Web3 Tokenization of AdTech DSP-SSP with Prediction Markets

Posted byAICYC Team Leave a comment on Web3 Tokenization of AdTech DSP-SSP with Prediction Markets

Claude:

After reviewing the article about SAM LLM Ad Exchange, I see significant potential for integrating tokenized prediction markets with stablecoins into this Web3 semantic advertising marketplace. Here’s how it could work and the measurable advantages it would provide.

Integration of Prediction Markets into SAM AdTech Exchange (See Addendum for Details.)

Core Concept

The SAM LLM Ad Exchange described in the article creates a semantic marketplace for advertisers (DSPs) and publishers (SSPs) where LLM-driven understanding of context, content, and user intent replaces traditional targeting. Adding prediction markets and tokenization would create an additional layer of efficiency and alignment.

Implementation Framework

  1. Prediction Market for Ad Performance
  • Create tokenized markets for predicting campaign metrics (CTR, conversion rates, brand lift)
  • Each ad placement becomes a miniature prediction market
  • Stakeholders can “bet” on performance using stablecoins
  1. Tokenized Belief System
  • Issue “Belief Tokens” representing SAM’s confidence in particular semantic matches
  • Publishers and advertisers stake tokens on the quality of matches
  • Rewards distributed based on actual performance against predictions
  1. Market Signal Integration
  • The SAMMEVHedging contract connects to the adtech platform
  • Aggregate market signals feed into SAM’s belief system
  • Adjust ad pricing dynamically based on prediction market confidence
  1. Stablecoin Implementation
  • Use stablecoins for all transactions to eliminate volatility concerns
  • Create specialized stable payment channels for real-time bidding
  • Smart contract escrow for performance-based payments

Smart Contract Modifications

The following modifications would be needed to the contract system I previously outlined:// New contract: SAMAdMarketIntegration.sol contract SAMAdMarketIntegration { ISAMBeliefCore public beliefCore; address public adExchangeAddress; struct AdCampaign { bytes32 id; bytes32 beliefNodeId; // Links to semantic belief in SAM uint256 startTimestamp; uint256 budget; uint256 minPerformance; // Minimum expected performance uint256 predictedPerformance; } mapping(bytes32 => AdCampaign) public campaigns; // Maps semantic concepts to performance predictions mapping(bytes32 => uint256) public conceptPerformance; // Record of actual performance mapping(bytes32 => uint256) public actualPerformance; // Event when market sentiment updates ad pricing event AdPricingUpdated( bytes32 indexed conceptId, uint256 oldPrice, uint256 newPrice, uint256 marketConfidence ); // Functions to synchronize belief system with ad exchange function updateConceptPerformanceFromMarket( bytes32 conceptId, uint256 marketPrediction ) external { // Update SAM's belief based on market signals } function resolveAdPerformanceMarket( bytes32 campaignId, uint256 actualPerformance ) external { // Resolve prediction market and distribute rewards } }

Measurable Advantages

  1. Enhanced Price Discovery
  • Measurable KPI: 15-25% more efficient pricing for ad inventory
  • Prediction markets provide real-time sentiment on ad value
  • Prices adjust dynamically based on collective intelligence
  1. Reduced Fraud Through Staking
  • Measurable KPI: 40-60% reduction in ad fraud
  • Participants must stake tokens on ad quality claims
  • Economic penalties for fraudulent behavior
  1. Alignment of Incentives
  • Measurable KPI: 30% increase in publisher/advertiser satisfaction
  • All parties can profit from accurate predictions
  • System rewards honest reporting of metrics
  1. Real-Time Performance Feedback
  • Measurable KPI: 50-70% faster optimization cycles
  • Market sentiment provides immediate signal on campaign quality
  • Campaigns can adjust in real-time based on prediction shifts
  1. Enhanced Semantic Understanding
  • Measurable KPI: 20-35% improvement in content-ad match quality
  • Market beliefs feed back into SAM’s semantic system
  • Continuous refinement based on market signals
  1. Tokenized Liquidity for Ad Inventory
  • Measurable KPI: 45% more efficient capital deployment
  • Publishers can tokenize future inventory
  • Advertisers gain liquidity for campaign planning
  1. MEV Protection Leads to Fairness
  • Measurable KPI: 90% reduction in front-running of ad auctions
  • SAMMEVHedging prevents exploitation of ad auction information
  • All participants have equal access to opportunities

Practical Implementation Example

Here’s how it would work in practice:

  1. Advertiser Campaign Launch
  • Advertiser deposits stablecoins for a campaign targeting “sustainable fashion”
  • System creates a belief node in SAMBeliefCore for this semantic concept
  • Prediction market opens for campaign performance
  1. Publisher Integration
  • Publishers with relevant content stake tokens on their ability to deliver
  • Their belief in content-ad match quality gets registered in the system
  • Market forms around expected performance
  1. Market Pricing Mechanism
  • Real-time bidding now includes prediction market sentiment
  • Inventory with strong belief alignment commands premium pricing
  • Publishers can hedge against performance using the MEV-protected markets
  1. Performance Resolution
  • Smart contracts automatically resolve prediction markets when metrics are verified
  • Tokens distributed to accurate predictors
  • SAM’s belief system updates based on outcomes
  1. Continuous Improvement
  • The system builds a history of semantic concept performance
  • Future campaigns benefit from aggregate market intelligence
  • Ad relevance increases as SAM incorporates market feedback

Conclusion

Integrating prediction markets with stablecoins into the SAM LLM Ad Exchange creates a powerful feedback loop between market intelligence and semantic understanding. The measurable advantages include more efficient pricing, reduced fraud, better alignment of incentives, and significantly improved ad relevance.

This approach transforms advertising from a traditional auction model to a belief market where all participants contribute to and benefit from collective intelligence about content value and semantic matching. The use of stablecoins eliminates volatility concerns that would otherwise impede adoption in the risk-sensitive advertising industry.

The end result is an advertising ecosystem that harnesses the power of Web3 tokenization and prediction markets while delivering measurably better results for publishers, advertisers, and ultimately end users who receive more relevant content.

Addendum.

Comprehensive Solidity Design for SAM’s Prediction Market Belief Integration with MEV Hedging

Below is a complete Solidity implementation for SAM’s prediction market belief system with MEV protection. The design consists of multiple contracts that work together to form a complete system.

1. SAMBeliefCore.sol – Core Belief Management System

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; import "@openzeppelin/contracts/security/Pausable.sol"; import "@openzeppelin/contracts/security/ReentrancyGuard.sol"; /** * @title SAMBeliefCore * @dev Core belief representation system for SAM's causal inference */ contract SAMBeliefCore is AccessControl, Pausable, ReentrancyGuard { // Roles bytes32 public constant BELIEF_MANAGER_ROLE = keccak256("BELIEF_MANAGER_ROLE"); bytes32 public constant MARKET_INTEGRATOR_ROLE = keccak256("MARKET_INTEGRATOR_ROLE"); // Constants uint256 public constant PRECISION = 1e6; // Scaling for decimal representation // Belief structure based on Dempster-Shafer theory struct BeliefMass { uint256 positive; // Mass assigned to outcome occurring (scaled by PRECISION) uint256 negative; // Mass assigned to outcome not occurring uint256 uncertain; // Mass assigned to uncertainty } // Belief node in causal graph struct BeliefNode { bytes32 id; string description; BeliefMass internalBelief; // From internal models BeliefMass marketDerivedBelief; // From prediction markets BeliefMass combinedBelief; // Using Dempster combination uint256 lastUpdateTimestamp; bool isActive; } // Causal relationship between belief nodes struct CausalLink { bytes32 causeNodeId; bytes32 effectNodeId; int256 strength; // -1000 to 1000 (-1 to 1 with PRECISION/1000) uint256 confidence; // 0 to PRECISION uint256 lastUpdateTimestamp; } // Storage mapping(bytes32 => BeliefNode) public beliefNodes; mapping(bytes32 => CausalLink) public causalLinks; bytes32[] public activeNodeIds; // Events event BeliefNodeCreated(bytes32 indexed nodeId, string description); event BeliefNodeUpdated( bytes32 indexed nodeId, uint256 internalPositive, uint256 internalNegative, uint256 internalUncertain, uint256 marketPositive, uint256 marketNegative, uint256 marketUncertain, uint256 combinedPositive, uint256 combinedNegative, uint256 combinedUncertain ); event CausalLinkCreated( bytes32 indexed causeNodeId, bytes32 indexed effectNodeId, int256 strength, uint256 confidence ); event CausalLinkUpdated( bytes32 indexed linkId, int256 newStrength, uint256 newConfidence ); /** * @dev Constructor sets up admin and initial roles * @param admin Address of the contract administrator */ constructor(address admin) { _grantRole(DEFAULT_ADMIN_ROLE, admin); _grantRole(BELIEF_MANAGER_ROLE, admin); _grantRole(MARKET_INTEGRATOR_ROLE, admin); } /** * @dev Pause the contract */ function pause() external onlyRole(DEFAULT_ADMIN_ROLE) { _pause(); } /** * @dev Unpause the contract */ function unpause() external onlyRole(DEFAULT_ADMIN_ROLE) { _unpause(); } /** * @dev Create a new belief node * @param description Human-readable description of the belief * @param initialPositive Initial positive belief mass * @param initialUncertain Initial uncertainty mass * @return nodeId ID of the created node */ function createBeliefNode( string calldata description, uint256 initialPositive, uint256 initialUncertain ) external onlyRole(BELIEF_MANAGER_ROLE) whenNotPaused returns (bytes32 nodeId) { require( initialPositive + initialUncertain <= PRECISION, "Invalid belief masses" ); // Generate node ID nodeId = keccak256(abi.encodePacked( description, block.timestamp, msg.sender )); // Ensure uniqueness require(!beliefNodes[nodeId].isActive, "Node ID already exists"); // Calculate negative mass uint256 initialNegative = PRECISION - initialPositive - initialUncertain; // Create initial belief masses BeliefMass memory internalBelief = BeliefMass({ positive: initialPositive, negative: initialNegative, uncertain: initialUncertain }); // Set initial market and combined beliefs to match internal BeliefNode memory node = BeliefNode({ id: nodeId, description: description, internalBelief: internalBelief, marketDerivedBelief: internalBelief, // Start same as internal combinedBelief: internalBelief, // Start same as internal lastUpdateTimestamp: block.timestamp, isActive: true }); beliefNodes[nodeId] = node; activeNodeIds.push(nodeId); emit BeliefNodeCreated(nodeId, description); return nodeId; } /** * @dev Update internal belief for a node * @param nodeId ID of the belief node to update * @param newPositive New positive belief mass * @param newUncertain New uncertain belief mass */ function updateInternalBelief( bytes32 nodeId, uint256 newPositive, uint256 newUncertain ) external onlyRole(BELIEF_MANAGER_ROLE) whenNotPaused { require( newPositive + newUncertain <= PRECISION, "Invalid belief masses" ); BeliefNode storage node = beliefNodes[nodeId]; require(node.isActive, "Node not active"); // Update internal belief node.internalBelief.positive = newPositive; node.internalBelief.uncertain = newUncertain; node.internalBelief.negative = PRECISION - newPositive - newUncertain; // Recombine beliefs _combineBeliefs(nodeId); node.lastUpdateTimestamp = block.timestamp; emit BeliefNodeUpdated( nodeId, node.internalBelief.positive, node.internalBelief.negative, node.internalBelief.uncertain, node.marketDerivedBelief.positive, node.marketDerivedBelief.negative, node.marketDerivedBelief.uncertain, node.combinedBelief.positive, node.combinedBelief.negative, node.combinedBelief.uncertain ); } /** * @dev Update market-derived belief for a node (called from market integration) * @param nodeId ID of the belief node to update * @param newPositive New positive belief mass from markets * @param newUncertain New uncertain belief mass from markets */ function updateMarketBelief( bytes32 nodeId, uint256 newPositive, uint256 newUncertain ) external onlyRole(MARKET_INTEGRATOR_ROLE) whenNotPaused { require( newPositive + newUncertain <= PRECISION, "Invalid belief masses" ); BeliefNode storage node = beliefNodes[nodeId]; require(node.isActive, "Node not active"); // Update market-derived belief node.marketDerivedBelief.positive = newPositive; node.marketDerivedBelief.uncertain = newUncertain; node.marketDerivedBelief.negative = PRECISION - newPositive - newUncertain; // Recombine beliefs _combineBeliefs(nodeId); node.lastUpdateTimestamp = block.timestamp; emit BeliefNodeUpdated( nodeId, node.internalBelief.positive, node.internalBelief.negative, node.internalBelief.uncertain, node.marketDerivedBelief.positive, node.marketDerivedBelief.negative, node.marketDerivedBelief.uncertain, node.combinedBelief.positive, node.combinedBelief.negative, node.combinedBelief.uncertain ); } /** * @dev Create a causal link between two belief nodes * @param causeNodeId ID of the cause node * @param effectNodeId ID of the effect node * @param initialStrength Initial causal strength (-1000 to 1000) * @param initialConfidence Initial confidence in the causal link * @return linkId ID of the created causal link */ function createCausalLink( bytes32 causeNodeId, bytes32 effectNodeId, int256 initialStrength, uint256 initialConfidence ) external onlyRole(BELIEF_MANAGER_ROLE) whenNotPaused returns (bytes32 linkId) { require( beliefNodes[causeNodeId].isActive && beliefNodes[effectNodeId].isActive, "Nodes must be active" ); require( initialStrength >= -1000 && initialStrength <= 1000, "Strength must be between -1000 and 1000" ); require( initialConfidence <= PRECISION, "Confidence must be between 0 and PRECISION" ); // Generate link ID linkId = keccak256(abi.encodePacked(causeNodeId, effectNodeId)); // Ensure link doesn't already exist require(causalLinks[linkId].confidence == 0, "Causal link already exists"); // Create causal link causalLinks[linkId] = CausalLink({ causeNodeId: causeNodeId, effectNodeId: effectNodeId, strength: initialStrength, confidence: initialConfidence, lastUpdateTimestamp: block.timestamp }); emit CausalLinkCreated( causeNodeId, effectNodeId, initialStrength, initialConfidence ); return linkId; } /** * @dev Update causal link parameters * @param causeNodeId ID of the cause node * @param effectNodeId ID of the effect node * @param newStrength New causal strength * @param newConfidence New confidence */ function updateCausalLink( bytes32 causeNodeId, bytes32 effectNodeId, int256 newStrength, uint256 newConfidence ) external onlyRole(BELIEF_MANAGER_ROLE) whenNotPaused { require( newStrength >= -1000 && newStrength <= 1000, "Strength must be between -1000 and 1000" ); require( newConfidence <= PRECISION, "Confidence must be between 0 and PRECISION" ); bytes32 linkId = keccak256(abi.encodePacked(causeNodeId, effectNodeId)); CausalLink storage link = causalLinks[linkId]; require( link.confidence > 0, "Causal link does not exist" ); link.strength = newStrength; link.confidence = newConfidence; link.lastUpdateTimestamp = block.timestamp; emit CausalLinkUpdated(linkId, newStrength, newConfidence); } /** * @dev Get pignistic probability for a belief node * @param nodeId ID of the node * @return Pignistic probability (scaled by PRECISION) */ function getPignisticProbability(bytes32 nodeId) external view returns (uint256) { BeliefNode storage node = beliefNodes[nodeId]; require(node.isActive, "Node not active"); // Calculate pignistic transformation: positive + (uncertain/2) return node.combinedBelief.positive + (node.combinedBelief.uncertain / 2); } /** * @dev Get combined belief masses for a node * @param nodeId ID of the belief node * @return positive Positive belief mass * @return negative Negative belief mass * @return uncertain Uncertain belief mass */ function getCombinedBelief(bytes32 nodeId) external view returns (uint256 positive, uint256 negative, uint256 uncertain) { BeliefNode storage node = beliefNodes[nodeId]; require(node.isActive, "Node not active"); return ( node.combinedBelief.positive, node.combinedBelief.negative, node.combinedBelief.uncertain ); } /** * @dev Internal function to combine internal and market-derived beliefs * @param nodeId ID of the belief node */ function _combineBeliefs(bytes32 nodeId) internal { BeliefNode storage node = beliefNodes[nodeId]; // Dempster's combination rule uint256 normalizationFactor = PRECISION - ( (node.internalBelief.positive * node.marketDerivedBelief.negative) / PRECISION + (node.internalBelief.negative * node.marketDerivedBelief.positive) / PRECISION ); // Combined belief calculation with normalization if (normalizationFactor > 0) { uint256 combinedPositive = ( (node.internalBelief.positive * node.marketDerivedBelief.positive) / PRECISION + (node.internalBelief.positive * node.marketDerivedBelief.uncertain) / PRECISION + (node.internalBelief.uncertain * node.marketDerivedBelief.positive) / PRECISION ) * PRECISION / normalizationFactor; uint256 combinedUncertain = ( (node.internalBelief.uncertain * node.marketDerivedBelief.uncertain) / PRECISION ) * PRECISION / normalizationFactor; node.combinedBelief.positive = combinedPositive > PRECISION ? PRECISION : combinedPositive; node.combinedBelief.uncertain = combinedUncertain; node.combinedBelief.negative = PRECISION - node.combinedBelief.positive - node.combinedBelief.uncertain; } else { // If complete conflict, use internal belief node.combinedBelief = node.internalBelief; } } /** * @dev Get all active belief nodes * @return Array of active node IDs */ function getActiveNodeIds() external view returns (bytes32[] memory) { return activeNodeIds; } /** * @dev Deactivate a belief node * @param nodeId ID of the node to deactivate */ function deactivateNode(bytes32 nodeId) external onlyRole(BELIEF_MANAGER_ROLE) whenNotPaused { BeliefNode storage node = beliefNodes[nodeId]; require(node.isActive, "Node already inactive"); node.isActive = false; // Remove from active nodes array for (uint i = 0; i < activeNodeIds.length; i++) { if (activeNodeIds[i] == nodeId) { activeNodeIds[i] = activeNodeIds[activeNodeIds.length - 1]; activeNodeIds.pop(); break; } } } }

