As with brick-and-mortar industries that are slowly fading away to the globalism of the online world, so too will the traditional prediction market industry have to innovate to keep up with the sheer efficiency, reliability and security that the decentralized prediction markets promise to bring.
Augur (REP) has grabbed headlines lately with the launch of its highly anticipated prediction market earlier this month. Ethereum-based futures market DApp Gnosis (GNO) is also under development and running on the Ethereum testnet. Meanwhile, Bodhi (BOT/BOE), another decentralized application, has been operating on the Qtum mainnet since April 23, 2018.
These decentralized prediction platforms aim to disrupt the institutional futures markets by lowering the barrier to entry, allowing more people to cast predictions on a global scale and increase the mindshare of information; creating transparency in the prediction process via the blockchain ledger and smart contracts; increasing the integrity and accountability of payments; and lowering the costs to transact in the prediction markets.
Predictions can be made on just about anything: 1) the financial markets, 2) information in general, 3) insurance claims, 4) sports lotteries, or 5) anything that isn’t immoral. For instance, the financial markets would gladly welcome Michael-Burry-number-crunching predictions on what to invest in and the general information markets would benefit from open-sourced information, in which participants use their closed-source information and other resources they may have to support their prediction analysis.
How Does Bodhi Work?
Bodhi is a DApp that currently runs on the Qtum (QTUM) network, using the QRC20 token BOT and QTUM to run on the Qtum network. The team plans to include the Ethereum (ETH) user base by allowing Bodhi to run on the Ethereum network through its cross-chain implementation initiative; they have already created the ERC20 token Bodhi On Ethereum (BOE). The Bodhi Ethereum DApp is expected be released on the Ethereum network in Q4 2018, according to Bodhi Founder Xiahong Lin in an interview with Bitcoin Magazine.
On the Qtum platform, QTUM is used to pay for the transaction fees to operate on the Qtum network and to wager bets and the BOT is used “primarily to arbitrate against bad actors,” Lin said. In this way, both QTUM and BOT are needed to power the Bodhi DApp on the Qtum network. Similarly, when Bodhi is released on the Ethereum network, ether will be used to pay for the Ethereum network transaction fees and to wager bets and BOE will be used “mainly to arbitrate against bad actors,” according to Lin.
Although the current version only supports wagering with QTUM, the Bodhi DApp is designed to scale and allow it to use any cryptocurrency that is not a security, meaning it can eventually run on stablecoins and others. This larger scope means more people will be able to contribute their research and place a bet on that research to predict the outcome of a prediction — which should lead to better prediction results.
Bodhi uses third-party oracles to verify predictions; to further increase autonomy, when the BOT/BOE holders involved in a prediction contest the result, BOT/BOE holders can each participate in voting directly for the answer themselves. If a previous round’s result is not contested within 48 hours, it is then locked in and becomes the final result of the prediction.
However, if the prediction result is contested within the time limit, then the new round requires 10 percent more BOT/BOE than in the previous round to place a vote on the new result in the current round. The result from the previous round(s) is no longer able to be voted on in the current round. For example, consider there are four prediction results to vote on: A, B, C and D. If the previous round’s BOT/BOE holders majority vote resulted in answer A in the last round, then in the current round, any result other than A can be voted on, and it’s only in a round after the current one that prediction result A can be voted on again.
This voting process continues until the BOT/BOE holders no longer contest the result. This helps dial in the result to the correct result by requiring 10 percent more BOT/BOE than in the previous round to cast a vote. The voting process is meant to make it harder for bad actors to overpower the system and it uses “game theory as a theory of conflict resolution,” according to Lin.
The question of immoral predictions is a real concern. However, Bodhi seeks to address this by allowing BOT/BOE stakeholders to moderate the community by voting on which predictions the community deems illegal or malevolent which, in turn, should allow the stakeholders to preserve their shared interest in the platform.
The Road Map
Lin said Bodhi is developing a social media plugin to put the power of the decentralized prediction market at the fingertips of social media users, starting with the social media platform WeChat, creating a seamless integration between the centralized and the decentralized. Lin described it this way:
“User experience and user growth are the two key metrics for building a widely adopted prediction market. The Bodhi social network plugin will allow users to create a prediction market directly within a social network and easily share it with their friends to participate. Imagine that you are in a WeChat group, while you are talking about some topic, you create a prediction event with respect to that topic right away, and your friends can make predictions immediately. We are going to build a social network gadget that can associate your social network account with your Qtum/Ethereum wallet, so that it will automatically take your input within a social network and synchronize it with Bodhi’s prediction market.”
They also have “Bodhi Light” in the works: the development of a lightweight Bodhi application client version “which is meant to remove the need for the Qtum desktop wallet in [the] DApp,” Lin said.
Disclosure: The writer holds both QTUM and BOT.