> ## Documentation Index
> Fetch the complete documentation index at: https://docs.counsel.markets/llms.txt
> Use this file to discover all available pages before exploring further.

# Parimutuel Pools: How Odds and Payouts Work on counsel

> Learn how parimutuel pooling works on counsel: how odds form, why they shift with each bet, and how payouts are calculated at close.

In a parimutuel market, bettors do not wager against a house or a counterparty quoting fixed odds. Instead, every stake goes into a shared pool. When the market resolves, winners divide the pool in proportion to how much they staked on the correct outcome, after a small protocol fee. The key implication is that your return is not set when you bet, it is determined by the final composition of the pool at close.

## How the pool works

Every market on counsel has a dedicated pool account on the XRP Ledger. When you send a Payment to that account, your funds enter the gross pool. Each outcome maps to a DestinationTag, so outcome 0 ("Yes") and outcome 1 ("No") accumulate in separate sub-pools within the same account.

At resolution, the fee is deducted from the total pool, then the net pool is divided among winning-side stakers pro-rata by their individual stake.

<Steps>
  <Step title="Stake">
    Your XRP Payment reaches the pool account, tagged to your chosen outcome.
  </Step>

  <Step title="Pool accumulates">
    Every bet across all outcomes adds to the gross pool. The implied odds shift continuously.
  </Step>

  <Step title="Betting closes">
    Once `bet_cutoff` passes, the pool is frozen. No new bets are accepted after this point.
  </Step>

  <Step title="Resolution">
    The winning outcome is determined. The fee is applied and winners are paid.
  </Step>
</Steps>

## Odds are indicative until close

Because any new bet changes the pool distribution, odds are never firm until `bet_cutoff` passes. Two values are useful for evaluating a position at any given moment:

```
implied_prob      = outcome_pool / total_pool
payout_per_unit   = net_pool / outcome_pool
```

`implied_prob` tells you what fraction of the total money is on a given side. `payout_per_unit` is the multiplier you would receive if that side wins, after the fee. Both numbers move with every new stake on any outcome.

<Warning>
  Odds displayed before `bet_cutoff` are indicative. The pool can shift materially between the time you see a quote and the time your transaction confirms.
</Warning>

## Anti-slippage: `projected_implied_odds_after`

Before you sign a bet, the `bet-intent` endpoint computes how your own stake moves the line. The response includes `projected_implied_odds_after`: the `implied_prob` and `payout_per_unit` for your chosen outcome **after** your stake is added to the pool. This is the closest thing to a pre-trade quote counsel can provide.

```json theme={null}
{
  "outcome": 0,
  "amount_xrp": 10,
  "projected_implied_odds_after": {
    "implied_prob": 0.624,
    "payout_per_unit": 1.555
  }
}
```

Check this number before signing. A large bet on a thin pool will meaningfully worsen its own odds.

## Odds are final at close

Once `bet_cutoff` passes, no new bets are accepted. The pool state at that exact moment, the drops on each outcome, determines the final `payout_per_unit` for every bettor. There is no further price movement after close.

## Worked example

Consider a 100 XRP market with 3% fee (`fee_rate: 0.03`):

| Outcome | Pool   | Implied Prob | Net Pool | Payout/Unit          |
| ------- | ------ | ------------ | -------- | -------------------- |
| Yes (0) | 60 XRP | 60%          | 97 XRP   | 97 ÷ 60 = **1.617×** |
| No (1)  | 40 XRP | 40%          | 97 XRP   | 97 ÷ 40 = **2.425×** |

* Gross pool: 100 XRP
* Fee (3%): 3 XRP
* Net pool: **97 XRP**

A bettor who staked 10 XRP on Yes would receive `10 × 1.617 = 16.17 XRP`. A bettor who staked 5 XRP on No would receive `5 × 2.425 = 12.125 XRP`. The house takes 3 XRP regardless of which side wins.

<Note>
  Individual payouts are floored to the nearest drop (1 XRP = 1,000,000 drops). Rounding residue (dust) accrues to the operator reserve rather than being distributed.
</Note>

## Parimutuel vs. fixed-odds

<CardGroup cols={2}>
  <Card title="Parimutuel (counsel)" icon="scale-balanced">
    You bet against other bettors. Odds are set by the market. The house takes a fixed fee regardless of the outcome.
  </Card>

  <Card title="Fixed-odds bookmaking" icon="building-columns">
    You bet against a bookmaker who quotes and guarantees a price. The bookmaker absorbs the risk of a lopsided book.
  </Card>
</CardGroup>

On counsel, the protocol is never exposed to outcome risk. The fee is the only revenue, and it is deducted from the pool before any split.