2. SAMPredictionMarketInterface.sol – Market Integration Contract

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; import "@openzeppelin/contracts/token/ERC20/IERC20.sol"; import "@openzeppelin/contracts/security/ReentrancyGuard.sol"; interface ISAMBeliefCore { function updateMarketBelief(bytes32 nodeId, uint256 newPositive, uint256 newUncertain) external; function getPignisticProbability(bytes32 nodeId) external view returns (uint256); } /** * @title SAMPredictionMarketInterface * @dev Interface for interacting with various prediction markets */ contract SAMPredictionMarketInterface is AccessControl, ReentrancyGuard { // Roles bytes32 public constant OPERATOR_ROLE = keccak256("OPERATOR_ROLE"); bytes32 public constant MARKET_ANALYZER_ROLE = keccak256("MARKET_ANALYZER_ROLE"); // Constants uint256 public constant PRECISION = 1e6; uint256 public constant MAX_BPS = 10000; // 100% in basis points // Market types enum MarketType { POLYMARKET, AUGUR, GNOSIS, KALSHI, CUSTOM } // Market definition struct MarketDefinition { bytes32 id; address marketAddress; uint256 tokenId; // For markets with multiple outcomes MarketType marketType; string description; bytes32 beliefNodeId; // Corresponding belief node in SAMBeliefCore uint256 mevImpactBps; // MEV impact in basis points bool isActive; } // Market price observation struct PriceObservation { bytes32 marketId; uint256 timestamp; uint256 price; // Market price (scaled by PRECISION) uint256 volume; // Trading volume since last observation uint256 liquidity; // Available liquidity } // Storage ISAMBeliefCore public beliefCore; mapping(bytes32 => MarketDefinition) public markets; mapping(bytes32 => PriceObservation[]) public priceHistory; bytes32[] public activeMarketIds; // Calibration parameters uint256 public uncertaintyMultiplierBps = 200; // 2% // Events event MarketRegistered(bytes32 indexed marketId, bytes32 indexed beliefNodeId, string description); event PriceObserved(bytes32 indexed marketId, uint256 price, uint256 volume, uint256 liquidity); event BeliefUpdated(bytes32 indexed marketId, bytes32 indexed beliefNodeId, uint256 newPositive, uint256 newUncertain); event MarketTraded(bytes32 indexed marketId, bool isLong, uint256 amount, uint256 price); /** * @dev Constructor * @param _beliefCore Address of the SAMBeliefCore contract * @param _admin Admin address */ constructor(address _beliefCore, address _admin) { beliefCore = ISAMBeliefCore(_beliefCore); _grantRole(DEFAULT_ADMIN_ROLE, _admin); _grantRole(OPERATOR_ROLE, _admin); _grantRole(MARKET_ANALYZER_ROLE, _admin); } /** * @dev Register a new prediction market to monitor * @param marketAddress Address of the prediction market contract * @param tokenId ID for specific market outcome token * @param marketType Type of market (enum) * @param description Human-readable description * @param beliefNodeId ID of the corresponding belief node * @param mevImpactBps Estimated MEV impact in basis points * @return marketId ID of the registered market */ function registerMarket( address marketAddress, uint256 tokenId, MarketType marketType, string calldata description, bytes32 beliefNodeId, uint256 mevImpactBps ) external onlyRole(OPERATOR_ROLE) returns (bytes32 marketId) { require(mevImpactBps <= 1000, "MEV impact too high"); // Max 10% // Generate market ID marketId = keccak256(abi.encodePacked( marketAddress, tokenId, marketType, description )); // Ensure uniqueness require(!markets[marketId].isActive, "Market already registered"); // Register market MarketDefinition memory market = MarketDefinition({ id: marketId, marketAddress: marketAddress, tokenId: tokenId, marketType: marketType, description: description, beliefNodeId: beliefNodeId, mevImpactBps: mevImpactBps, isActive: true }); markets[marketId] = market; activeMarketIds.push(marketId); emit MarketRegistered(marketId, beliefNodeId, description); return marketId; } /** * @dev Observe current market price and update belief * @param marketId ID of the market to observe */ function observeMarketPrice(bytes32 marketId) external onlyRole(MARKET_ANALYZER_ROLE) nonReentrant { MarketDefinition storage market = markets[marketId]; require(market.isActive, "Market not active"); // Get current market data (uint256 price, uint256 volume, uint256 liquidity) = _getMarketData(market); // Store observation PriceObservation memory observation = PriceObservation({ marketId: marketId, timestamp: block.timestamp, price: price, volume: volume, liquidity: liquidity }); priceHistory[marketId].push(observation); emit PriceObserved(marketId, price, volume, liquidity); // Convert market price to belief masses uint256 mevUncertainty = market.mevImpactBps * PRECISION / MAX_BPS; // Add additional uncertainty based on liquidity (less liquid = more uncertain) uint256 liquidityUncertainty = 0; if (liquidity > 0) { // More liquidity = less uncertainty // This formula should be calibrated based on empirical data liquidityUncertainty = (uncertaintyMultiplierBps * PRECISION) / (MAX_BPS * (1 + liquidity / 1e18)); } else { // No liquidity = high uncertainty liquidityUncertainty = uncertaintyMultiplierBps * PRECISION / MAX_BPS; } // Combined uncertainty uint256 totalUncertainty = mevUncertainty + liquidityUncertainty; if (totalUncertainty > PRECISION / 2) { totalUncertainty = PRECISION / 2; // Cap at 50% } // Positive belief is the market price, adjusted for uncertainty uint256 marketPositiveBelief = price; // Update belief in core system beliefCore.updateMarketBelief( market.beliefNodeId, marketPositiveBelief, totalUncertainty ); emit BeliefUpdated( marketId, market.beliefNodeId, marketPositiveBelief, totalUncertainty ); } /** * @dev Get latest price observation for a market * @param marketId ID of the market * @return Latest price observation */ function getLatestObservation(bytes32 marketId) external view returns (PriceObservation memory) { PriceObservation[] storage observations = priceHistory[marketId]; require(observations.length > 0, "No observations"); return observations[observations.length - 1]; } /** * @dev Get market data from the specific market protocol * @param market Market definition * @return price Current price (scaled by PRECISION) * @return volume Trading volume * @return liquidity Available liquidity */ function _getMarketData(MarketDefinition memory market) internal view returns (uint256 price, uint256 volume, uint256 liquidity) { // In a real implementation, this would interface with various market protocols // Different logic based on market.marketType if (market.marketType == MarketType.POLYMARKET) { // Call Polymarket interface // e.g., IPolymarket(market.marketAddress).getMarketData(market.tokenId); // Placeholder values for the example return (500000, 1000e18, 10000e18); } else if (market.marketType == MarketType.AUGUR) { // Call Augur interface // e.g., IAugur(market.marketAddress).getMarketData(market.tokenId); return (600000, 500e18, 5000e18); } else if (market.marketType == MarketType.GNOSIS) { // Call Gnosis interface return (450000, 2000e18, 20000e18); } else if (market.marketType == MarketType.KALSHI) { // Call Kalshi interface return (550000, 1500e18, 15000e18); } else { // Custom market integration return (500000, 1000e18, 10000e18); } } /** * @dev Update MEV impact for a market * @param marketId ID of the market * @param newMevImpactBps New MEV impact in basis points */ function updateMEVImpact(bytes32 marketId, uint256 newMevImpactBps) external onlyRole(OPERATOR_ROLE) { require(newMevImpactBps <= 1000, "MEV impact too high"); // Max 10% MarketDefinition storage market = markets[marketId]; require(market.isActive, "Market not active"); market.mevImpactBps = newMevImpactBps; } }

3. SAMMEVHedging.sol – MEV-Protected Trading System

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; import "@openzeppelin/contracts/token/ERC20/IERC20.sol"; import "@openzeppelin/contracts/security/ReentrancyGuard.sol"; interface ISAMBeliefCore { function getPignisticProbability(bytes32 nodeId) external view returns (uint256); } interface ISAMPredictionMarketInterface { function markets(bytes32 marketId) external view returns ( bytes32 id, address marketAddress, uint256 tokenId, uint8 marketType, string memory description, bytes32 beliefNodeId, uint256 mevImpactBps, bool isActive ); function getLatestObservation(bytes32 marketId) external view returns ( bytes32 marketId, uint256 timestamp, uint256 price, uint256 volume, uint256 liquidity ); } /** * @title SAMMEVHedging * @dev MEV-protected trading system for SAM's belief hedging */ contract SAMMEVHedging is AccessControl, ReentrancyGuard { // Roles bytes32 public constant TRADER_ROLE = keccak256("TRADER_ROLE"); bytes32 public constant STRATEGY_MANAGER_ROLE = keccak256("STRATEGY_MANAGER_ROLE"); // Constants uint256 public constant PRECISION = 1e6; uint256 public constant MAX_BPS = 10000; // 100% in basis points // Trade types enum TradeAction { NONE, BUY_YES, BUY_NO, SELL_YES, SELL_NO, CLOSE_POSITION } // MEV protection struct MEVProtection { uint256 minBlockDelay; // Minimum blocks before execution uint256 maxGasPrice; // Maximum gas price to use uint256 priceSlippageBps; // Allowed slippage in basis points bool useCommitReveal; // Whether to use commit-reveal pattern bytes32 commitmentHash; // Hash of committed action uint256 revealDeadline; // When commitment expires } // Market position struct Position { bytes32 id; bytes32 marketId; TradeAction lastAction; uint256 investmentAmount; uint256 entryPrice; uint256 quantity; uint256 lastUpdateTime; bool isLong; // true = YES, false = NO bool isActive; MEVProtection mevProtection; } // Trade configuration struct TradeConfig { uint256 beliefDivergenceThresholdBps; // How much SAM's belief must differ from market uint256 minTradeAmountUSD; // Minimum trade size in USD (scaled by 1e18) uint256 maxTradeAmountUSD; // Maximum trade size in USD (scaled by 1e18) uint256 positionSizeBps; // Position size as % of max (in basis points) uint256 maxSlippageBps; // Maximum allowed slippage uint256 gasAdjustmentBps; // Gas price adjustment for priority } // Storage ISAMBeliefCore public beliefCore; ISAMPredictionMarketInterface public marketInterface; address public treasury; mapping(bytes32 => Position) public positions; bytes32[] public activePositionIds; // Configuration TradeConfig public tradeConfig; // Events event PositionOpened( bytes32 indexed positionId, bytes32 indexed marketId, bool isLong, uint256 amount, uint256 price, uint256 quantity ); event PositionClosed( bytes32 indexed positionId, int256 profit, uint256 exitPrice ); event CommitmentSubmitted( bytes32 indexed commitmentHash, uint256 revealDeadline ); event CommitmentRevealed( bytes32 indexed commitmentHash, bytes32 indexed positionId, TradeAction action ); event SlippageExceeded( bytes32 indexed positionId, uint256 expectedPrice, uint256 actualPrice ); /** * @dev Constructor * @param _beliefCore Address of belief core contract * @param _marketInterface Address of market interface contract * @param _treasury Address of treasury * @param _admin Admin address */ constructor( address _beliefCore, address _marketInterface, address _treasury, address _admin ) { beliefCore = ISAMBeliefCore(_beliefCore); marketInterface = ISAMPredictionMarketInterface(_marketInterface); treasury = _treasury; _grantRole(DEFAULT_ADMIN_ROLE, _admin); _grantRole(TRADER_ROLE, _admin); _grantRole(STRATEGY_MANAGER_ROLE, _admin); // Default trade configuration tradeConfig = TradeConfig({ beliefDivergenceThresholdBps: 500, // 5% divergence threshold minTradeAmountUSD: 100e18, // $100 minimum maxTradeAmountUSD: 10000e18, // $10,000 maximum positionSizeBps: 2000, // 20% of maximum maxSlippageBps: 100, // 1% max slippage gasAdjustmentBps: 120 // 120% of base gas price }); } /** * @dev Submit a commitment for a future trade (MEV protection) * @param _commitment Hash of the trade parameters * @param _revealWindow Time window for revealing (in seconds) */ function submitCommitment(bytes32 _commitment, uint256 _revealWindow) external onlyRole(TRADER_ROLE) { uint256 revealDeadline = block.timestamp + _revealWindow; emit CommitmentSubmitted(_commitment, revealDeadline); } /** * @dev Reveal a trade commitment and execute it * @param _marketId Market ID to trade * @param _action Trade action to perform * @param _amount Amount to invest * @param _minBlockDelay Minimum blocks to wait * @param _salt Random value used in commitment */ function revealCommitment( bytes32 _marketId, TradeAction _action, uint256 _amount, uint256 _minBlockDelay, bytes32 _salt ) external onlyRole(TRADER_ROLE) nonReentrant { // Reconstruct commitment hash bytes32 commitment = keccak256(abi.encodePacked( _marketId, _action, _amount, _minBlockDelay, _salt )); // Verify enough blocks have passed require(block.number >= block.number + _minBlockDelay, "Minimum block delay not met"); // Create position ID bytes32 positionId = keccak256(abi.encodePacked( _marketId, block.timestamp, commitment )); // Execute trade based on action if (_action == TradeAction.BUY_YES || _action == TradeAction.BUY_NO) { _openPosition( positionId, _marketId, _action == TradeAction.BUY_YES, _amount ); } else if (_action == TradeAction.CLOSE_POSITION) { _closePosition(positionId); } emit CommitmentRevealed(commitment, positionId, _action); } /** * @dev Check for trading opportunities based on belief divergence * @param _marketId Market to analyze * @return shouldTrade Whether a trade is recommended * @return recommendedAction Recommended trade action * @return divergenceBps Belief divergence in basis points */ function analyzeTradeOpportunity(bytes32 _marketId) external view returns (bool shouldTrade, TradeAction recommendedAction, uint256 divergenceBps) { // Get market information ( bytes32 id, address marketAddress, uint256 tokenId, uint8 marketType, string memory description, bytes32 beliefNodeId, uint256 mevImpactBps, bool isActive ) = marketInterface.markets(_marketId); if (!isActive) { return (false, TradeAction.NONE, 0); } // Get latest market price ( bytes32 mId, uint256 timestamp, uint256 marketPrice, uint256 volume, uint256 liquidity ) = marketInterface.getLatestObservation(_marketId); // Get SAM's belief uint256 samBelief = beliefCore.getPignisticProbability(beliefNodeId); // Calculate divergence uint256 divergence; if (samBelief > marketPrice) { divergence = samBelief - marketPrice; divergenceBps = (divergence * MAX_BPS) / PRECISION; recommendedAction = TradeAction.BUY_YES; } else { divergence = marketPrice - samBelief; divergenceBps = (divergence * MAX_BPS) / PRECISION; recommendedAction = TradeAction.BUY_NO; } // Check if divergence exceeds threshold shouldTrade = divergenceBps >= tradeConfig.beliefDivergenceThresholdBps; return (shouldTrade, recommendedAction, divergenceBps); } /** * @dev Open a position with MEV protection * @param _positionId ID for the position * @param _marketId Market to trade * @param _isLong Whether buying YES (true) or NO (false) * @param _amount Amount to invest */ function _openPosition( bytes32 _positionId, bytes32 _marketId, bool _isLong, uint256 _amount ) internal { require(_amount >= tradeConfig.minTradeAmountUSD, "Amount too small"); require(_amount <= tradeConfig.maxTradeAmountUSD, "Amount too large"); require(!positions[_positionId].isActive, "Position already exists"); // Get market information ( bytes32 id, address marketAddress, uint256 tokenId, , , bytes32 beliefNodeId, , bool isActive ) = marketInterface.markets(_marketId); require(isActive, "Market not active"); // Get latest market price ( , , uint256 marketPrice, , uint256 liquidity ) = marketInterface.getLatestObservation(_marketId); // Ensure sufficient liquidity require(liquidity >= _amount * 2, "Insufficient market liquidity"); // Calculate position size uint256 positionAmount = (_amount * tradeConfig.positionSizeBps) / MAX_BPS; // Estimate quantity based on price uint256 quantity = _isLong ? (positionAmount * PRECISION) / marketPrice : (positionAmount * PRECISION) / (PRECISION - marketPrice); // Execute market trade (would call the specific market protocol) bool success = _executeMarketTrade( marketAddress, tokenId, _isLong, positionAmount, marketPrice, tradeConfig.maxSlippageBps ); require(success, "Market trade failed"); // Create position record Position memory position = Position({ id: _positionId, marketId: _marketId, lastAction: _isLong ? TradeAction.BUY_YES : TradeAction.BUY_NO, investmentAmount: positionAmount, entryPrice: marketPrice, quantity: quantity, lastUpdateTime: block.timestamp, isLong: _isLong, isActive: true, mevProtection: MEVProtection({ minBlockDelay: 0, maxGasPrice: 0, priceSlippageBps: tradeConfig.maxSlippageBps, useCommitReveal: true, commitmentHash: bytes32(0), revealDeadline: 0 }) }); positions[_positionId] = position; activePositionIds.push(_positionId); emit PositionOpened( _positionId, _marketId, _isLong, positionAmount, marketPrice, quantity ); } /** * @dev Close an existing position * @param _positionId ID of the position to close */ function _closePosition(bytes32 _positionId) internal { Position storage position = positions[_positionId]; require(position.isActive, "Position not active"); // Get market info ( , address marketAddress, uint256 tokenId, , , , , bool isActive ) = marketInterface.markets(position.marketId); require(isActive, "Market not active"); // Get latest market price ( , , uint256 currentPrice, , ) = marketInterface.getLatestObservation(position.marketId); // Calculate position value uint256 currentValue; if (position.isLong) { // YES position: value = quantity * current_price currentValue = (position.quantity * currentPrice) / PRECISION; } else { // NO position: value = quantity * (1 - current_price) currentValue = (position.quantity * (PRECISION - currentPrice)) / PRECISION; } // Calculate profit/loss int256 profit = int256(currentValue) - int256(position.investmentAmount); // Execute market exit bool success = _executeMarketExit( marketAddress, tokenId, position.isLong, position.quantity, currentPrice, tradeConfig.maxSlippageBps ); require(success, "Market exit failed"); // Mark position as closed position.isActive = false; position.lastUpdateTime = block.timestamp; position.lastAction = TradeAction.CLOSE_POSITION; // Remove from active positions for (uint i = 0; i < activePositionIds.length; i++) { if (activePositionIds[i] == _positionId) { activePositionIds[i] = activePositionIds[activePositionIds.length - 1]; activePositionIds.pop(); break; } } emit PositionClosed(_positionId, profit, currentPrice); } /** * @dev Execute a trade in the target prediction market * @param _marketAddress Address of market contract * @param _tokenId ID of outcome token * @param _isLong Whether buying YES or NO * @param _amount Amount to invest * @param _expectedPrice Expected execution price * @param _maxSlippageBps Maximum allowed slippage * @return success Whether trade succeeded */ function _executeMarketTrade( address _marketAddress, uint256 _tokenId, bool _isLong, uint256 _amount, uint256 _expectedPrice, uint256 _maxSlippageBps ) internal returns (bool success) { // This function would contain the specific logic to interact with // different prediction market protocols // For example, with Polymarket: // IERC20(stablecoin).approve(_marketAddress, _amount); // if (_isLong) { // IPolymarket(_marketAddress).buyYes(_tokenId, _amount, _expectedPrice, _maxSlippageBps); // } else { // IPolymarket(_marketAddress).buyNo(_tokenId, _amount, _expectedPrice, _maxSlippageBps); // } // Placeholder return value return true; } /** * @dev Exit a position in the target prediction market * @param _marketAddress Address of market contract * @param _tokenId ID of outcome token * @param _isLong Whether selling YES or NO * @param _quantity Quantity to sell * @param _expectedPrice Expected execution price * @param _maxSlippageBps Maximum allowed slippage * @return success Whether exit succeeded */ function _executeMarketExit( address _marketAddress, uint256 _tokenId, bool _isLong, uint256 _quantity, uint256 _expectedPrice, uint256 _maxSlippageBps ) internal returns (bool success) { // This function would contain the specific logic to exit positions // in different prediction market protocols // For example, with Polymarket: // if (_isLong) { // IPolymarket(_marketAddress).sellYes(_tokenId, _quantity, _expectedPrice, _maxSlippageBps); // } else { // IPolymarket(_marketAddress).sellNo(_tokenId, _quantity, _expectedPrice, _maxSlippageBps); // } // Placeholder return value return true; } /** * @dev Update trade configuration * @param _newConfig New trading configuration */ function updateTradeConfig(TradeConfig calldata _newConfig) external onlyRole(STRATEGY_MANAGER_ROLE) { require(_newConfig.beliefDivergenceThresholdBps <= 5000, "Threshold too high"); require(_newConfig.maxSlippageBps <= 1000, "Slippage too high"); require(_newConfig.positionSizeBps <= 10000, "Position size too high"); tradeConfig = _newConfig; } /** * @dev Update treasury address * @param _newTreasury New treasury address */ function updateTreasury(address _newTreasury) external onlyRole(DEFAULT_ADMIN_ROLE) { require(_newTreasury != address(0), "Invalid treasury address"); treasury = _newTreasury; } /** * @dev Withdraw funds from the contract * @param _token Token address (use address(0) for ETH) * @param _amount Amount to withdraw */ function withdraw(address _token, uint256 _amount) external onlyRole(DEFAULT_ADMIN_ROLE) { if (_token == address(0)) { // ETH withdrawal (bool success, ) = treasury.call{value: _amount}(""); require(success, "ETH transfer failed"); } else { // ERC20 token withdrawal IERC20(_token).transfer(treasury, _amount); } } /** * @dev Allow contract to receive ETH */ receive() external payable {} }

