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# Protocol Mechanics

## 3. Protocol Mechanics

### 3.1 Placing a Bet — User Flow

1. Connect a wallet (Rabby, Zerion etc)
2. Navigate to the NFT Markets section.
3. Select a supported collection.
4. Choose a directional position: PUMP (floor price will rise) or DUMP (floor price will fall).
5. Enter the USDG stake amount.
6. Approve the Round contract's USDG allowance, then confirm the bet transaction.
7. Hold the position until the round transitions to SETTLED.

### 3.2 Claiming Winnings

Once a round reaches SETTLED, a Claim action becomes available on the corresponding collection card for any wallet on the winning side. Claiming triggers a direct USDC transfer from the Round contract to the user's wallet, calculated according to the parimutuel formula in Section 2.1. Unclaimed winnings remain claimable indefinitely from the settled round contract.

### 3.3 Fee Structure

Standard NFT floor price rounds and Custom Markets both apply the same 10% platform fee against the total pool, bettors never pay a different rate depending on market type. The two market types diverge only in how the protocol allocates that already-collected 10% fee after settlement.

#### 3.3.1 Standard Rounds (NFT Floor Price Markets)

| **Recipient**     | **Share of Pool** | **Notes**                                                              |
| ----------------- | ----------------- | ---------------------------------------------------------------------- |
| Winning bettors   | 90%               | Distributed proportionally per Section 2.1                             |
| Platform treasury | 10%               | Retained in full. There is no creator to share with on standard rounds |

#### 3.3.2 Custom Markets

| **Recipient**     | **Share**          | **Notes**                                                                                              |
| ----------------- | ------------------ | ------------------------------------------------------------------------------------------------------ |
| Winning bettors   | 90% of total pool  | Distributed proportionally per Section 2.1, identical to standard rounds                               |
| Platform treasury | 9.5% of total pool | 95% of the collected 10% platform fee                                                                  |
| Market creator    | 0.5% of total pool | 5% of the collected 10% platform fee, paid out of the fee itself — not an additional charge to bettors |

**Important:** the creator's fee is a 5% revenue share of the platform fee collected on that market, not an additional 0.5% deducted from the pool on top of the 10%. Bettors on Custom Markets are taxed at exactly 10% of the pool, the same as standard rounds — the creator and the platform simply split that 10% fee 5%/95%.

On TIE/refund outcomes, no fee is taken on either market type — all stakes are returned at face value, and no creator payout occurs.

<figure><img src="https://2744311952-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FSMSeNSwHhGmoxl63JltC%2Fuploads%2FEsRb0SqglBPznT2xqgfx%2Fkake_fee_distribution.png?alt=media&amp;token=a6cbff31-9e5e-4c39-84ce-1e751ce0a334" alt=""><figcaption></figcaption></figure>

### 3.4 Cancelled Rounds

If a round is marked CANCELLED (phase 4) — for example due to an oracle data failure, or no participation — all participant stakes for that round are returned in full and a new round begins automatically. No fee is charged on cancelled rounds.


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