Which prediction market is the best at the moment of the general election: comparison of five major prediction platforms such as FTX, Augur, and Catnip

Original author: Jing Kai

Original source: Blockchain Research Society

I asked a friend yesterday: Can Trump be re-elected in this year's US election? He said: I guess for a dollar, Trump will lose.

This can be regarded as the basic way to predict the market.

This year’s US presidential election is extremely tight, Due to the epidemic, some voters voted by mail, adding additional uncertainty.

In addition to the American people, in the encryption circle, the prediction market The participants are also eagerly following the latest developments, not only to satisfy the fun of eating melons and satisfy their concerns about the international situation, but also related to the issue of money bags.

Prediction market and US election

In addition to paying attention to the progress of Ethereum 2.0, God V is also interested in topics related to the US election recently, calling out the prediction market.

This year’s U.S. presidential election is extremely tight. Voting by means of ballots adds additional uncertainty.

In addition to the American people, participants in the prediction market in the encryption circle are also eagerly following the latest developments, not only to satisfy the fun of eating melons, but also to satisfy the international Concerns about the situation are also related to the issue of money bags.

Prediction Markets and the US Election

In addition to paying attention to the progress of Ethereum 2.0, God V is also interested in topics related to the US election recently, calling out the prediction market.

The November 4 tweet mentioned:

“Whoever wins or loses, this time around, I think prediction markets are proven: Compared with pre-election polls or forecasting models, the results of the prediction market are more accurate. The model predicts that the probability of Biden being elected is 90%, while the results of the prediction market show that the probability of Biden winning is 65%. "

As evidence, according to the forecast model of The Economist, the probability of Trump’s re-election is only 4% , while on the Ethereum-based prediction platform Polymarket, the gap between the two is not that big.

Of course, as the results of more electoral votes in swing states are announced, the results of the prediction market It also changes accordingly. As of this writing, betting on Trump's re-election is priced at $0.17, while betting on Biden's election has risen to $0.83. In other words, the current market believes that the probability of Trump's re-election is roughly 17%.

A large number of users in this year’s general election passed FTX, Augur, Encrypted prediction markets such as Prediqt and Polymarket participate in the prediction of election results. If you win, eat candy, if you lose, turn off the lights and eat noodles.

By taking advantage of the hot topic of elections, today we will learn about the prediction market of the blockchain industry ? What are some interesting platforms, and how did they perform in the general election?

What is a prediction market?

In general, a forecast market is a derivatives market created based on clear and verifiable facts in the future. With the blessing of blockchain technology, the prediction market has acquired the characteristics of openness and credibility.

For example, who will be elected in the 2020 U.S. general election? Which team can win, and can the price of Bitcoin break through $20,000 by the end of 2020? These problems occur at some point in the future, and the end result is clear and verifiable, not ambiguous.

In addition to events happening in the future and clear verification results, prediction markets still involve trading characteristics . Participants judge and bet on the outcome of future events. According to publicly provable rules, if the prediction is correct, they can make a profit.

During the 2020 U.S. election, several prediction market application platforms Initiated the prediction topic of the next presidential candidate, and users who participated in it and predicted correctly will be rewarded with cryptocurrency or fiat currency. Put money to make a judgment call, wait for the answer to be revealed, and get rewarded or lose money based on the outcome. This is the most basic way to predict the market.

There is the possibility of black-box operations in the traditional forecast market After all, the data may be tampered with by the project party, the database may be attacked by hackers, etc., and with the help of the immutable, open and transparent characteristics of the blockchain, an encrypted prediction market will also emerge.

Of course, blockchain-based prediction markets are not without limitations.

First, crypto prediction markets Rely on oracles to provide exact results. Although the encryption prediction market can record the participation information of all parties in the public ledger, the prediction events targeted often occur outside the chain, and it is still necessary to use intermediaries or data oracles to transfer the information outside the chain. The data is provided to the blockchain application. Failure or malicious manipulation of the oracle machine will cause the prediction market to fail to operate normally. Often the prediction market needs to choose a reliable oracle machine service, or choose several oracle machine service providers to avoid a single point of failure.

Secondly, when there is a dispute over the results of the prediction topic, if the prediction market application does not have a suitable dispute resolution mechanism, it will also cause unpredictable results. In this U.S. presidential election, some prediction markets have set too short deadlines, which will cause this situation. Because if Trump loses the election, he may try to make a comeback through litigation and other procedures, which will make the confirmation of the final result take longer.