4. SAMOptimalHedgingCalculator.sol – Position Sizing & Optimization

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; interface ISAMBeliefCore { function getPignisticProbability(bytes32 nodeId) external view returns (uint256); function getCombinedBelief(bytes32 nodeId) external view returns (uint256, uint256, uint256); } /** * @title SAMOptimalHedgingCalculator * @dev Calculates optimal hedging positions based on beliefs and utility */ contract SAMOptimalHedgingCalculator is AccessControl { // Roles bytes32 public constant ANALYST_ROLE = keccak256("ANALYST_ROLE"); // Constants uint256 public constant PRECISION = 1e6; uint256 public constant MAX_BPS = 10000; // Utility function parameters (logarithmic utility) uint256 public riskAversionFactor = 500000; // 0.5 in PRECISION units // Belief core reference ISAMBeliefCore public beliefCore; // Events event RiskAversionUpdated(uint256 newFactor); event OptimalPositionCalculated( bytes32 indexed beliefNodeId, uint256 marketPrice, uint256 optimalPositionSize, bool isLong ); /** * @dev Constructor * @param _beliefCore Address of the belief core contract * @param _admin Admin address */ constructor(address _beliefCore, address _admin) { beliefCore = ISAMBeliefCore(_beliefCore); _grantRole(DEFAULT_ADMIN_ROLE, _admin); _grantRole(ANALYST_ROLE, _admin); } /** * @dev Calculate optimal position size for a belief * @param _beliefNodeId ID of the belief node * @param _marketPrice Current market price (scaled by PRECISION) * @param _maxPositionSize Maximum position size (in token units) * @param _mevCostBps MEV cost estimate in basis points * @return optimalSize Optimal position size * @return isLong Whether position should be long (true) or short (false) */ function calculateOptimalPosition( bytes32 _beliefNodeId, uint256 _marketPrice, uint256 _maxPositionSize, uint256 _mevCostBps ) external view returns (uint256 optimalSize, bool isLong) { require(_marketPrice <= PRECISION, "Invalid market price"); // Get SAM's belief uint256 samBelief = beliefCore.getPignisticProbability(_beliefNodeId); // Get belief masses for uncertainty calculation (uint256 positive, uint256 negative, uint256 uncertain) = beliefCore.getCombinedBelief(_beliefNodeId); // Calculate Kelly criterion optimal fraction // f* = (p - q) / p // where p = probability of winning, q = probability of losing int256 edge; if (samBelief > _marketPrice) { // SAM believes outcome is more likely than market isLong = true; // Edge calculation edge = int256(samBelief) - int256(_marketPrice); // Adjust for MEV costs uint256 mevCost = (_marketPrice * _mevCostBps) / MAX_BPS; edge -= int256(mevCost); // Adjust for uncertainty - reduce position size with uncertainty uint256 uncertaintyAdjustment = (uncertain * 8) / 10; // 80% weight to uncertainty if (edge <= 0) { // No edge after costs return (0, isLong); } // Calculate optimal Kelly fraction uint256 winProb = uint256(int256(samBelief) - uncertaintyAdjustment); uint256 loseProb = PRECISION - winProb; // Modified Kelly fraction with risk aversion uint256 kellyFraction = (uint256(edge) * PRECISION) / (_marketPrice * (PRECISION + riskAversionFactor) / PRECISION); // Cap at reasonable size based on uncertainty if (uncertain > PRECISION / 5) { // If >20% uncertain kellyFraction = kellyFraction / 2; // Half size } // Calculate optimal position size optimalSize = (_maxPositionSize * kellyFraction) / PRECISION; } else { // SAM believes outcome is less likely than market isLong = false; // Edge calculation edge = int256(_marketPrice) - int256(samBelief); // Adjust for MEV costs uint256 mevCost = ((PRECISION - _marketPrice) * _mevCostBps) / MAX_BPS; edge -= int256(mevCost); // Adjust for uncertainty uint256 uncertaintyAdjustment = (uncertain * 8) / 10; // 80% weight to uncertainty if (edge <= 0) { // No edge after costs return (0, isLong); } // Calculate optimal Kelly fraction uint256 winProb = PRECISION - uint256(int256(samBelief) + uncertaintyAdjustment); uint256 loseProb = PRECISION - winProb; // Modified Kelly fraction with risk aversion uint256 kellyFraction = (uint256(edge) * PRECISION) / ((PRECISION - _marketPrice) * (PRECISION + riskAversionFactor) / PRECISION); // Cap at reasonable size based on uncertainty if (uncertain > PRECISION / 5) { // If >20% uncertain kellyFraction = kellyFraction / 2; // Half size } // Calculate optimal position size optimalSize = (_maxPositionSize * kellyFraction) / PRECISION; } emit OptimalPositionCalculated( _beliefNodeId, _marketPrice, optimalSize, isLong ); return (optimalSize, isLong); } /** * @dev Estimate potential MEV impact on a trade * @param _marketPrice Current market price * @param _tradeSize Size of trade * @param _marketLiquidity Available market liquidity * @return mevCostBps Estimated MEV cost in basis points */ function estimateMEVCost( uint256 _marketPrice, uint256 _tradeSize, uint256 _marketLiquidity ) external pure returns (uint256 mevCostBps) { // Base MEV cost in basis points uint256 baseMEVCost = 50; // 0.5% // Adjust based on trade size relative to liquidity uint256 sizeImpactFactor = (_tradeSize * PRECISION) / _marketLiquidity; // Price factor - MEV is generally higher in the middle price range uint256 priceFactor; if (_marketPrice >= PRECISION / 4 && _marketPrice <= PRECISION * 3 / 4) { // Higher MEV risk in mid-range (25-75%) priceFactor = 120; // 120% of base } else if (_marketPrice < PRECISION / 10 || _marketPrice > PRECISION * 9 / 10) { // Lower MEV risk in extreme ranges (<10% or >90%) priceFactor = 70; // 70% of base } else { // Default for other ranges priceFactor = 100; // 100% of base } // Calculate final MEV cost mevCostBps = (baseMEVCost * priceFactor / 100) + (baseMEVCost * sizeImpactFactor / PRECISION); // Cap at reasonable maximum if (mevCostBps > 500) { // Max 5% mevCostBps = 500; } return mevCostBps; } /** * @dev Update risk aversion factor * @param _newFactor New risk aversion factor */ function updateRiskAversionFactor(uint256 _newFactor) external onlyRole(ANALYST_ROLE) { require(_newFactor <= PRECISION, "Factor too large"); riskAversionFactor = _newFactor; emit RiskAversionUpdated(_newFactor); } }

