How Does Liquidity Provision Work?
Robin’s liquidity layer is designed to align long-term capital with market depth, using Uniswap v4’s hook system to provide sophisticated liquidity control while earning yield on idle assets. It enables passive LPs to earn yield and swap fees while maintaining structured exposure to prediction markets.
Core Mechanism: LPs Mint and Seed Markets
Liquidity Providers (LPs) start by minting equal quantities of YES and NO outcome tokens through the Robin Minting Contract. Here's what happens:
LPs deposit stablecoins (e.g. USDC) into a conditional token contract.
The contract mints an equal number of
YESandNOtokens.These tokens are paired into a Uniswap v4 pool, forming the liquidity backbone of the prediction market.
The underlying stablecoins are routed into yield-generating protocols via Robin’s Vault Contract.
LPs earn:
Swap fees from trades (as users speculate on outcomes).
Passive yield on the capital deployed into DeFi strategies (Aave, Compound, Ethena).
This turns LPs into yield-generating market-makers who do not need to actively manage orders — but still benefit from market activity.
Limit Order Book via Uniswap v4 Hooks
Robin uses Uniswap v4 hooks to implement a pseudo-limit order book structure on top of an AMM, which provides the best of both worlds:
Continuous liquidity like an AMM
Structured pricing like an order book
The hooks allow Robin to:
Enforce custom minting rules for LPs (e.g. yield vault share eligibility).
Create price bands where liquidity is concentrated (similar to range orders).
Reward LPs based on their position in the price curve and time of entry.
This enables Robin to support tight bid/ask spreads around prediction token prices — critical for healthy market making.
Yield-Weighted Liquidity Strategy
Robin incorporates time-weighted yield accrual for LPs:
LPs who enter early in the market cycle earn a greater portion of the yield.
A soft cutoff is applied near market resolution to prevent last-minute minting designed to capture yield without providing real liquidity.
Yield is locked to LP tokens, and only redeemable at market settlement.
This mechanism preserves economic integrity and prevents yield arbitrage.
Summary
Robin reimagines liquidity provision for prediction markets:
Predictive liquidity through Uniswap v4 hooks and structured pricing
Capital productivity via vault-deployed yield generation
Aligned incentives between passive LPs and active traders
By combining the granularity of limit orders with the composability of DeFi, Robin creates a sustainable, capital-efficient liquidity layer for future-focused markets.
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