To capitalize on the growing popularity of blockchain trends like decentralized finance (defi), Zeitgeist will be rolling out a new native prediction platform for Polkadot to expand the scope of opportunities available for retail crypto investors.
New Network to Build on Substrate and Launch Exclusively on Kusama
Long before Satoshi Nakamoto unveiled the Bitcoin whitepaper that led to a flood of blockchain innovation, prediction markets were available in the form of organized betting, often on political outcomes. For centuries these markets existed, helping corral crowd-based wisdom in the form of betting odds, which remain popular to this day.
The blockchain iteration of these prediction markets promotes the same idea: determining the probability of informational outcomes based on speculation. Unlike cryptocurrency trading, these markets are binary, meaning either a positive or negative outcome results from a contract between two parties.
Predictions made using these systems are considered relatively accurate, either matching or outpacing alternative results from focus groups, experts, and opinion polls. As prediction markets intersect with the latest defi craze, one company is probing new uses for blockchain’s architecture in another significant expansion of decentralized finance’s horizons.
Zeitgeist, a startup that recently exited stealth mode, is pioneering a new base layer blockchain prediction market based on Substrate, the development framework pioneered by Polkadot.
A Base Layer Approach
After revealing the project and raising a $1.5 million seed round from a consortium of investors, Zeitgeist has unveiled its road map. The project, which will be exclusively governed by users holding its native ZTG token, expects to launch its testnet titled “Battery Park” and a Kusama parachain by the end of 2021.
Unlike other prediction markets that operate as decentralized applications running on top of blockchains, Zeitgeist is building its chain, or base layer, which will be launched exclusively on Kusama. Although related to Polkadot, Kusama is designed to host experimental protocols while providing a testing ground that reflects real-world conditions. This will enable the prediction market to operate at scale while minimizing transaction costs, opening access to parachain assets, and enabling for forkless upgrades.
Cryptocurrency exchanges ordinarily handle a limited number of cryptocurrency pairs and derivatives. By contrast, Zeitgeist plans to host thousands of different markets. Zeitgeist will initially support markets in cryptocurrency, sports and esports, politics, startups, and insurance. Together, these will open up immense potential opportunities to retail traders seeking to speculate on all manner of outcomes while also reviewing sentiment across informational areas.
Over time the platform intends to aggregate the information and data collected on the network to improve decision-making, envisioning itself as a future hub for Web3 predictions. Interestingly, it is also rolling out a feature called Futarchy, which will use insights from its own prediction markets to help gradually evolve the platform’s governance. Moreover, its construction on Substrate will help Zeitgeist be compatible with Polkadot if it intends to build on a network parachain in the future.
With the rise of blockchain prediction markets, what’s next for defi – sports betting? Let us know what you think in the comments section below.