Home › Glossary › LMSR (logarithmic market scoring rule)
The logarithmic market scoring rule is a market-maker formula designed for prediction markets by economist Robin Hanson: it always offers a price and caps how much the market maker can lose.
Order-book exchanges such as Polymarket and Kalshi do not need a scoring rule, because prices come from traders' orders.
AMM (automated market maker) · CLOB (central limit order book) · Liquidity
Order-book exchanges such as Polymarket and Kalshi do not need a scoring rule, because prices come from traders' orders.
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