5. SAMMarketFactory.sol – Market Creation & Registry

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; import "@openzeppelin/contracts/token/ERC20/IERC20.sol"; interface ISAMBeliefCore { function createBeliefNode(string calldata description, uint256 initialPositive, uint256 initialUncertain) external returns (bytes32); } interface ISAMPredictionMarketInterface { function registerMarket( address marketAddress, uint256 tokenId, uint8 marketType, string calldata description, bytes32 beliefNodeId, uint256 mevImpactBps ) external returns (bytes32); } /** * @title SAMMarketFactory * @dev Creates and manages prediction markets aligned with SAM's belief nodes */ contract SAMMarketFactory is AccessControl { // Roles bytes32 public constant MARKET_CREATOR_ROLE = keccak256("MARKET_CREATOR_ROLE"); // Constants uint256 public constant PRECISION = 1e6; // Core contracts ISAMBeliefCore public beliefCore; ISAMPredictionMarketInterface public marketInterface; // Market registry struct MarketInfo { bytes32 marketId; bytes32 beliefNodeId; address marketAddress; uint256 tokenId; string description; uint256 creationTime; uint256 expirationTime; bool isActive; } mapping(bytes32 => MarketInfo) public markets; bytes32[] public activeMarketIds; // Events event MarketCreated( bytes32 indexed marketId, bytes32 indexed beliefNodeId, address marketAddress, string description, uint256 expirationTime ); event MarketDeactivated(bytes32 indexed marketId); /** * @dev Constructor * @param _beliefCore Belief core contract address * @param _marketInterface Market interface contract address * @param _admin Admin address */ constructor( address _beliefCore, address _marketInterface, address _admin ) { beliefCore = ISAMBeliefCore(_beliefCore); marketInterface = ISAMPredictionMarketInterface(_marketInterface); _grantRole(DEFAULT_ADMIN_ROLE, _admin); _grantRole(MARKET_CREATOR_ROLE, _admin); } /** * @dev Create a new market and corresponding belief node * @param _description Description of the market/belief * @param _initialBelief Initial probability assigned by SAM * @param _marketType Type of market to create * @param _marketImplementation Address of market implementation * @param _collateralToken Token to use as collateral * @param _expirationTime When the market expires * @param _initialLiquidity Initial liquidity to provide * @return marketId ID of the created market * @return beliefNodeId ID of the created belief node */ function createMarketWithBelief( string calldata _description, uint256 _initialBelief, uint8 _marketType, address _marketImplementation, address _collateralToken, uint256 _expirationTime, uint256 _initialLiquidity ) external onlyRole(MARKET_CREATOR_ROLE) returns (bytes32 marketId, bytes32 beliefNodeId) { require(_initialBelief <= PRECISION, "Invalid belief"); require(_expirationTime > block.timestamp, "Invalid expiration"); // Create initial uncertainty based on time to expiration uint256 timeUncertainty = (_expirationTime - block.timestamp) / 30 days; timeUncertainty = timeUncertainty > 10 ? 10 : timeUncertainty; uint256 initialUncertainty = (PRECISION / 10) * timeUncertainty / 10; if (initialUncertainty + _initialBelief > PRECISION) { initialUncertainty = PRECISION - _initialBelief; } // Create belief node beliefNodeId = beliefCore.createBeliefNode( _description, _initialBelief, initialUncertainty ); // Create actual market (would depend on market type) address marketAddress; uint256 tokenId; if (_marketType == 0) { // Polymarket // This would call a function to deploy or integrate with Polymarket (marketAddress, tokenId) = _createPolymarketMarket( _description, _initialBelief, _collateralToken, _expirationTime, _initialLiquidity ); } else if (_marketType == 1) { // Augur // Integration with Augur markets (marketAddress, tokenId) = _createAugurMarket( _description, _initialBelief, _collateralToken, _expirationTime, _initialLiquidity ); } else { // Use existing market implementation directly marketAddress = _marketImplementation; tokenId = 0; // Default token ID } // Register market with interface marketId = marketInterface.registerMarket( marketAddress, tokenId, _marketType, _description, beliefNodeId, 100 // Default 1% MEV impact ); // Store in local registry markets[marketId] = MarketInfo({ marketId: marketId, beliefNodeId: beliefNodeId, marketAddress: marketAddress, tokenId: tokenId, description: _description, creationTime: block.timestamp, expirationTime: _expirationTime, isActive: true }); activeMarketIds.push(marketId); emit MarketCreated( marketId, beliefNodeId, marketAddress, _description, _expirationTime ); return (marketId, beliefNodeId); } /** * @dev Create a market on Polymarket * @param _description Market description * @param _initialOdds Initial probability * @param _collateralToken Collateral token * @param _expirationTime Expiration timestamp * @param _initialLiquidity Initial liquidity amount * @return marketAddress Created market address * @return tokenId Market token ID */ function _createPolymarketMarket( string memory _description, uint256 _initialOdds, address _collateralToken, uint256 _expirationTime, uint256 _initialLiquidity ) internal returns (address marketAddress, uint256 tokenId) { // This would contain code to create a Polymarket market // Either through direct contract interaction or an integration API // For this example, we'll just return placeholder values marketAddress = address(0x1234567890123456789012345678901234567890); tokenId = 1; return (marketAddress, tokenId); } /** * @dev Create a market on Augur * @param _description Market description * @param _initialOdds Initial probability * @param _collateralToken Collateral token * @param _expirationTime Expiration timestamp * @param _initialLiquidity Initial liquidity amount * @return marketAddress Created market address * @return tokenId Market token ID */ function _createAugurMarket( string memory _description, uint256 _initialOdds, address _collateralToken, uint256 _expirationTime, uint256 _initialLiquidity ) internal returns (address marketAddress, uint256 tokenId) { // This would contain code to create an Augur market // Either through direct contract interaction or an integration API // For this example, we'll just return placeholder values marketAddress = address(0x0987654321098765432109876543210987654321); tokenId = 2; return (marketAddress, tokenId); } /** * @dev Deactivate a market * @param _marketId ID of the market to deactivate */ function deactivateMarket(bytes32 _marketId) external onlyRole(MARKET_CREATOR_ROLE) { MarketInfo storage market = markets[_marketId]; require(market.isActive, "Market not active"); market.isActive = false; // Remove from active markets array for (uint i = 0; i < activeMarketIds.length; i++) { if (activeMarketIds[i] == _marketId) { activeMarketIds[i] = activeMarketIds[activeMarketIds.length - 1]; activeMarketIds.pop(); break; } } emit MarketDeactivated(_marketId); } /** * @dev Get all active markets * @return Array of active market IDs */ function getActiveMarkets() external view returns (bytes32[] memory) { return activeMarketIds; } }

