Position Lifecycle
How positions are opened, monitored, hedged, and settled.
This section describes how a leveraged PM position moves from creation to settlement. All user actions occur through the terminal interface. Dripster executes and maintains the underlying synthetic exposure and hedge.
Opening a Position
The user selects:
a supported prediction market
a direction (YES or NO)
a leverage level
The terminal requests a quote from Multiply, passing:
market ID and trader ID
side (YES/NO)
requested leverage
notional size
Multiply evaluates:
current venue price
hedgeability of requested size
required margin
maximum allowable leverage for that market and trader
Multiply returns a firm executable quote that includes:
entry price
required collateral
maximum allowed size (if size was clipped)
position metadata (expiry, settlement rules)
If the user accepts, the terminal submits an execute call.
Dripster:
locks the user’s collateral on Solana
establishes the synthetic leveraged exposure
initiates or adjusts the hedge on the underlying venue
The position becomes active immediately and appears in the terminal’s portfolio view.
Once active, the position is monitored continuously.
As long as the market remains in a fully hedgeable regime, the Hedging Facility maintains the financed hedge and updates exposure in response to user actions, terminal events, or venue conditions.
Position enters hazard window (optional)
A position enters the hazard window when the underlying market reaches a point where the outcome can resolve without passing through intermediate tradable prices.
Then, Multiply computes the remaining financed amount (D) and determines whether the user holds sufficient mark-to-market value to support Soft Carry or, once live, Insured Carry.
If the user cannot support financed exposure at this boundary, the position simply moves to fully paid-for size before hazard, ensuring the user enters hazard solvent but without leverage.
Soft Carry (default until UF launch)
If the user’s economic value exceeds the financed amount, Multiply performs Soft Carry.
Insured Carry (future, UF-enabled)
Once the Underwriting Facility is live, users with sufficient economic value may elect Insured Carry. In this mode, the financed amount is transferred from the Hedging Facility to UF in exchange for a deterministic Resolution Fee.
HF’s financed exposure drops to zero, while UF assumes a capped, pre-priced deficit obligation through settlement. This allows financed exposure to persist through the hazard window under a strictly positive-EV, portfolio-constrained underwriting framework.
Settlement
Market resolves. Multiply closes any remaining hedges, settles the synthetic position, and releases or distributes collateral accordingly.
Terminals receive a final settlement message that includes the outcome, PnL, and position metadata.
User’s portfolio updates immediately on the terminal.
Last updated