I watched the video on insurance bitshares. There was talk of a prediction market (although Dan referred to is as "the market" in the video, so I am not sure) deciding the trust and legitimacy of individual actors.
That made me question if a prediction market could work in such a case? What information do the market participants act off ? How could they receive any sort of perceived edge to even try ? Would the markets be large enough to actually approach accuracy ?
I then realized you could actually have prediction markets where the participants are paid by those they protect. So in the insurance situation, the prediction market could be paid by the insurance's fund pool to keep the adjusters honest. So instead of vig working against the market participants, it would work for them and be paid by the pool of money the prediction market participants indirectly protect. The market participants would have to back their positions with their own money, but they would get an additional %. This could make a healthier and more robust prediction market which would have a significantly higher chance of working.
Thoughts ?
Has anyone talked about such a model to help protect the interests of DACs ? I know it isn't like rocket science and I would be surprised if not brought up elsewhere.. It just seems like a significant improvement over relying on prediction market to exist with no extra incentives. I'm sure there are other places it could be applied.
Topic: Relying on prediction markets ? (Read 1005 times)