Although the crypto prediction market is still in its nascent stage, the 2020 election has also attracted a large number of users for this type of application. Next, we look at five typical prediction market platforms.

Readers need to be reminded that this article is only for sharing information and does not make investment advice. However, the prediction market, as an essentially binary gambling agreement, has a high degree of uncertainty, and you need to pay attention to risks when participating.

How to play on the FTX centralized platform

Can Trump be elected? The answer given by FTX's prediction market is:

Can: 0.12 ; Cannot: 0.88.

Trump of digital asset derivatives trading platform FTX-2020 Contract products have been online for a long time. According to the introduction of FTX:

“TRUMP-2020 (hereinafter referred to as TRUMP) is a contract product launched by FTX. If Donald Trump wins the 2020 U.S. presidential election, TRUMP will expire at $1, otherwise it will be $0. Similarly, other President-2020 contracts (President refers to the 2020 U.S. presidential election candidate) are also launched by FTX If one of the other candidates wins the 2020 U.S. presidential election, the corresponding contract will expire at $1, otherwise it will be $0.”

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Forecasting the market due to the small number of people, the market liquidity is often insufficient. However, it has developed in recent years. Among the prediction markets during the general election, FTX’s prediction market is one of the most liquid markets.

According to the statistics of the Coingecko platform, The 24-hour trading volume of the Trump contract on the FTX platform is about 800 million dollars (combined volumes of both TRUMPWIN and TRUMPLOSE).

Theoretically speaking, the price of a TRUMP contract is approximately equal to the probability of Trump’s re-election, otherwise it means that Trump cannot be re-elected The probability.

As prediction market volume increases, FTX has profited handsomely from it. According to TheBlock, FTX may earn more than $1 million from prediction contracts.

Compared with the decentralized crypto prediction market, FTX’s prediction contract trading experience is better. Like other digital asset transactions, the user enters the transaction price and quantity, and submits the order.

Because the method of use is familiar to everyone, it is also Not much to introduce. It is worth mentioning that FTX added a note to the uncertainty of the final result of the US president: the possibility of recalculating the votes or appealing to the court exists. Therefore, although the third delivery condition in the contract is very close, it also provides more flexible options.

And if all delivery conditions are not triggered before November 9, the contract will be delayed until 2021 Delivery in February. The uncertainty of delivery conditions is an issue that may be considered in the prediction market for the US general election this time.

There is an additional piece of gossip to share about FTX: On November 5, the encrypted derivatives exchange FTX was founded Sam Bankman-Fried donated $5.22 million to Democratic presidential candidate Joe Biden.

Augur, the earliest decentralized prediction market

In the Augur prediction market, how do you view Trump's chances of winning?

The price information of the market, the answer given is:

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Yes: 0.15; No: 0.87.

Augur's prediction market is similar to FTX's. Take, for example, the predictive topic of the U.S. election. Augur created corresponding tokens (NO Trump Augur prediction token NTRUMP and YES Trump Augur prediction token YTRUMP). When the delivery condition is triggered, for example, Trump cannot be re-elected, the price of NTRUMP tokens will be delivered at $1, while the price of YTRUMP tokens will be $0.

According to Lianwen’s report on November 3, Augur platform The "2020 US Election" market has traded over $5 million in volume.

Augur is a decentralized peer-to-peer prediction market based on the Ethereum platform , allowing anyone to create a prediction topic and initiate a prediction market. The advantages of decentralized prediction markets such as Augur are that they provide greater stability and security, and are low in fees, eliminating the risk of counterparties. Traders There is no need to worry about the platform getting in the way. At the same time, because of decentralization, the platform cannot be shut down suddenly, and single point of failure is also avoided.

Speaking of Augur, there are a few extra things to mention. The current front-end is deployed on IPFS, which provides a way to resist censorship; while Augur's current v2.0 uses the 0x protocol to improve transaction smoothness.

Polymarket with AMM and Layer2

< img src="https://image.theblockbeats.com/upload/2020-11-06/4816fcde95659c5314f3517de9d85c958b2f322d.png">

Can Trump be elected? The current Polymarket prediction market for this topic has a transaction volume of 8 million US dollars. Under this topic, the current price given by Polymarket is:

Yes: $0.16; No: $0.84.

