1/2 Azuro Explained: Fat Platform for Onchain Prediction Markets As an onchain prediction layer, @azuroprotocol offers a modular smart contract infrastructure that supports a plug-and-play solution for blockchains, on the one hand, and prediction apps, on the other. It functions as a bridge between the two and allows for a seamless connection to the most in-demand real-world prediction markets. What does it mean and how does it work? 👇🧵 🔵 Azuro review 🔵 Azuro is an infrastructure/liquidity layer for forecasts on the blockchain. It uses a new liquidity pool design, a liquidity tree that creates and maintains market liquidity. Azuro supports thousands of sports markets and other games, as well as a rich set of features that can be used by any user without permission to create various applications, embedded integrations or derivative products. @azuroprotocol attracts customers from two sides: - From the side of a solution that is focused on consumers (for projects), it offers them a ready-made boxed solution for launching betting platforms, using liquidity pools and optimized risk management. - On the part of the blockchain, Azuro offers users and projects transparency and provability of data, transfer of transactions to the blockchain and the use of liquidity pools in various chains. It is built on EVM-compatible blockchains and consists of several smart contracts that handle various aspects of the forecasting process, such as liquidity pools, coefficients, real-time bets and payouts. The protocol uses a hybrid oracle/automated market maker solution to determine the coefficients of various results and ensure the integrity and transparency of the process. To begin with, it is necessary to clarify the differences between the various sections of "Azuro": 🔹 Azuro Protocol: A set of updatable smart contracts that together create a protocol that can be used without permission to create applications and forecasting products with ERC-20 tokens on blockchains compatible with EVM. 🔹 Azuro Components: Web components that allow you to quickly and easily create applications based on the Azuro protocol. The interface is just one of many ways to create a DApp. 🔹 Azuro DAO: A management system for managing the Azuro protocol. It is expected that the system will be translated and enabled by the AZUR token after the token is launched. At the same time, it is worth noting that Azuro DAO expressly disclaims any responsibility for the activities of interface operators who connect their platform to Azuro. Further, Azuro consists of the following participants in the protocol: 🔹 Players can access markets through websites, applications or widgets (known as "Frontends") that connect to Azuro to provide services to end users. 🔹 Frontends can be applications, widgets, tools, integrations, or even standalone products that take advantage of the liquidity provided by the liquidity pools created based on the Azuro solution and provide a user interface for user interaction. The frontend gets access to the liquidity pools created based on the Azuro solution, outsources risk management and can simply focus on user interaction and UX development. 🔹 Liquidity Providers: Liquidity pools earn through spreads built into odds that players can predict. The profit of the liquidity pool is the difference between the tokens seeded from the pool into the Conditions and the tokens returned to the pool after these Conditions are resolved. The more players and forecasts there are in the protocol, the higher the probability that the pool will be profitable. That is, the longer the position duration of each LP, the higher the probability that it will bring positive returns. 🔹 A data provider is an entity connected to the Azuro protocol to create and cancel events, create, resolve or cancel conditions, and update coefficients. Data providers are entities that ensure that forecasting conditions are in place and that the probabilities for these conditions are such that the pool generates profit from forecasting over time. Azuro has subgraphs for indexing and organizing data from Azuro smart contracts. These subgraphs are hosted on The Graph hosting service and can be used to query Azuro data. And thanks to this, Azuro is present in chains such as Polygon, Chillz, Gnosis, Arbitrum, Linea and their testnet. 🔵 Architecture 🔵 At the architectural level, Azuro consists of the following components in the form of contracts: 🔹 Factory Contract - is the starting point in Azuro's architecture, allowing for the creation of Liquidity Pools and Betting Engines. Connecting a new blockchain starts with deploying this contract. Using the standard Ethereum token interfaces (ERC721), it can be adapted to any EVM-compatible blockchain. Also, a modular approach allows for different "cores" and "beacons" to be plugged in and updated. Allows customization of core types, liquidity pool settings, and fees, indicating adaptability to different blockchain requirements and use cases. 🔹 LP Contract - The LP contract manages the pools and contains the logic for the betting system, empowering users to engage confidently in the ecosystem. Key functions within this contract handle the creation and cancellation of games, the addition of liquidity, the placing of bets, and the payout processes. 🔹 Access Contract - in Azuro's architecture it is a critical component designed to manage access control to various functionalities within the ecosystem. The contract uses a token-based system where each token represents a role with associated permissions. The binding of roles to contract functions and the assignment of roles to user accounts are central features that enforce the access control logic. 🔹 Prediction Engines - A Prediction Engine (aka Betting Engine) is a collective term for contracts that encompass the logic of creating Conditions, accepting bets, computing payouts for bets, and calculating Affiliate rewards. These contracts are plugged into the Pool by its owner via the Factory, and access to place bets and withdraw payouts is only granted through the LP contract for which it was deployed. For the client side as developers, Azuro offers different levels of solutions: from high-level to low-level for complete development control: