Zeitgeist’ prediction market to utilize CoinDesk indices for crypto betting.
Zeitgeist' prediction market to utilize CoinDesk indices for crypto betting.
Blockchain Technology Expands into Prediction Markets
The blockchain industry is constantly evolving, and its applications continue to expand into new sectors. One such sector is prediction markets, where participants can bet on the outcome of real-world events. Recently, Zeitgeist, a prediction market platform built on the Polkadot blockchain network, announced its partnership with CoinDesk Indices. This collaboration will enable traders to bet on the performance of two categories of cryptocurrencies: the CoinDesk DeFi Select Index and the CoinDesk Smart Contract Platform Select Index.
An Overview of Prediction Markets on the Blockchain
Prediction markets offer participants the opportunity to wager on a wide range of events, from significant geopolitical events to trivial disputes between public figures. These markets are regarded as a superior alternative source of expert opinion, as participants have a financial stake in the outcome. Unlike traditional pundits on cable news, whose predictions have no consequences for themselves, bettors in prediction markets bear the risk of losing money if their predictions are incorrect. This incentivizes participants to express their true beliefs. The growth and liquidity of prediction markets attract genuine experts who can provide valuable insights.
The Potential of Prediction Markets on the Blockchain
However, just like the crypto industry itself, prediction markets face regulatory challenges, particularly in the United States. For instance, Polymarket, a leading crypto-based prediction market, is prohibited from allowing U.S. residents to trade on its platform due to a settlement with the Commodity Futures Trading Commission (CFTC). Similarly, Kalshi, a platform that settles bets in U.S. dollars, has been barred by the CFTC from allowing users to wager on political predictions. Even PredictIt, a dollar-based prediction market, had to fight a legal battle with the CFTC to continue its operations.
Zeitgeist and CoinDesk Indices: A Collaboration for Innovative Predictive Betting
Zeitgeist’s partnership with CoinDesk Indices signals the development of prediction markets on the blockchain. By using the expertise of CoinDesk Indices, Zeitgeist can provide unparalleled prediction markets on one of the leading crypto index platforms globally. This collaboration enables traders to bet on the performance of two categories of cryptocurrencies: the CoinDesk DeFi Select Index and the CoinDesk Smart Contract Platform Select Index.
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The CoinDesk DeFi Select Index represents a basket of decentralized finance tokens, including tokens from Aave, Curve DAO, Maker, Lido DAO, Synthetix, and Uniswap. This index offers insight into the performance of the decentralized finance sector.
On the other hand, the CoinDesk Smart Contract Platform Select Index measures the performance of the native currencies of multi-purpose blockchains, such as Avalanche, Cardano, Cosmos, Ethereum, Polkadot, Polygon, and Solana. This index provides a comprehensive overview of the performance of smart contract platforms.
“This collaboration allows users to access intuitive segments and key themes of the digital asset space,” said Andy Baehr, the Managing Director at CoinDesk Indices.
Blockchain Technology Enables Cross-Chain Prediction Markets
Zeitgeist, originally built on Kusama (a Polkadot experimental network), now operates on the Polkadot blockchain itself. Polkadot is known for its interoperability between different blockchains, allowing seamless cross-chain functionalities. By leveraging blockchain technology, Zeitgeist can create a secure and reliable prediction market platform.
A Small But Growing Player in the Field
While Zeitgeist may be a smaller player in the prediction market niche, its collaboration with CoinDesk Indices reflects the innovation and growth potential of the industry. According to the Zeitgeist website, the cumulative volume of all Zeitgeist markets reached $19,410, as of Wednesday evening. In comparison, Polymarket, the leading prediction market, had over $5 million worth of bets on its most popular market.
As the blockchain industry continues to mature, prediction markets are gaining traction as a means to access expert opinions and insights. With the collaboration between Zeitgeist and CoinDesk Indices, traders now have even more options to engage in these markets, providing a new dimension to the blockchain ecosystem. However, the regulatory challenges faced by prediction markets will need to be addressed to enable wider participation and allow the industry to reach its full potential.
UPDATE (Oct. 5, 13:24 UTC): It should be noted that Zeitgeist is currently unavailable in the United States, due to regulatory restrictions.
Edited by Kevin Reynolds.