November 4 Polymarket data

Polymarket is an emerging prediction market platform that uses an automatic market maker mechanism and uses USDC as the token. Officially called the Information Marketplace: Polymarket harnesses the power of the free market to demystify important real-world events for you.

Among the current hottest topics, the top six All are related to the US election.

God V praised Polymarket:

“Try Polymarket now. It provides an optimized UI to attract users from outside the circle. It also provides the option to purchase USDC with a credit card.”

Polymarket’s user experience is much better than traditional DAPP, and there is no transaction fee. You can register directly with your email address without a decentralized wallet.

After logging in, if you want to participate in the market, you need to recharge USDC into the contract first. Or buy USDC directly with a bank card. Similarly, assets deposited in Polymarket can be redeemed at any time.

Once the deposit is successful, you can participate in the prediction. First click "Markets" in the navigation bar at the top of the page, then scroll down to browse different markets by category, quantity, liquidity, etc. Choose your preferred prediction market.

For example, after entering the Trump quiz market, you can directly purchase the corresponding share.

Polymarket adopts AMM's automatic market maker method, which is different from FTX's order book trading method In other words, transactions can be made directly without a counterparty, and the final price will be automatically determined by the market.

After submitting the order, it is equivalent to holding the corresponding position. There are two ways to take profit:

Sell directly on Polymarket

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The second way is to wait for the final settlement of the prediction market. If you guess right, the liquidation price per share is $1, and if you guess wrong, you lose everything.

The picture above is an example after liquidation.

Polymarket provides the trading experience and fluency of a centralized prediction market , due to the use of the AMM mechanism, transactions can be executed immediately; with the help of Matic Network's side chain, there is no need to pay high transaction fees, and the transaction depth is not bad.

The entrance to directly buy coins with bank cards is also for outsiders Participation provides a low-barrier approach. However, the transaction must first be deposited in USDC into the account, and the escrow method is adopted, which also makes some hardcore cryptocurrency enthusiasts complain about this.

Prediqt on EOS

Everipedia is the blockchain version of Wikipedia. The results are uploaded to the chain in real time and recorded on the EOS blockchain.

In addition to this, the team also created a forecasting market application platform: Prediqt.

Prediqt adopted its own native token IQ as a participation Assets for prediction markets. The current transaction volume is about 48 million IQ.

Prediqt allows users to create their own markets. By submitting a series of information (such as transaction tokens, market names, descriptions, pictures, etc.), and setting the market's liquidation confirmation standards, arbitrators, delivery time and other information, you can create your own prediction market, with small partner to play.

Of course, the more common practice is , to directly participate in the existing prediction market.

Prediqt uses order book and AMM to purchase correspondence share, the default method is the order book method. The recently launched Uniswap-like platform Minswap provides a way for IQ tokens to buy Trump prediction tokens.

However, compared to the current market trading volume of Prediqt It's not that big.

Catnip based on Augur and Balancer

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Finally, we will introduce a small project, Catnip. There is currently only one trading market: Whether Trump wins the 2020 presidential election can be regarded as an experimental project.

Catnip has adopted two prediction tokens (YTRUMP and NTRUMP) All from the Augur platform. However, unlike Polymarket, when using Catnip, it is a non-custodial method. You can log in and use it directly with the web3 wallet, and the obtained prediction market tokens are also directly deposited into the wallet.

Catnip created a trading pair with the help of Balancer. By combining Augur and Balancer, it can be regarded as a new attempt of DeFi + prediction market. The follow-up Catnip is also scalable. After all, Augur provides a prediction market, while Balancer provides liquidity. This approach uses Catnip as a prediction market entrance, backed by two established platforms, and can extend more interesting play.

The current market trading volume is 7.58 million US dollars, the delivery date is set for January 22, 2021. This is a more reliable setting, which avoids possible disputes caused by too short a market setting time.

Summary

Can Trump be elected? It is expected that we will not be able to get the answer in a short time, but the blockchain research institute may be a good way to eat melons.

This article sorts out several typical blockchain prediction markets The case may inspire you. How to create your own crypto prediction market? How to get involved? This article can give you some answers.

Next, the Ethereum 2.0 launch process is about to start, maybe you can create a new Forecasting the market, guess what, can the 0th phase of Ethereum 2.0 be created as scheduled? We don't know the answer, but we can listen to the wisdom of crowds in the prediction market.

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