Zeitgeist — The New Era of Prediction Markets
Prediction markets — what are they?
Prediction markets are not new to the modern world. Even before scientific polls, they existed in the form of political bets (one of the first known such bets on who would become the next Pope in 1503, although, even then, it was believed that such a practice had existed before). The same “predictions” were made in the United States and many other countries during presidential election campaigns or during sports competitions (sports betting occupies a huge niche in market forecasting). The method was even used to predict who would win the world-famous Academy Award. There are many examples, but the focus is always on one thing.
The midpoint of these markets is to exchange versions of the outcome of a particular event. Whoever turns out to be right — wins. Market prices tend to indicate what people think about a particular event. In the prediction market, you can trade in or out of a position, but ultimately it is a binary option with an expiration price of 0 or 100%.
The main purpose of the existence of the entire prediction markets system is to form a general opinion about an unknown outcome in the future.
Zeitgeist — an innovation in the world of prediction markets
The system of prediction markets has changed significantly over time. With the appearance of blockchain technology, the abundance of information has become much easier to process. Prediction markets are unique. Of course, they have a risk, but still, they are a “safer” investment for the reason that you make a bet on your knowledge as counterpointed to the success or failure of a project. Prediction markets give you the opportunity to invest in answers and ideas with price action that is tied to the predicted correct outcome of a particular market’s question. However, this method is also fiduciary and often pays off. Especially, if market participants are constantly educating themselves and investing only in their confidence in the outcome of a certain event. After all, what can be a better incentive than the risk of losing your investment?
Zeitgeist is innovative, a decentralized protocol that aims to improve the interaction of information with blockchain technology. To this end, Zeitgeist provides its platform for prediction markets.
Kusama Derby
If you are not new to the crypto industry, you should have heard about Kusama Derby — the first testnet campaign that Zeitgeist presented in May 2021. The platform was trading “results tokens”, where tokens represented each of the teams that participated in the Kusama Parachain auctions. The competition among the teams was quite intense, but the Karura team, known as the DeFi hub of the Kusama network, was ultimately predicted as the winner of the first parachain auction winner. The Karura team (DeFi node of the Kusama network) got the most votes. The auction lasted about a month, and all the participants experienced a lot of different emotions. What is also important to add, is the fact that prediction markets are truly effective! Kusama Derby has correctly predicted the first two winners of Parachain slots, and even predicted Karura’s massive lead in the first parachain auction.
The very name Kusama Derby shows that this event was very similar to a race on a racetrack. Just imagine that even if the team you bet on gets the most points — it is not guaranteed that they will be the true winner. However, since the aggregated information of the market indicates the victory of your team, it provides a very strong signal that your team will be the first winner of a parachain slot. This happens because all the “votes” are backed by a monetary value, creating an incentive to be right, and a risk of losing money if you are wrong.
After this event, the Zeitgeist project began to develop its ecosystem based on “futarchy” even more actively.
Futarchy
Futarchy is a one-of-a-kind management system that uses prediction markets to gather data on what direction an organization or state would be best to take. The system was proposed by Robin Dale Hanson, associate professor of economics at George Mason University and research fellow at the Institute for the Future of Humanity at Oxford University. Previously, futarchy had not found proper application. However, the Zeitgeist team believes that with this control system, anyone with a ZTG (Zeitgeist token) can directly influence the development of the blockchain. In this case, it is possible to “hear the real voice” of the community and see how people improve the ecosystem of the project. The information obtained through the use of futarchy is transparent and accurate, which means that the Zeitgeist system is fully decentralized (many people talk about decentralized governance in the crypto world, but rarely someone manages to put these words into practice).
Project Team
Logan Saether — Founder and CEO of Zeitgeist. He came into the world of cryptocurrencies in 2017. Since then, he has already managed to be a part of open-source projects in the Ethereum ecosystem, Web3 Foundation in 2019, as well as actively participated in the launch of Kusama and Polkadot.
David Perry — Director of information technology at Zeitgeist. Founder of the prediction market software company. Since 2015 he has been actively developing in the crypto industry. Created and developed many blockchain projects at ConsenSys.
Chris Hutchinson — Director of Marketing. In the crypto industry since 2016 (community building and marketing). Expanded Polkadot’s Ambassador Program to 1500 participants. Conducted the world’s largest Gitcoin hackathon.
Zeitgeist Technologies
Zeitgeist is built on Substrate (a platform that aims to develop the Polkadot ecosystem) to create blockchains within a peer-to-peer network.
Backing the project is a ZTG token, which will allow its owners to make valuable decisions in the market, and participate in on-chain governance via futarchy.
Given the fact that Zeitgeist is based on its own Layer 1 blockchain with optimized execution logic, high traffic is not an obstacle for it.
The Zeitgeist Court System
To resolve all disputes that arise in the course of events, the project team has developed its court system. There is a kind of jury, which you can join by staking your tokens to be selected as part of the jury. If the decisions of the court are challenged, the pool increases, and more jurors are added.
If all issues are resolved, then the issue under discussion is passed to the public vote (exclusively for ZTG holders) and the results are reported.
Conclusion
Zeitgeist expands the boundaries of prediction markets and provides the opportunity to become part of a community whose decisions are always important. Within the project system, there is a prospect to participate in predictions concerning sports and E-sports, politics, insurance, cryptocurrencies, and startups. There are a lot of events ahead that will contribute to the improvement of this ecosystem, and expand the community of futarchy enthusiasts.
I hope that this article was helpful for your understanding of Prediction Markets and Zeitgeist, and, perhaps, you would like to discover more about this amazing project.
You can get acquainted with the Zeitgeist here.
Zeitgeist is also recruiting crypto-enthusiasts for the ambassador program equivalent — The Zeitgeist Seer program.
You can learn more about the Zeitgeist Seer Program here.
Not often to see something like this in crypto, can by popular and like a fresh air