Decentralized Prediction Markets and Sports Books
Prediction markets allow traders to bet on potential future outcomes. These markets exist for weather, political, sports, and economic forecasting. Within this work we consider a decentralized framework for prediction markets using automated market makers (AMMs). Specifically, we construct a liquidity-based AMM structure for prediction markets that, under reasonable axioms on the underlying utility function, satisfy meaningful financial properties on the cost of betting and the resulting pricing oracle. Importantly, we study how liquidity can be pooled or withdrawn from the AMM and the resulting implications to the market behavior. In considering this decentralized framework, we additionally propose financially meaningful fees that can be collected for trading to compensate the liquidity providers for their vital market function.
Code (0)
등록된 구현이 없습니다.
Tasks
PredictionSimilar Papers 제목 키워드 기반
PredictionMarketBench: A SWE-bench-Style Framework for Backtesting Trading Agents on Prediction Markets
Prediction markets offer a natural testbed for trading agents: contracts have binary payoffs, prices can be interpreted as probabilities, and realized performance depends critically on market microstructure, fees, and se…
Beating the House: Identifying Inefficiencies in Sports Betting Markets
Inefficient markets allow investors to consistently outperform the market. To demonstrate that inefficiencies exist in sports betting markets, we created a betting algorithm that generates above market returns for the NF…
Unihedge -- A decentralized market prediction platform
Unihedge is a decentralized platform for prediction markets with a novel approach. Using Harberger Tax (HTAX) economic policies a new type of prediction market, named HTAX prediction market, was build. HTAX prediction ma…
PredictionOnchain Sports Betting using UBET Automated Market Maker
The paper underscores how decentralization in sports betting addresses the drawbacks of traditional centralized platforms, ensuring transparency, security, and lower fees. Non-custodial solutions empower bettors with own…
Decision MakingLearning in Multi-Stage Decentralized Matching Markets
Matching markets are often organized in a multi-stage and decentralized manner. Moreover, participants in real-world matching markets often have uncertain preferences. This article develops a framework for learning optim…
Fairness