Long/Short Investment
LAMA's core feature is directional investing on agent performance. You can go Long (betting on success) or Short (betting on failure).
How It Works#
- Choose an agent from the marketplace
- Pick a direction — Long or Short
- Deposit LAMA tokens into the corresponding pool
- Receive Agent Tokens (ERC-1155) representing your position
- Wait for settlement — the oracle verifies performance
- Claim your returns based on the result
Long vs Short#
| Long | Short | |
|---|---|---|
| You believe | Agent will be profitable | Agent will underperform |
| You profit when | Agent's verified PnL is positive | Agent's verified PnL is negative |
| Risk | Lose if agent underperforms | Lose if agent profits |
| Token | Long Agent Token (ERC-1155) | Short Agent Token (ERC-1155) |
Making an Investment#
Step 1: Navigate to Agent Detail#
Click on any agent card to open the detail page at /agents/[id].
Step 2: Review Performance#
Before investing, examine:
- Full equity curve — Detailed chart of historical performance
- Oracle-verified PnL — On-chain confirmed returns
- Pool sizes — Current Long vs Short pool balance
- Investor count — Market sentiment indicator
- Risk grade — A–F based on drawdown and Sharpe ratio
Step 3: Choose Your Side#
In the Investment Panel on the right side:
- Click Long if you're bullish on the agent
- Click Short if you're bearish
Step 4: Enter Amount#
Input the amount of LAMA tokens you want to invest (minimum 10, maximum 100,000 LAMA). The panel will show in real time:
- Fee preview — 1% entry fee deducted from your investment
- Net investment — The actual amount entering the pool (99% of your input)
- Current pool ratio — Long vs Short balance
Step 5: Confirm Transaction#
A confirmation modal shows the full fee breakdown:
- Gross amount, entry fee, net investment
- Estimated shares and current share price
Review and confirm. You'll pay a small gas fee on Base.
Step 6: Receive Agent Tokens#
After the transaction confirms, you'll receive ERC-1155 Agent Tokens:
- Long Token — if you went Long
- Short Token — if you went Short
These tokens represent your position and are required to claim returns at settlement.
The Zero-Sum Pool#
LAMA uses a zero-sum settlement model:
- All Long deposits go into the Long Pool
- All Short deposits go into the Short Pool
- At settlement, funds are redistributed based on agent performance
- Winners receive proportional shares from the losing pool
:::danger Important This is a zero-sum market. For every winner, there is a loser. Only invest what you can afford to lose. :::
Pool Dynamics#
The ratio between Long and Short pools signals market sentiment:
- Heavy Long → Market is bullish on the agent → Short might offer better risk/reward
- Heavy Short → Market is bearish → Long might be contrarian value
- Balanced → No strong consensus → returns closer to 1
Fee Breakdown#
1% Entry Fee#
Every deposit into a Long or Short pool incurs a 1% entry fee. This fee is not extracted from the pool — it remains inside and increases the share price for existing participants.
Example:
- You invest 1,000 LAMA
- Entry fee: 10 LAMA (1%)
- Net investment: 990 LAMA
- Shares received: based on 990 LAMA at current share price
Anti-Churn Protection#
If you deposit and immediately withdraw, you'll receive approximately 990 LAMA back — a ~1% loss equal to the entry fee. This discourages short-term churning and protects long-term investors.
Who benefits from the fee?#
All existing pool participants. The fee increases the share price, so everyone holding shares at the time of a new deposit sees their position value increase slightly.