Simple Binary Prediction Market Discussion

[bytemaster]

https://bitsharestalk.org/index.php/topic,20523.msg264808.html#msg264808

[Shentist]

Why not allow delegates to publish results of an outcome?

They can publish the result if the committee decides to create a prediction market asset.

It can all be done right now.

could you explain it more in detail?

most of us don't know the technical possibilities we have right now. so how could this be done?

[puppies]

I am not sure what issue you are referring to.  I fear some communication issues are due to translation issues.

maybe....
I am wondering if there is a way to force settlement all asset imediately.
if we don't have this function, how to finish this prediction game?

can anybody give a guide what's the right way of implement the predition market?

I can't give you a guide.  I've thought about it a bit, but there are a couple of things I am not sure of. 

If for example you started out with an asset and defined it as a yes/no on a future event.  For this example we will use something simple like a coin flip.  We will call our asset heads, and set a feed of 1heads/1bts with a forced settle at 1.99 and 0 sqp.  If I am willing to bet on heads then I will borrow 1 heads at a collateral rate of 200% thus putting up 2bts, and getting 1 heads. I would then place this 1 heads for sale at 1bts.  Someone willing to bet on tails would purchase that 1 heads.  At this point I would be short 1 heads with a collateral position of 2, and would have the 1 bts I sold my heads for.  My counterparty would have spent 1 bts and have 1 heads.  Now we would flip the coin.

If the coin is tails then the settlement is easy.  we simply move the feed up to 1heads/2bts.  The short would force settle at the feed price, and the long would be able to sell to double their money.  Even if the short added funds to increase collateral, they could still be force settled.

If the result is heads then its a little harder.  You would need a way to force settle the longs.  At worst the asset issuer could recall the asset from the longs and place for sale as close to 0 as possible.  Thus the shorts could purchase the asset, close their shorts and keep the collateral. 

One of the great unknowns is fees.  Particularly what fees are paid for recalling all assets to the issuer?

Also It seems as if by adjusting collateral requirements and starting feed price you could change the odds, but I haven't reasoned all the way through that yet.

***edit***
After thinking about it a little bit more.  I think for a 1 to 1 odds bet, a starting feed of 1 with a sqp of 1.333 would probably be a better idea.  Then to close out, you would set the feed to 1.5.

[alt]

I am not sure what issue you are referring to.  I fear some communication issues are due to translation issues.

maybe....
I am wondering if there is a way to force settlement all asset imediately.
if we don't have this function, how to finish this prediction game?

can anybody give a guide what's the right way of implement the predition market?

[Empirical1.2]

Why not allow delegates to publish results of an outcome?

They can publish the result if the committee decides to create a prediction market asset.

It can all be done right now.

If this can be done right now, fairly easily maybe we should ask just one high profile/interest generating question on an upcoming event, simply for the sake of showing it can be done on BTS.

We may get some positive attention as a result, if not it would still be good to test it out & also to gauge interest.

Winner of the Suberbowl?

Good one. That would probably be one of the ones that generated the most action.

Could also go for something more controversial to get attention, don't know what though.

[mint chocolate chip]

Why not allow delegates to publish results of an outcome?

They can publish the result if the committee decides to create a prediction market asset.

It can all be done right now.

If this can be done right now, fairly easily maybe we should ask just one high profile/interest generating question on an upcoming event, simply for the sake of showing it can be done on BTS.

We may get some positive attention as a result, if not it would still be good to test it out & also to gauge interest.

Winner of the Suberbowl?

[Empirical1.2]

Why not allow delegates to publish results of an outcome?

They can publish the result if the committee decides to create a prediction market asset.

It can all be done right now.

If this can be done right now, fairly easily maybe we should ask just one high profile/interest generating question on an upcoming event, simply for the sake of showing it can be done on BTS.

We may get some positive attention as a result, if not it would still be good to test it out & also to gauge interest.

[bytemaster]

I am not sure what issue you are referring to.  I fear some communication issues are due to translation issues.

[alt]

People would never touch this if there is this weird settling fee/waiting game.

I don't even think there is a Nash equilibrium.  It really is just a waiting game.. there are no underlying rules, it is all subjective opinions on your expectation of how your opponent will settle.

Actually I guess the nash equilibrium would be .5, it is just that it isn't tied to the objective of what the game should be?

have you  resolve this issue for have to waiting?
If not, maybe I can share my ideas about how to  resolve this problem based current BTS2.0 feature

[bytemaster]

Why not allow delegates to publish results of an outcome?

They can publish the result if the committee decides to create a prediction market asset.

It can all be done right now.

[alt]

great discuss
how about prediction market in BTS2.0 now?
can I get more valuable discuss about prediction at the forum?
thanks

[bitmeat]

Why not allow delegates to publish results of an outcome?

[donkeypong]

Prediction markets are cool, margin trading  is great.

But not finishing what one have started is truly stupid and regrettable. 90% of the killer BTC apps is already developed by Bitshares. What is left to do is make this the killer app... pun intended as it will  sucking 1/3 of the BTC market cap, while solving the 2 of the biggest weaknesses of bitcoin - it being traded with counterparty risk and its volatility.

What we need first is BTC wallet :
-with built in truly decentralized exchange.
-with truly no counterparty risk conversion of everybody's bitcoin to stable non volatile , blockchain-based asset of her choice - gold, euro, dollar. The true savings account as Stan used to say, that people keep their money up to seconds before they need to spend those funds.

Price of the project 250-300 man-hours.
and yes we will truly regret if we do not do it and jump on other pet projects that someone finds cooler or more interesting to their always seeking the next challenge minds...

I think the BTC wallet is one of the most popular projects atm on NullStreet and they seem to be really co-ordinating well around it. I think they will be able to find and get a developer elected to work on that.

I am aware that a lot of people have similar ideas/dreams in their heads. And I am happy that I am not the only daydreamer considering such a product extremely valuable. Unfortunately most are happy with attaching shapeshift like centralized bridge to achieve that.
I on the other hand envision -truly no counterparty risk conversion BTC <-> bitWhatever.

The foundation for my approach are already in the BTS code and an elegant solution is achievable with mere modification to it, but... And it is a big 'but', those modification need to be done by the core dev. team and are not something you just attach to the existing BTS core.
(I have written a couple of pages explanation if any core dev is remotely interested and no I am not posting it here as the spelling and grammar of said writing are unbelievably bad)

I'd like to bump this and add my agreement. Tony's suggestion (which is a slight modification from some ideas we've seen) would be worth the extra time. Tony is right: this would suck up much of the BTC action and we'd have our killer app. It must not cut corners.

[Empirical1.2]

If both parties have equal amount of collateral tied up you could force them to settle quicker by applying demurrage to the collateral. The longer they wait the less they will get back at the time where they close the bet position. Demurrage rate could be applied in different proportion based on the VWAP of the last price on the market. Since all the honest betters will have settled earlier the VWAP will be difficult to manipulate. For instance, if demurrage rate is 2% per day and the vwap is 0.9, the loser will bear 0.9*2=1.8% demurrage whereas the winner will bear only 0.1*2=0.2% demurrage. In this condition, the loser is better off settling quickly.

Whatever the specific way this is inplemented, the counter-incentive of waiting should always be higher than the incentive of waiting so that the equilibrium will form on (tell the truth,settle early).

.
This is clever. I'm scary participating this though.

If you were willing to make decisions based on the VWAP then couldn't the blockchain hold the collateral &
settle at 1 or 0 based on that? (With a short interim period where you could look to delegates for intervention if VWAP produced the wrong result.)

[dna_gym]

If both parties have equal amount of collateral tied up you could force them to settle quicker by applying demurrage to the collateral. The longer they wait the less they will get back at the time where they close the bet position. Demurrage rate could be applied in different proportion based on the VWAP of the last price on the market. Since all the honest betters will have settled earlier the VWAP will be difficult to manipulate. For instance, if demurrage rate is 2% per day and the vwap is 0.9, the loser will bear 0.9*2=1.8% demurrage whereas the winner will bear only 0.1*2=0.2% demurrage. In this condition, the loser is better off settling quickly.

Whatever the specific way this is inplemented, the counter-incentive of waiting should always be higher than the incentive of waiting so that the equilibrium will form on (tell the truth,settle early).

.
This is clever. I'm scary participating this though.