Description: A decentralized prediction market built on Cardano
I have been fascinated with blockchain based prediction markets since I learned about Augur (an ethereum based project). I am also an avid sport bettor and build models to pick lines I believe to be profitable. I believe in the power of prediction markets to serve as a source of truth for important/impactful events and also to compete with the current sportsbook industry in recreational markets.
On to the project itself, I believe my implementation has the potential to deliver the promise of decentralized prediction markets that has yet to be realized. On Freeport, markets are created and settled by a ‘market originator’. These originators (who can be individuals or organizations) should carry some form of reputation within the community and be trusted to settle markets quickly and honestly. Originators provide the initial stake/liquidity to the market and set the initial line. When a wager is submitted on chain, the wager amount in Ada is locked at the contract and the bettor receives temporary tokens (outcomeA/B and PoolA/B tokens) that act as receipts of the bet amount and potential winnings recognizable by the contract. After settlement, these tokens can be exchanged for Ada if you wagered correctly. The pricing algorithm is similar to those used in a DEX where each trade will shift the exchange rate of the market by some amount. Unlike a DEX, Ada does not flow freely in and out during the wagering period. For more information on the smart contract and the protocol, you can read the whitepaper (litepaper?) which can be found here: https://freeport.bet/whitepaper.
Again, I hope to serve as a source of inspiration to those who have a great idea/passion for change and don’t think they have the knowledge to begin building. I’m always open to any questions that might help anyone curious to get started down that path.
There are some exciting things on the horizon for Freeport including plutusV2 upgrades to reduce fees, market creation capability for the masses, stablecoin integration, a more robust reputation system, smart contract audit followed by open sourcing, and many UI improvements.