Sowellian: How It Works

Sowellian: How It Works

Sowellian is a prediction market governance plugin for SPL Governance. It transforms traditional governance proposals into betting markets where participants stake tokens on the outcome of proposals, combining financial incentives with governance participation.

Overview

Instead of simply voting "Yes" or "No" on a proposal, Sowellian creates a bet tied to each proposal. Participants stake tokens on their predicted outcome, and when the bet is resolved, winners earn from the losing pool. This creates a "skin in the game" dynamic that incentivizes informed participation and honest signal expression.

Program ID: sowEL1Rtn3p479rg34gW7mVPeCNY58Es5rkLpFsCJAW

Core Concepts

Bet

A Bet is the central account that ties a prediction market to an SPL Governance proposal. It tracks:

• The associated proposal

• Total tokens staked on Yes vs No

• The bet's lifecycle state (Active, Settled, Resolved)

• The seed used for PDA derivation

• The owner (proposer) who created it

Vote Receipt

When a participant places a bet (casts a Sowellian vote), a Vote Receipt is created. This receipt:

• Records the voter's position (Yes or No)

• Records the amount staked

• Becomes the governing_token_owner for a dedicated Voter Weight Record

• Is used to claim winnings after resolution

Registrar

The Registrar configures the Sowellian plugin for a specific Realm. It stores:

• The linked Realm and governing token mint

• The governance account

• The treasury address (for fee collection)

• The realm authority

Lifecycle

1. Create a Bet

When a proposal is created, a bet is created alongside it:

create_bet(seed, name, description_link, proposal_seed, amount)

The proposer provides an initial stake and defines the bet parameters. A proposal is automatically created in SPL Governance tied to this bet.

2. Cast Sowellian Votes

Participants stake tokens on their predicted outcome:

cast_sowellian_vote(vote_seed, is_yes, amount)

• is_yes: true - Betting the proposal will pass

• is_yes: false - Betting the proposal will fail

• amount - Number of tokens to stake

Tokens are transferred to the bet vault (an Associated Token Account controlled by the bet PDA).

Each vote creates:

1. A Vote Receipt PDA: ['vote-receipt', bet, vote_seed]

2. A Voter Weight Record PDA for the receipt, allowing the governance program to recognize the vote

The Sowellian plugin simultaneously casts the governance vote through CPI (Cross-Program Invocation) to the SPL Governance program.

3. Settle the Bet

After the governance vote concludes, anyone can settle the bet:

settle_bet()

Settlement:

• Locks in all staked amounts

• Prevents further betting

• The proposal owner's receipt is created

• A treasury cut is taken from the pool

4. Resolve the Bet

The realm authority resolves the bet with the actual outcome:

resolve_bet(outcome: BetOutcome)  // Yes, No, or Void

Resolution:

• Sets the winning side

• Takes a 1% treasury cut from the total pool

• Marks the bet as resolved

5. Claim Winnings

Winners claim their share of the losing pool:

claim_bet(vote_seed)

Winnings are distributed proportionally based on each winner's stake relative to the total winning pool.

Fee Structure

Fee	Percentage	Description
Proposer Profit Share	15%	Portion of profits allocated to the bet creator
Voter Profit Share	5%	Additional share for governance voters
Bet Loss Rake	1%	Treasury cut from the total pool on resolution

Bet Weight Multiplier

Sowellian applies a weight multiplier to bets based on the participant's position in the betting order, divided into 10 buckets:

const SOWELLIAN_WEIGHT_ARRAY = [
  1, 1.2, 1.4, 1.6, 1.8, 2, 2.2, 2.4, 2.5, 2.5,
];

The multiplier ranges from 1x (first bucket) to 2.5x (last buckets). A participant's bucket is determined by their position relative to the total number of bettors.

PDA Addresses

Account	Seeds
Registrar	['registrar', realm, governing_token_mint]
Bet	['bet', seed]
Vote Receipt	['vote-receipt', bet, vote_seed]
Voter Weight Record	['voter-weight-record', realm, governing_token_mint, vote_receipt]
Bet Vault	ATA of the bet PDA for the governing token mint

Integration with SPL Governance

Sowellian works as a governance plugin by:

1. Registering as a voter weight addin on the Realm through SetRealmConfig

2. Creating VoterWeightRecords for each bet participant (keyed to their vote receipt, not their wallet directly)

3. Casting governance votes via CPI when a Sowellian vote is placed

4. The governance program reads the Sowellian-managed VoterWeightRecords to determine voting power

This means every Sowellian bet simultaneously functions as a governance vote, bridging prediction markets with on-chain governance execution.

Helper Functions

import {
  getBetAddress,
  getRegistrarAddress,
  getVoteReceiptAddress,
  getSowellianVoterWeightRecordAddress,
  SOWELLIAN_PLUGIN_PROGRAM_ID,
} from './sowellian/constants';

// Derive the bet PDA
const betAddress = getBetAddress(seed);

// Derive the registrar PDA
const registrarAddress = getRegistrarAddress(realm, governingTokenMint);

// Derive vote receipt PDA
const receiptAddress = getVoteReceiptAddress(bet, voteSeed);

// Derive voter weight record PDA
const vwrAddress = getSowellianVoterWeightRecordAddress(
  realm, governingTokenMint, governingTokenOwner
);