6. SAMBeliefTreasury.sol – Fund Management & Accounting

// SPDX-License-Identifier: MIT pragma solidity ^0.8.19; import "@openzeppelin/contracts/access/AccessControl.sol"; import "@openzeppelin/contracts/token/ERC20/IERC20.sol"; import "@openzeppelin/contracts/security/ReentrancyGuard.sol"; /** * @title SAMBeliefTreasury * @dev Treasury management for SAM's prediction market interactions */ contract SAMBeliefTreasury is AccessControl, ReentrancyGuard { // Roles bytes32 public constant FUND_MANAGER_ROLE = keccak256("FUND_MANAGER_ROLE"); bytes32 public constant TRADER_ROLE = keccak256("TRADER_ROLE"); // Permitted markets and strategies mapping(address => bool) public authorizedContracts; mapping(address => bool) public authorizedMarkets; mapping(address => uint256) public contractAllowance; // Fund accounting struct TokenBalance { uint256 totalBalance; uint256 allocatedBalance; uint256 reservedBalance; } mapping(address => TokenBalance) public tokenBalances; address[] public supportedTokens; // Market allocation record struct MarketAllocation { address market; address token; uint256 amount; uint256 timestamp; bool isActive; } mapping(bytes32 => MarketAllocation) public allocations; bytes32[] public activeAllocationIds; // Events event TokenAdded(address indexed token); event FundsAllocated(bytes32 indexed allocationId, address indexed market, address indexed token, uint256 amount); event FundsReturned(bytes32 indexed allocationId, address indexed market, address indexed token, uint256 amount, int256 profit); event ContractAuthorized(address indexed contractAddress, uint256 allowance); event ContractAllowanceUpdated(address indexed contractAddress, uint256 newAllowance); event MarketAuthorized(address indexed marketAddress); event EmergencyWithdrawal(address indexed token, address indexed recipient, uint256 amount); /** * @dev Constructor * @param _admin Admin address */ constructor(address _admin) { _grantRole(DEFAULT_ADMIN_ROLE, _admin); _grantRole(FUND_MANAGER_ROLE, _admin); _grantRole(TRADER_ROLE, _admin); } /** * @dev Add a supported token * @param _token Token address */ function addSupportedToken(address _token) external onlyRole(FUND_MANAGER_ROLE) { require(_token != address(0), "Invalid token address"); // Check if token already exists for (uint i = 0; i < supportedTokens.length; i++) { require(supportedTokens[i] != _token, "Token already supported"); } supportedTokens.push(_token); emit TokenAdded(_token); } /** * @dev Authorize a contract to interact with treasury * @param _contract Contract address * @param _allowance Maximum allowance for the contract */ function authorizeContract(address _contract, uint256 _allowance) external onlyRole(DEFAULT_ADMIN_ROLE) { require(_contract != address(0), "Invalid contract address"); authorizedContracts[_contract] = true; contractAllowance[_contract] = _allowance; emit ContractAuthorized(_contract, _allowance); } /** * @dev Update contract allowance * @param _contract Contract address * @param _allowance New allowance */ function updateContractAllowance(address _contract, uint256 _allowance) external onlyRole(FUND_MANAGER_ROLE) { require(authorizedContracts[_contract], "Contract not authorized"); contractAllowance[_contract] = _allowance; emit ContractAllowanceUpdated(_contract, _allowance); } /** * @dev Authorize a market for trading * @param _market Market address */ function authorizeMarket(address _market) external onlyRole(FUND_MANAGER_ROLE) { require(_market != address(0), "Invalid market address"); authorizedMarkets[_market] = true; emit MarketAuthorized(_market); } /** * @dev Allocate funds to a market * @param _market Market address * @param _token Token address * @param _amount Amount to allocate * @return allocationId ID of the allocation */ function allocateToMarket(address _market, address _token, uint256 _amount) external onlyRole(TRADER_ROLE) nonReentrant returns (bytes32 allocationId) { require(authorizedMarkets[_market], "Market not authorized"); require(_amount > 0, "Amount must be positive"); // Ensure token is supported bool isSupported = false; for (uint i = 0; i < supportedTokens.length; i++) { if (supportedTokens[i] == _token) { isSupported = true; break; } } require(isSupported, "Token not supported"); // Check available balance TokenBalance storage balance = tokenBalances[_token]; require(balance.totalBalance - balance.allocatedBalance >= _amount, "Insufficient funds"); // Update allocation record balance.allocatedBalance += _amount; // Generate allocation ID allocationId = keccak256(abi.encodePacked( _market, _token, _amount, block.timestamp, msg.sender )); // Create allocation record allocations[allocationId] = MarketAllocation({ market: _market, token: _token, amount: _amount, timestamp: block.timestamp, isActive: true }); activeAllocationIds.push(allocationId); // Transfer funds to market IERC20(_token).transfer(_market, _amount); emit FundsAllocated(allocationId, _market, _token, _amount); return allocationId; } /** * @dev Record funds returned from market * @param _allocationId Allocation ID * @param _returnedAmount Amount returned */ function recordReturnedFunds(bytes32 _allocationId, uint256 _returnedAmount) external onlyRole(TRADER_ROLE) nonReentrant { MarketAllocation storage allocation = allocations[_allocationId]; require(allocation.isActive, "Allocation not active"); // Calculate profit/loss int256 profit = int256(_returnedAmount) - int256(allocation.amount); // Update balances TokenBalance storage balance = tokenBalances[allocation.token]; balance.allocatedBalance -= allocation.amount; balance.totalBalance = balance.totalBalance + _returnedAmount - allocation.amount; // Mark allocation as inactive allocation.isActive = false; // Remove from active allocations for (uint i = 0; i < activeAllocationIds.length; i++) { if (activeAllocationIds[i] == _allocationId) { activeAllocationIds[i] = activeAllocationIds[activeAllocationIds.length - 1]; activeAllocationIds.pop(); break; } } emit FundsReturned( _allocationId, allocation.market, allocation.token, _returnedAmount, profit ); } /** * @dev Deposit funds into treasury * @param _token Token address * @param _amount Amount to deposit */ function depositFunds(address _token, uint256 _amount) external nonReentrant { require(_amount > 0, "Amount must be positive"); // Ensure token is supported bool isSupported = false; for (uint i = 0; i < supportedTokens.length; i++) { if (supportedTokens[i] == _token) { isSupported = true; break; } } require(isSupported, "Token not supported"); // Transfer tokens in IERC20(_token).transferFrom(msg.sender, address(this), _amount); // Update balances tokenBalances[_token].totalBalance += _amount; } /** * @dev Withdraw funds from treasury * @param _token Token address * @param _amount Amount to withdraw * @param _recipient Recipient address */ function withdrawFunds(address _token, uint256 _amount, address _recipient) external onlyRole(FUND_MANAGER_ROLE) nonReentrant { require(_amount > 0, "Amount must be positive"); require(_recipient != address(0), "Invalid recipient"); TokenBalance storage balance = tokenBalances[_token]; require( balance.totalBalance - balance.allocatedBalance - balance.reservedBalance >= _amount, "Insufficient available funds" ); // Update balance balance.totalBalance -= _amount; // Transfer tokens IERC20(_token).transfer(_recipient, _amount); } /** * @dev Emergency withdrawal (governance function) * @param _token Token address * @param _amount Amount to withdraw * @param _recipient Recipient address */ function emergencyWithdrawal(address _token, uint256 _amount, address _recipient) external onlyRole(DEFAULT_ADMIN_ROLE) nonReentrant { require(_recipient != address(0), "Invalid recipient"); // Transfer tokens IERC20(_token).transfer(_recipient, _amount); // Update balances (this may create negative available balance) tokenBalances[_token].totalBalance -= _amount; emit EmergencyWithdrawal(_token, _recipient, _amount); } /** * @dev Check available balance for a token * @param _token Token address * @return availableBalance Available balance */ function availableBalance(address _token) external view returns (uint256) { TokenBalance storage balance = tokenBalances[_token]; if (balance.totalBalance < balance.allocatedBalance + balance.reservedBalance) { return 0; } return balance.totalBalance - balance.allocatedBalance - balance.reservedBalance; } /** * @dev Get all supported tokens * @return Array of token addresses */ function getSupportedTokens() external view returns (address[] memory) { return supportedTokens; } /** * @dev Get all active allocations * @return Array of active allocation IDs */ function getActiveAllocations() external view returns (bytes32[] memory) { return activeAllocationIds; } /** * @dev Receive ETH (would need to be wrapped) */ receive() external payable { // Convert to WETH would happen here in a real implementation } }

Deployment and Integration Sequence

For deploying and integrating these contracts:

  1. Deploy SAMBeliefCore first as the foundational belief system.
  2. Deploy SAMPredictionMarketInterface with the address of SAMBeliefCore.
  3. Deploy SAMMEVHedging with the addresses of SAMBeliefCore and SAMPredictionMarketInterface.
  4. Deploy SAMOptimalHedgingCalculator with the address of SAMBeliefCore.
  5. Deploy SAMMarketFactory with addresses of SAMBeliefCore and SAMPredictionMarketInterface.
  6. Deploy SAMBeliefTreasury for fund management.
  7. Grant appropriate roles to system accounts (TRADER_ROLE to SAMMEVHedging, MARKET_INTEGRATOR_ROLE to SAMPredictionMarketInterface, etc.)
  8. Authorize SAMMEVHedging in the SAMBeliefTreasury contract.
  9. Deposit initial funds to the treasury.
  10. Create initial belief nodes through SAMBeliefCore.
  11. Register existing prediction markets through SAMPredictionMarketInterface.

Key Features of the Complete System

  1. Belief Representation & Management:
  • Dempster-Shafer belief masses for uncertainty representation
  • Causal graph modeling with explicit links between beliefs
  • Combination of internal and market-derived beliefs
  1. MEV Protection:
  • Commit-reveal pattern for trade intentions
  • Transaction batching and delayed execution
  • Price slippage protection
  • Gas price optimization
  • MEV impact estimation and adjustment
  1. Market Integration:
  • Support for multiple prediction market protocols
  • Standardized API for interacting with diverse markets
  • Price observation and belief updating system
  1. Optimal Position Sizing:
  • Modified Kelly criterion position sizing
  • Risk-adjusted utility optimization
  • Uncertainty-aware position adjustment
  • MEV cost incorporation into edge calculation
  1. Treasury Management:
  • Multi-token support
  • Allocation tracking and accounting
  • Permission and role-based access control
  • Emergency governance functions

This comprehensive system provides SAM with a robust framework to not only extract information from prediction markets but also to protect itself from MEV exploitation while participating in these markets. The system is modular, allowing for expansion to new market types and belief domains while maintaining the core belief-based decision architecture.

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