Price Discovery Process

고지 사항: 이 백서는 영어 버전이 공식 문서입니다. 다른 언어 버전은 참고용입니다。

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Overview

PIPO uses a hybrid price discovery mechanism combining off-chain oracle data with on-chain AMM market dynamics.

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Two-Layer System

Layer 1: Oracle (Fundamental)

Oracle Price = Weighted aggregate of valuation data

Sources:
├── Funding rounds (highest weight)
├── Secondary transactions
├── Third-party estimates
└── Comparable analysis

Layer 2: AMM (Market)

AMM Price = Real-time supply/demand

Determined by:
├── CPMM formula (x * y = k)
├── Trade flow (buyers vs sellers)
├── LP behavior
└── Arbitrage activity

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Price Relationship

Normal Operation

Expected: AMM Price ≈ Oracle Price (±10%)

When aligned:
├── Market efficiently priced
├── Arbitrageurs in balance
└── Normal trading

When diverged:
├── Information asymmetry
├── Temporary supply/demand imbalance
└── Potential arbitrage opportunity

Arbitrage Mechanism

If AMM Price < Oracle Price:
├── Arbitrageurs buy warrants on AMM
├── AMM price increases
└── Converges toward oracle

If AMM Price > Oracle Price:
├── Arbitrageurs sell warrants on AMM
├── AMM price decreases
└── Converges toward oracle

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Settlement Price

Which Price for Settlement?

Context	Price Used
Exercise settlement	Oracle price
Trading	AMM price
LP valuation	AMM price
Reserve calculation	Oracle price

Settlement Methodology

Settlement Price Determination:

Regular Expiry:
├── Oracle publishes price at window close
├── 2/3 committee approval
└── 6-hour dispute window

Event-Driven (IPO/M&A):
├── Based on deal announcement or first-day close
├── Committee validates within 6 hours
└── Settlement proceeds

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Data Quality

Source Reliability

Source	Reliability	Update Frequency
Funding round	High	Per event
Secondary broker	Medium-High	Weekly
Third-party (PitchBook)	Medium	Monthly
News/estimates	Low	Varies

Confidence Scoring

Confidence Score (0-100):

90-100: Recent funding round (<90 days)
70-89: Secondary market activity
50-69: Third-party estimates only
30-49: Limited/stale data
0-29: Highly uncertain

Display to users:
├── High confidence (70+): Normal trading
├── Medium (50-69): Warning displayed
└── Low (<50): Enhanced caution required

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Next Steps

• Dispute Resolution
• Governance Roadmap