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Prediction Markets: A Goldmine
Are DeFi Prediction Markets the future?
This is a continuation of the Crypto Narratives series. Enjoy!
DeFi Prediction Markets are arguably the most underrated crypto theses for 2023.
In this newsletter, I will give you an overview of the DeFi Prediction Markets + some alpha drips.
DeFi Prediction Markets are speculative marketplaces that allow users to make and trade predictions on future events. And it can be any real-world event ranging from sports to elections to a company's product sales.
For instance, you can bet on Nigeria's presidential elections or an EPL game. Most DeFi predictive markets use a quadratic voting system, allowing users to allocate more votes toward their favorite contract.
It is worth noting that prediction markets are not a new concept. It has its roots in the 'wisdom of crowds' concept that elevates collective intelligence & forecast capacity above individual expert opinion.
Prediction markets are different from futures markets.
While futures markets enable traders to predict the future price of an underlying asset, prediction markets allow users to predict future events unrelated to the underlying asset's price.
The best part is that the DeFi predictive market TVL is rapidly increasing, with many exciting projects joining the party.
Now, let's look at some interesting prediction projects (in no particular order)
Polymarket - @PolymarketHQ
Built on Polygon, Polymarket allows users to trade on highly-debatable topics from every conceivable sector (politics, pop culture, business, etc.) They're the second biggest DeFi prediction market by TVL, as par DeFillama
With Polymarket, users can bet on future events by buying shares in their marketplace, which are redeemable at $1 each for winning shares.
Azuro - @azuroprotocol
Azuro is building a primary layer for decentralized betting where markets are priced, created, and made liquid.
Users cannot use Azuro directly, only via apps known as frontends, that use Azuro to deliver better services. One of the platform's frontend is bookmaker(dot)xyz.
They're one of the leading dApps on Gnosis Chain and the predictive market at large.
Zeitgeist - @ZeitgeistPM
Zeitgeist is a decentralized network for creating, betting on, and resolving prediction markets. They recorded an ATH in prediction volume in December, following the FIFA world cup period.
Polkamarkets Labs - @polkamarkets
Polkamarkets is a prediction marketplace where users take positions on outcomes of real-world events. Users can place bets using MOVR or GLMR, the native tokens of the Moonriver and Moonbeam blockchains.
PRDT Finance - @PRDT_Finance
PRDT Finance is a cross-chain decentralized prediction marketplace on DeFi. It combines the capabilities of binary options and prediction markets. Excited about this one.
Other worthy mentions.
Finance Dotvote @financedotvote
Meta Oracle Pro @MetaOraclepro
Get Kargo @GetKargo
Predictio Org @PredictioOrg
If you missed the early days of prep DEXes, don't miss the 'early' days of DeFi predictive markets. Not financial advice.