Protocol Overview
MAGMA is a Yield-Bearing Narrative Capital Market (YBNCM) running on Solana. Participants back directional claims about real-world outcomes with capital; that capital is routed into DeFi lending protocols and earns yield for the entire commitment period; an on-chain oracle resolves each claim; and a Conviction Score determines how the resulting yield and forfeit capital are multiplied and redistributed.
This page is the map. It covers the architecture end-to-end, the capital-efficiency problem that motivates the design, and how the receipt-token mechanism makes routed capital safe to hold as a vault obligation.
MAGMA is operated by MAGMA Protocol Corp (a Cayman Islands SPC) and is currently in beta on
Solana devnet. The REST surface lives at https://api.magmaprotocol.xyz. Program IDs,
economic parameters, and endpoints may change before mainnet. See Security and
Legal & Compliance.
System architecture
MAGMA is a hub-and-spoke system. Solana is the canonical settlement hub: all oracle resolution, conviction scoring, and pool distribution happen there. Clients (web, mobile, agents) talk to a REST API and to the Solana programs directly; backers on other chains commit capital through spoke contracts that settle back to Solana. A separate oracle backend gathers off-chain evidence and submits signed verdicts on-chain.
Layers at a glance
| Layer | Technology | Role |
|---|---|---|
| Smart contracts (hub) | Anchor programs on Solana | Backing custody, resolution, pool distribution, draws |
| Smart contracts (spokes) | LockVault.sol (EVM), TronLockVault.sol (TRON) | Hold deposits on other chains; receive settlement messages |
| Oracle backend | Node.js / TypeScript service | Multi-source queries, weighted consensus, signs on-chain verdicts |
| API | REST at https://api.magmaprotocol.xyz | Read narratives/conviction/positions; relay backings |
| Clients | Next.js web, React Native mobile | User-facing apps; mobile targets Solana Mobile hardware |
On-chain programs (Solana)
MAGMA's hub is implemented as six Anchor programs. They are documented per-area throughout this section; the canonical devnet program IDs are listed in the Reference and on Pools.
| Program | Responsibility |
|---|---|
magma_backing_vault | Custody of backing capital, yield routing, M-of-N resolution, CPI fan-out |
magma_forge_pool | Resolution economics — collects forfeit capital, distributes to winners |
magma_seam_pool | Creator royalty (7% of Forge on TRUE) |
magma_core_pool | Protocol treasury allocation (5% of Forge on TRUE) |
magma_echo_pool | Yield-funded community draw, ticket accounting |
magma_ruffler | Weekly prize draw with independent ticket economy |
The capital-efficiency problem
Conventional prediction markets are capital-inefficient by construction. When a participant commits 10 SOL to a 60-day prediction, that 10 SOL sits in a vault doing nothing for the entire window. At DeFi lending yields of roughly 7–9% annualized, the opportunity cost of a 60-day 10 SOL position is on the order of 0.12–0.15 SOL — borne on every position, every period.
For high-volume forecasters running dozens of simultaneous positions, this idle-capital drag becomes the dominant term in their economics. It structurally disadvantages active participants relative to passive ones and undermines a market's ability to attract sophisticated forecasters.
Why capital sat idle: the mismatch problem
The historical reason is the liquidity mismatch problem. If committed capital is deployed into an external yield protocol, the vault now holds a yield-bearing receipt rather than the original token. If that receipt cannot be redeemed at full value at resolution time — because of a withdrawal queue, dried-up liquidity, or an adverse receipt-to-underlying price move — the vault cannot meet its payout obligations.
The simplest fix was to route capital nowhere: keep it in the vault, and accept the opportunity cost as the price of reliable payouts.
How YBNCM solves it
The fix is the yield-bearing vault standard (ERC-4626 and its Solana analogues). A well-designed lending protocol issues a receipt token representing a proportional claim on the pool — original deposit plus accrued interest. Crucially, the receipt-to-underlying exchange rate is monotonically increasing: it only goes up, because interest only accrues. There is no point in time at which the receipt is worth less than the original deposit denominated in the same asset.
This monotonic property is what makes the receipt safe to hold as a vault obligation: at any point during the window, redeeming yields at minimum the original deposit plus accrued yield. MAGMA's contribution is to integrate this receipt mechanism into the prediction vault — routing committed capital into lending protocols, holding the receipt as internal accounting, and computing yield precisely from the receipt's exchange rate at deposit versus redemption time (not from estimated APY snapshots).
What this unlocks
- Idle capital becomes productive. Backing capital earns lending yield for the full window instead of nothing.
- Yield becomes a distribution primitive. Earned yield can be returned to winners, redirected to the Forge pool, or used to fill the Echo Pool — see YBNCM for the full distribution rules.
- Conviction compounds on real returns. The Conviction Score, Eruption Streak, and Discovery Multiplier all scale a participant's share of real yield, not an inflationary emission.
Where to go next
| If you want to understand… | Read |
|---|---|
| The formal market model and distribution rules | YBNCM |
| How reputation and multipliers work | Conviction Score |
| How narratives resolve | Oracle |
| Where capital flows at resolution | Pools |
| Backing from EVM or TRON | Multichain |
| The $MAGMA token | Token Economics |