What is a Prediction Market?
Answering what a prediction market is and why it was important for us to build one
Every market has a question about predicting a certain outcome, and that question only has two answers: Yes or No. These Yes's and No's are similar to tickets. If you were correct by the time the results come in, one correct Yes or No ticket becomes $1.
And how much is a Yes or No ticket?
Can you sell back your ticket when you change your mind?
That's where the fun begins.
The price of the Yes's and No's show us how popular a certain prediction is.
One Yes and one No together are worth $1. Yes and No tickets trade together on a single order book against dollars. Every market has an end date when it resolves so predictors can sit back wait for the results to see if they were correct. And to make it convenient, your winning tickets will automatically be redeemed for USDC when the market ends.
Because of this free market in place, you can even turn a profit by selling your tickets when the price goes up. There's plenty of strategies and rewards for understanding sentiments and being studious about the questions at hand in a prediction market.
Feel like a Yes or No is too cheap and the price will later get higher? Set a price to sell it then!
Dedicated yourself to researching certain topics and you are generally correct? Become a career predictor!
Not sure how to feel about a specific topic? See what the market thinks!
Prediction markets incentivize people to really think about their convictions and understanding about certain events. We want people to to have a place and community where they can quench their thirst for knowledge- the human need to feel grounded and in-the-know in a world that sometimes feels uncertain.
In a world of fake polls and unreliable data, prediction markets have an edge where participants must show skin in the game by 'putting their money where their mouth is.'
All around the internet, one can see how people form and refine their opinion based on what the sentiments are. A single poll or article can slightly swing how many feel about an event. Being exposed to a specific kind content can alter many's initial impression about an idea. And that idea can become cemented and harder to contest in the future.
On the other hand, being exposed to a large group who share the same type of belief will make an individual feel like they are surrounded and wrapped around one exact opinion. Is this belief really common? Is this really how everyone thinks? Is this the most correct?
There have been many times where people pick and choose the kind of polls they want to show others with the ulterior motive to change public opinion. For example, a candidate who wants to seem more popular than they actually are can convince everybody else just by artificially inflating their numbers. It doesn't give other parties a chance to contest that reality if one voice is louder than others.
The balance of the Yes and No is an indicator of understanding what everyone's beliefs truly are. Money speaks louder than any article, podcast, video, or tweet.
Once a question has been placed in front of someone, the answers all boil down to a simple 'Yes' or 'No', it can get one thinking of what they really believe in.
We want people to become curious, to share and discuss their ideas with others, to investigate and gather more information in order to better refine what their thoughts. Outcome after outcome, result after result, users can improve their research and predicting abilities.
To reflexively seek knowledge and to be able to refine the skills to form better judgements can be life changing. It can also be impactful to the world if it becomes a practiced trait in large groups of people. With incentives to research more and earn profit, there opportunities for positive feedback loops to occur. We can foster more conversations that lead to better ideas. We can build better models and understandings and make the world a better place.