How a prediction market could work on chia:
The details of how specifically the DAO works needs to be fleshed out but here's a basic start.
Example: Sports Ball Big Game 2026
Jim Bob wants to bet on his favorite team "TEAM RED" to win the big game. The big game takes place Mar. 3, 2026. Jim Bob would need to register his prediction with a Prediction DAO. The DAO would decide if the prediction something it could validate the outcome on. If the DAO can, then the prediction market gets opened.
The prediction that Jim Bob submitted is approved and the DAO opens the market. The DAO then creates two CAT 2 tokens that represent each side of Jim Bob's prediction.
The details of how specifically the DAO works needs to be fleshed out but here's a basic start.
Example: Sports Ball Big Game 2026
Jim Bob wants to bet on his favorite team "TEAM RED" to win the big game. The big game takes place Mar. 3, 2026. Jim Bob would need to register his prediction with a Prediction DAO. The DAO would decide if the prediction something it could validate the outcome on. If the DAO can, then the prediction market gets opened.
The prediction that Jim Bob submitted is approved and the DAO opens the market. The DAO then creates two CAT 2 tokens that represent each side of Jim Bob's prediction.
PREDICTION_TEAM_RED_WIN_TRUE = {asset_id_001}
PREDICTION_TEAM_RED_WIN_FALSE = {asset_id_002}These tokens will be locked until after Mar. 3. The DAO will validate the outcome of Sports Ball Big Game 2026 to see if TEAM RED won. If they win, the DAO will release the CAT2 PREDICTION_TEAM_RED_WIN_TRUE to a faucet that anyone can request from.
Making a prediction
Jim Bob is notified that the prediction market was opened and can see the two CAT2 tokens available. Jim wants TEAM RED to win so he creates the following option.
Making a prediction
Jim Bob is notified that the prediction market was opened and can see the two CAT2 tokens available. Jim wants TEAM RED to win so he creates the following option.
OPTION_CONTRACT_ID_1 --------------- Underlying Asset: wUSDC.b Underlying Amount: 50.00 Strike Asset: PREDICTION_TEAM_RED_WIN_FALSE Strike Amount: 1 Expiration Date: March 13, 2026
Jim Bob has locked up $50 that will pay out to the owner of this options contract, if they can pay the token that shows TEAM RED lost.
WHAT??
Didn't Jim want TEAM RED to win why create an offer this way?
Jim makes the offer like this because he is going to pay $50 if his team loses. He now needs to sell his contract to someone that wants it. He has many ways to do it.
He could create an offer to sell his contract.
OFFER_ID_1 ------------- OFFERED: OPTION_CONTRACT_ID_1 REQUESTED: $25 wUSDC.b (1/2 of his wager)
Susie Ann buys this options contract for $25 because she knows in her heart that TEAM BLUE is going to win Big Sports Ball Game 2026.
Jim Bob and Susie and have both effectively put up $25 on the outcome of the game. Sussie paid Jim $25 for the opportunity to get $50. Jim already received $25 but has the chance to lose $50.
Jim Bob now just has to wait for the outcome to be decided.
THE BIG DAY (version 1):
TEAM RED wins!
The DAO will release the token PREDICTION_TEAM_RED_WIN_TRUE to the faucet. Anyone who made an option requiring that token will be able to collect the token and unlock their trade. Jim's option contract needed PREDICTION_TEAM_RED_WIN_FALSE in order to unlock the funds. This option will expire and never be able to be executed.
Jim Bob was right and his prediction pays off. All Jim has to do is wait for his option to expire and he will receive his initial $50.
THE BIG DAY (version 1):
TEAM BLUE wins!
The DAO releases the token PREDICTION_TEAM_RED_WIN_FALSE. This is what Susie Ann was hoping for. She collects her token from the faucet and uses it to unlock the Option Contract for $50.
NOW WHAT?
There are a lot of questions that need to be answered, like now do you structure the DAO. Where is this legal? If the DAO accepts fees to register predictions, is that considered the same as a casino rake?
The Mayor
X: @MayorAbandoned
X: @MayorAbandoned