Note that the logarithmic market scoring rule comes with a built in method of subsidy (in fact, requires such subsidy), and guarantees that there will always be nonzero liquidity.
Removing fees is of course a valuable and necessary first step. There’s never any reason to do something so self-defeating as deliberately destroying liquidity by imposing fees.
I’ve seen it, and my reaction was “that’s very interesting and clever, I’m glad someone figured that out and wrote it up, but man is that way too complex to actually work.”
Robin has published at least two papers that seem like necessary background reading on this topic:
Logarithmic Market Scoring Rules [2002]
Combinatorial Information Market Design [2003]
Note that the logarithmic market scoring rule comes with a built in method of subsidy (in fact, requires such subsidy), and guarantees that there will always be nonzero liquidity.
Removing fees is of course a valuable and necessary first step. There’s never any reason to do something so self-defeating as deliberately destroying liquidity by imposing fees.
I’ve seen it, and my reaction was “that’s very interesting and clever, I’m glad someone figured that out and wrote it up, but man is that way too complex to actually work.”