Humanity has developed strong interests towards understanding history and predicting the future. What will the weather be like tomorrow? Which soccer team will win the UEFA European Championship later this year? Is Apple stock going below 100 USD per share on the first weekday of next year? People attempt to predict the results of simple yet non-trivial questions. The desire to predict what happens next has generated conventional prediction markets which are heavily regulated, such as lottery systems and stock markets, as well as illegally operated underground casinos and insider trading. Excessive regulation and legislation, implemented at large monetary costs, greatly limit the prediction market from performing its market functions. Meanwhile, conventional prediction markets have been heavily depending on centralized Oracles who set all prediction results and their fairness and charge a large amount of money. The high cost of these Oracles has significantly lowered the users’ willingness to participate and prevented the prediction markets from large scale adoption.
Prediction Markets are platforms that allows individuals or a group of entities to predict the outcomes of future events, and to be incentivised from the results. Incentives will be redistributed upon the realization of outcomes of an event in which all parties participated. The fortune redistribution follows a simple yet powerful rule, that the fortune flows from less skillful and inaccurate participants to more skillful and accurate participants. In order to succeed in the prediction, participants aggressively gather information, and apply mathematical modeling to maximize the chance of prediction accurately. Statistically, the price associated with each outcome has high positive correlation with each outcome. Meanwhile, the accuracy of the prediction is largely determined by the number of participants. Starting from the very beginning of information revolution, people has been devoted to making online prediction markets to minimize the onboarding barrier for participating in prediction. However, centralized online products have yet to earn people’s trust while excessive regulation and legal restrictions also greatly limits the development of the prediction market.
With the deluge of the continuous development of blockchain technologies, there is an in- creasing trust within communities on enabling public blockchain as Oracle that is fair and decentralized. Blockchain technology is a perfect candidate to form the building block of pre- diction market due to its characteristics such as information transparency and data immutability. The fairness of blockchain makes the prediction market run at low-to-no administrative cost. The application of Smart Contract empowers blockchain with a programmable and dynamic decision-making capability. All of the above emerging phenomenon resulted in the creation of decentralized prediction market.
Bodhi’s mission is to build a credible, autonomous, and scalable decentralized prediction market that promotes the application of prediction market at a global scale to enhance the effectiveness of decision-making process.