25 sats \ 4 replies \ @mega_dreamer OP 13h \ parent \ on: ⚡️ A Bitcoin-native prediction market powered by sats and Lightning is here! lightning
Disclaimer: We've used ChatGPT for grammatical corrections and formatting.
We totally understand the concerns raised from previous experiences with decentralized prediction markets. Let me address both examples and explain how PREDYX would handle them differently:

1. Venezuela Election Market
In the Polymarket example, confusion arose because there were conflicting sources of truth: "official statement" vs. "consensus of reporting." At PREDYX, we would avoid this by sticking to a single, clearly defined source of truth. For political events like elections, we would use one official source, such as the final certified results from the country’s electoral authority. This eliminates ambiguity and prevents scenarios where participants are confused by conflicting sources. If an event were difficult to verify or there were conflicting reports, we would consult trusted peer markets (e.g., Kalshi) and assess the best course of action.
In rare cases, if there's still too much uncertainty, we might cancel the market and refund users based on current share valuations to maintain trust.

2. Kennedy Campaign Withdrawal Market
In cases like Kennedy’s partial withdrawal, the phrasing of the market question is crucial. At PREDYX, we ensure that questions are framed in a way that can be objectively verified with clear criteria. In this case, the market could be phrased as “Will Kennedy completely drop out of the race?” with specific terms around what "withdrawal" means (e.g., removal from ballots in all states or an official public declaration of a full withdrawal). This removes the ambiguity and provides clarity, so the market can be fairly resolved.

3. 2024 U.S. Presidential Election Market (Trump Example)
To further demonstrate how we handle clear resolution criteria, consider this example:
Resolution Criteria:
The market will resolve to "Yes" if Donald J. Trump is officially declared the winner of the 2024 U.S. Presidential Election, certified by Congress based on the U.S. Electoral College results. The official verification will come from the U.S. Federal Election Commission (FEC). If Trump is not declared the winner by the FEC, the market will resolve to "No."
This approach guarantees that only one official source—in this case, the FEC—is used to verify the outcome, minimizing confusion and manipulation attempts.

Closing Thoughts
We understand the importance of trust and transparency in prediction markets, and that’s why we’ve designed PREDYX to avoid these pitfalls:
  • Clear resolution criteria for every market, based on a single, objective source of truth.
  • A centralized resolution team (for now) that evaluates ambiguous cases with caution and fairness.
  • The ability to cancel and refund markets in extreme, unverifiable cases to protect users.
By being precise with market phrasing and sticking to verifiable events, we aim to make PREDYX a reliable and trustworthy platform. We're also building a system that discourages manipulation by providing well-defined rules from the start.
Hope this has answered some of your concerns, please share your advice if you think there are better ways of handling such situations.
write
preview
0 sats \ 3 replies \ @cheerioMsSophie 13h
This sounds nice, as long as the team is not invested in the bets it resolves. I do not suggest this is the case, i just want to highlight the contra of centralized resolving.
Regarding the cancelation of a market: would it be possible to refund at the individual price the participants entered the market? Otherwise it would not really be a refund but more like a forced liquidation at marketprice.
reply
25 sats \ 2 replies \ @mega_dreamer OP 12h
I'm glad I could address some of your concerns! We're still a small team, and funnily enough, none of us have a real interest in betting ourselves—we just love creating markets. That’s what gets us excited! Internally, we even compete based on metrics like the number of traders, trading volume, and even market likes. It’s basically our version of Instagram!
As for market cancellations, we're still ironing out the details. To give you a better sense of our approach, we use the LMSR (Logarithmic Market Scoring Rule) algorithm for pricing and odds calculations. Unlike traditional crypto trading, where market makers and takers are abundant, prediction markets don’t work the same way. That’s why liquidity is crucial for market fluidity, and we’ll be injecting a significant amount of it ourselves to keep things moving.
In the event of a market cancellation, we’re planning to forfeit our injected liquidity to compensate traders. However, we also plan to allow external Liquidity Providers (LPs) to inject liquidity based on a fee-sharing model. Here’s where the dilemma lies: we can’t expect external LPs to forfeit their stake in case of a cancellation. This is a tricky situation, and it’s going to take us some time to finalize a fair and acceptable market cancellation policy.
reply
200 sats \ 1 reply \ @cheerioMsSophie 11h
Thank you for the details, i understand the problem better now. Maybe you could put aside some yield from fees to an "insurance fund". This fund could be used to mitigate the impact on users in case of the cancellation of a market. This would only be possible if a cancellation is a rare case, otherwise the fund would never get to a decent level ;) All in all this is a problem to be addressed later on i guess.
reply
25 sats \ 0 replies \ @mega_dreamer OP 10h
Thanks for suggesting the "insurance fund"! It’s a fantastic idea to create a pool to hedge against market cancellation risks. Cancellations should be rare, so having an insurance fund in place could actually be a smart and effective way to mitigate any potential impact. We’ll definitely be exploring how this could work in practice!
reply