Hi esteemed DAOists of DXdao, I’d like to propose that DXdao fund a prediction market on Omen:
Predict that Polkadot’s native currency ($DOTs) will reach #3 in crypto marketcap by end of 2021. I think there’s a high likeliehood, this is the most competitive ecosystem compared to Ethereum in terms of developer community traction and momentum of product developments. I think that opening this market will be provocative enough to attract good amount of betting. In turn this will be good for Omen. If the outcome is as I predict it to be it will be profitable as well.
My proposal is to fund it with 18 ETH (+ gas fees). And I would like to propose a 80/20 split between DXdao and Daniel on the proceeds should the prediction comes out correct by end of 2021.
There are a few things I don’t understand re your proposal:
At what odds do you think the market should be created? How are you defining market-cap? When you talk about the 80/20 split on the proceeds are you making the large assumption that the market will be profitable from market-making? (most markets so far have not) I also assume you would want to take a personal position of Yes in the market so would also effectively be betting against the Dao?
Personally I would have also waited to get more feedback before creating an alchemy proposal.
I’ll be happy to get advise on considerations for market odds and any other factors that are important to consider. I thought of going with the default of 50/50, but if you could share what would changing it mean I’d love to learn.
Market cap definition is pretty straightforward: the value of $DOT on the token leader-boards, currently XRP is at #3 with a ~$30B, $DOTs are at ~$5B in the 5-10 region. I believe there’s a strong likelihood for $DOTs to challenge XRP’s position as the momentum in the polkadot ecosystem is 2nd to Ethereum.
Regarding the 80/20 split, I think you’re right, the market might not be profitable enough, I was thinking about the upside earned from the actual outcome should the prediction be correct. So essentially similar to how fund carry is often structured: 20% performance reward.
I was in fact intentionally proposing it to DXdao not to take a position against the DAO and avoid conflict of interest by not putting my prediction.
Happy to get more feedback and resubmit the proposal with better terms if the present experimental scale proposal I put doesn’t make enough sense.
My point about market cap is that if I use Messari 2050 marketcap then polkadot is already in 2nd position…Now I’m sure you meant either cmc or coingecko and whilst there are pros/cons to using a specific resolution source in this case I personally think it would be beneficial to bring greater clarity.
Re: 80/20 by the very nature of the AMM you cannot determine what the original traders on the market will do. They could share a similar perspective and buy yes and during the entire duration of the market ttraders have a “yes” majority which means the Dao would lose money if your prediction is correct. I guess your view is that traders would buy no at 50/50 initial odds which would give the dao exposure to yes but timing the withdrawal of liquidity to ensure that exposure is retained could be a difficult call.
From a purely adversarial perspective you are a better man than I to see a bet priced at 50% where you think the correct odds are 70-80% and not trade it either yourself or through a new wallet…
To my mind you would be better off creating this market on an order book prediction market (think this functionality will come on Xdai Omen at some point) and placing bids at various levels rather than the AMM model which has to always show a 2-way price.
It is an interesting idea for a market though, you may be interested in joining the following which I believe Sky is still leading.
Just my 2c and everyone else may completely disagree with me…
It’s true that I can’t know how many traders would actually get at which positions, but, I believe the sum requested is sufficiently small for DXdao to be worth gauging it and the topic is potentially somewhat contentious enough to spark interest among maxi sentimentalists and by that generate profits for the DAO.
LOL, this is called upholding commitment to avoid conflict of interest. The reputational cost of breaching commitment to avoid conflict of interest is simply not worth it, though I see your point as one could simply use a new wallet as you said and then it will not be provable as you suggested.
Any ETA on that? I was thinking about this process as rather straight forward fun experiment rather than complex or advanced problem, hence the proposal to make this market live and start socializing it, there’s an investor that already teased that they’ll place bets against my prediction, I’d like to act on the offer when it’s still fresh.
Cheers for the reference, @sky’s guidance here will certainly be very valuable.
Is there any details on the budget the winning Omen markets proposal will be allocated?
It seems reasonable that DXdao will be making efforts to drive liquidity to Omen by creating meaningful markets and kick start them, and could potentially be a good revenue stream for DXdao as well really excited and happy to contribute my Omen market entry to the competition.