Prediction markets are for trading the outcome of events. The advent of blockchain technology allows for the creation of decentralized markets where event outcomes can be tokenized and traded by various participants all around the world, thus creating high liquidity. Delphy is such a prediction market on the Ethereum Network utilizing a native token.
Why use Blockchains for Prediction Markets?
Traditional prediction markets are extremely centralized and are subject to forecast and pricing manipulations. The advantages of blockchain based decentralized markets are as follows;
- No market manipulation- Due to the transparent & immutable nature of blockchain networks, the implementation is tamper-proof.
- Decentralisation facilitates global liquidity removing regional barriers.
- Token incentivization can attract more professionals and insiders into the market.
Introducing Delphy
Delphy is a decentralized, social prediction market built on the Ethereum network with its primary focus being Mobile devices. Delphy market ecosystem will involve the creation of Events and Markets, followed by the Pricing & Trading of shares. Ultimately the winners will be rewarded. The DPY token is native to the Delphy ecosystem. It is an ERC-20 based token used to buy shares and award winners. Here's a more detailed explanation of the workflow:
Events - The first step would be the creation of an "Event" which is basically an expression of interest over a future event in the real world. The outcomes of an Event can be of three types, namely binary, list and range. Individual clients would need to submit a detailed description, outcomes and the Oracle when creating an Event. All the submitted Events will be subjected to filtering to remove entries that do not fit the platform standards or are unethical.
Markets - Event creation will be followed by the creation of a Prediction Market that allows for seamless trading of shares. This would be done by a user after selecting an event from the live Event pool (list of Events). The Market creator/user needs to set a loss limit which is kind of a measure of the risk involved.
Pricing & Trading - For every market created, there has to be an associated pricing function. Here, Logarithmic Market Scoring Rule (LMSR) will be used to calculate the price of every outcome. Traders can buy & sell shares based on the prices derived from LMSR. DPY tokens will be used to power the transactions, i.e Buy and Sell.
Liquidation & Delivery - Once the "Event" transpires in the real world, the system will determine the winners based on the Oracle of the Event. Those users who are custodians of the shares of the correct outcomes are deemed as winners and their shares are converted to the appropriate amount of DPY tokens and transferred to their wallets. Delphy will deduct a certain amount which will/may include platform transaction fee, market creator incentives, DPY token holder incentives etc.
Comments & Messaging: Allowing for social media like interactions between different participants in the Delphy ecosystem.
The Delphy platform is built on the Ethereum Network as a DApp. Delphy will make use of Ethereum smart contracts to issue DPY tokens, create Events and Markets, Pricing, Trading, Matching etc. Delphy will use Swarm to store static files and metadata related to events. Oracles on the platform are the information suppliers, those which provide information on the real outcome of events. By leveraging the Light Ethereum Sub-Protocol, Delphy will provide the prediction market as a mobile application. The prediction market created will cover different segments such as Finance, Insurance, Entertainment, Sports & Games. Delphy currently holds the value proposition of being the only Prediction market in China.
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