Protocol

Quantum Markets

Quantum Markets were introduced by Alpin Yukseloglu and Sofiane Larbi at Paradigm. The paper addresses a core limitation of traditional decision markets (futarchy): each new proposal requires fresh liquidity. With hundreds of active proposals, per-proposal liquidity becomes too thin for meaningful price discovery.

The quantum market model solves this by letting a trader deposit once and receive tradable credits across every current and future proposal for the same decision. There is no marginal cost of liquidity per new proposal -- capital supports hundreds or thousands of options simultaneously.

Wave Function Collapse

While the market is active, all proposals exist in superposition. Each proposal has an amplitude (probability weight) determined by trading activity through the LMSR pricing function. At settlement, the system observes predicted values and selects the winner -- the proposal with the highest predicted metric value.

The winning proposal settles normally; all non-winning proposals are fully reverted. Trades in losing proposals become no-ops, and traders who held untraded positions keep their principal. This is the "wave function collapse" -- observing outcomes forces a single winner.

Why Uniswap V4

Meridian builds on Uniswap V4 rather than V3 because V4's architecture is a natural fit for quantum market mechanics:

• beforeSwap + BeforeSwapDelta enable custom pricing curves without external AMM contracts
• BEFORE_SWAP_RETURNS_DELTA_FLAG allows complete bypass of concentrated liquidity
• Flash accounting via transient storage reduces gas for multi-step operations
• Single PoolManager means one pool per proposal with shared hook state
• Hook permissions are encoded in the contract address (no storage reads)

The hook fully controls pricing. No actual liquidity positions are needed in the V4 pool -- the pool is a routing mechanism and the hook is the AMM.

Key Distinction from MetaDAO

MetaDAO uses PASS/FAIL conditional token pairs for a single proposal at a time. Quantum markets generalize this to N proposals sharing a single capital pool with dynamic, permissionless proposal creation.