Risk and Liquidity

In Phoenix Prediction v1, each operator owns its own player relationship, wallet, liquidity, and counterparty risk. Phoenix provides the market system, but the operator is still responsible for how much exposure it is willing to take.

What Liquidity Means Here

Phoenix markets use automated pricing. As players buy an outcome, its price moves. The liquidity configuration controls how sensitive the price is to trades.

In practical terms:

• Lower liquidity means prices move faster and the market is more sensitive to each bet.
• Higher liquidity means prices move more slowly and the operator may carry more exposure.

Phoenix can help tune this per market type, but the operator should understand the tradeoff before launching high-volume markets.

Exposure Checks

Before promoting a market, ask:

• What is the maximum single-bet size allowed?
• What is the expected maximum total volume?
• Could one outcome attract one-sided demand?
• Is the resolution source reliable enough for the volume?
• Do support and trading teams understand the rule?

Fees

Some markets may include a settlement fee applied to player profit. A player who breaks even or loses does not pay a profit-based settlement fee.

Before changing fees:

• Confirm the fee is allowed in the operator's jurisdiction.
• Confirm player-facing copy is clear.
• Test quotes so the buy flow shows expected gross and net outcomes.
• Do not change fees casually on markets that players already understand differently.

When to Use Smaller Markets

Start smaller when:

• The market format is new to your players.
• The resolution source has not been used in production before.
• The market wording could create disputes.
• You are launching a new category or event type.
• Settlement monitoring is still new for the team.

Warning Signals

Investigate quickly when:

• Bet failure rates spike.
• One market is taking far more volume than expected.
• Players are asking what a market means.
• Comments show confusion about resolution.
• A data provider or event source changes its result timing.

The best risk control is usually a clear market rule before launch. The second best is closing the market early when the real-world situation no longer matches the original rule.