PredictionSwap¶
The Problem¶
Prediction markets today are built as vertically integrated platforms.
Settlement may be on-chain, but live trading still relies on off-chain centralisation.
This centralisation is to addresses the inefficiencies of on-chain representation which fragments liquidity.
On-Chain Inefficiencies¶
- Economically identical actions are different transactions
- Economically identical positions are different token states
- Capital gets trapped in representations
- Deep liquidity requires pre-funded inventory
Read¶
The Shift¶
PredictionSwap changes the on-chain state representation.
Traditional systems record token balances first and from them build exposure.
PredictionSwap records exposure first and builds token balances from exposure.
When exposure is the primitive¶
- Equivalent transactions collapse into the same state update
- Equivalent positions collapse into the same representation
- Netting happens automatically at the ledger level
- Execution no longer depends on holding the “right” token inventory
Read¶
- A New Representation
- PredictionSwap Position Tokens
- Automatic Netting
- What Is A Trade?
- Why Intents Are Simpler
The Unlock¶
There is a cascade of positive benefits from having a more efficient on-chain representation.
When exposure is the primitive¶
- Liquidity no longer requires pools of outcome tokens
- A single capital base can support many markets
- Execution systems can compete against the same shared market state
- New market-making designs become possible
Read¶
About PredictionSwap Learn¶
This site is a curated set of conceptual articles explaining the structural foundations of PredictionSwap.
For the full narrative in one document: