Core Mechanics
Conditional Token Wrapping
Polymarket uses the ERC-1155 standard for outcome shares, which are incompatible with most DeFi AMMs.Bayex introduces a trustless Wrapper Contract that locks these ERC-1155 tokens and mints standard ERC-20 tokens 1:1.
Uniswap V4 Integration
We leverage Uniswap V4 to create concentrated liquidity pools for these wrapped outcome tokens.This allows LPs to provide liquidity in specific price ranges (probabilities), dramatically increasing capital efficiency compared to traditional AMMs.
Yield Generation
Trading Fees
LPs earn swap fees every time a user trades against their position. With V4, fees are auto-compounded.
Underlying Yield
(Coming Soon) Collateral parked in Bayex contracts can be deployed to lending protocols like Aave.
No Impermanent Loss*
*If you hold to expiry, the winning outcome redeems 1:1 for collateral, mitigating divergence loss.
Architecture
1
Polymarket (Source)
Polymarket serves as the source of truth for markets and settlement resolution.
2
Bayex Wrapper (Wrap/Unwrap)
Users utilize the Bayex Wrapper to convert their Polymarket ERC-1155 tokens into Bayex ERC-20s.
3
Uniswap V4 (Swap/LP)
These ERC-20s are then used in Uniswap V4 pools for swapping and liquidity provision, managed by Bayex Hooks.
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