law of demand in economics: the more people put money on an outcome, the more the odds for that outcome will decrease.
I like how you can actually sell your bet. This basically qualifies as trading as you have invested in a bet and risked either if the bet's value will go up or down.
You are right, this is exactly like trading
. When you make a bet, you make a contract with PrediMarket to pay you, for example 2 BTC, if your prediction is correct, in exchange of engaging 1 BTC. The value of this contract is 1 BTC, in other words, the amount you chose to bet. Then, if other players bet more money afterwards, the value of your bet (contract) will fluctuate:
the more people put money on the outcome you chose, the more the value of your contract will increase. The opposite happens if people tend to favor the other outcome.
This is because the bet has an intrinsic value that you can sell it at any time.
OP, I'm quite not knowledgeable about how "fixed-odds on-demand" works.
Well, this is just an expression to try to convey the idea that PrediMarket offers fixed-odds (fixed amount paid for a wage) but depending on the amount you want to bet (your demand), you will get different odds as explained above.