What are Prediction Markets?
Understanding Prediction Markets
Prediction markets are platforms where people can bet on the outcome of future events. Think of them as a way to "vote with your money" on what you think will happen. The more people bet on a particular outcome, the higher its probability becomes, creating a collective intelligence system.
Unlike traditional betting, prediction markets aggregate information from many participants, creating more accurate forecasts than any single expert could provide. They've been used to predict everything from election results to weather patterns, and even the success of new products.
Why Prediction Markets Matter
Collective Intelligence
When many people bet on outcomes, their combined knowledge creates surprisingly accurate predictions. This "wisdom of the crowd" often outperforms individual experts.
Transparency & Decentralization
Built on blockchain technology, prediction markets are transparent, immutable, and don't require a central authority. Every bet and outcome is recorded on-chain for everyone to see.
Financial Incentives
People have real money at stake, which motivates them to research and make informed predictions rather than random guesses.
The Math Made Simple
Don't worry - the math is simpler than it sounds! Here's how it works:
Probability = Money Ratio
The probability of an outcome is simply the percentage of total money bet on that outcome:
Probability = (Money on Outcome / Total Money) × 100%Example: If $60 is bet on "Yes" and $40 is bet on "No", then:
- "Yes" probability = (60 / 100) × 100% = 60%
- "No" probability = (40 / 100) × 100% = 40%
How Payouts Work
When you win, you get a proportional share of the total pool based on how much you bet:
Your Payout = (Total Pool × Your Bet) / Total Bet on Winning OutcomeExample: Total pool is $100, you bet $10 on "Yes" (which wins), and total bet on "Yes" was $60:
- Your payout = (100 × 10) / 60 = $16.67
- You made a profit of $6.67 on your $10 bet! 🎉
Note: A 2% platform fee is deducted when you place a bet, so only 98% of your bet goes into the pool.
The Smart Contract
Our prediction market runs on a smart contract - a self-executing program stored on the blockchain. Think of it as a digital vending machine that automatically handles all bets and payouts.
Key Features:
- ✓Transparent: All bets and outcomes are publicly visible on the blockchain
- ✓Trustless: No need to trust a central authority - the code enforces the rules
- ✓Automatic: Payouts are calculated and distributed automatically when events resolve
- ✓Upgradeable: The contract can be improved over time while maintaining security
What Can Be Predicted?
Almost anything! Prediction markets can be created for any future event with clear, verifiable outcomes. Here are some examples:
📊 Politics
Election results, policy decisions, political events
⚽ Sports
Game outcomes, championship winners, player performance
💻 Technology
Product launches, stock prices, tech trends
🎬 Entertainment
Award winners, box office results, celebrity events
🌍 World Events
Economic indicators, natural disasters, global trends
📱 Social Media
Viral trends, platform changes, influencer events
How It Works / How to Play
Step 1: Connect Your Wallet
Click "Connect Wallet" in the top right corner. You'll need a crypto wallet like MetaMask with some POL tokens (on Polygon mainnet) to get started.
Step 2: Browse Events
Explore the homepage to see all available prediction markets. Use the category buttons to filter by topic, or search for specific events.
Step 3: Place Your Bet
Click on an event to see details and probabilities. Choose your outcome (Yes/No or multiple options), enter your bet amount, and confirm the transaction. Remember: a 2% platform fee applies.
Step 4: Wait for Resolution
Once the event's end time passes, the owner can resolve it by selecting the winning outcome. This is done on-chain and is permanent.
Step 5: Claim Your Winnings
If you bet on the winning outcome, you can claim your proportional payout. Click "Claim Payout" and the funds will be automatically transferred to your wallet!
Creating Events
Only authorized creators (the owner or whitelisted addresses) can create events. To create one:
- Go to the "Create" page
- Fill in the event details: title, category, description, end time
- Add at least 2 possible outcomes (e.g., "Yes" and "No")
- Optionally upload an image (automatically compressed to 5KB)
- Submit and confirm the transaction
Ready to Start?
Prediction markets are a powerful way to tap into collective intelligence and potentially profit from your insights. Start by exploring existing events, or if you're authorized, create your own market!