Karma Protocol: The First Fully On-Chain Protocol for Prediction Market
Tortola, British Virgin Islands, January 30th, 2024, Chainwire
KarmaPi Team has announced their imminent launch of the first fully on-chain protocol for prediction markets, based on the Sui Network.
Blockchain experts have offered their perspectives on the prediction market
As referring to Vitalik Buterin’s description of the prediction market in 2020, “I expect that in the coming years, the prediction market will become an increasingly important application of Ethereum. The 2020 election is just the beginning; prediction markets will attract more attention, encompassing not only elections but also conditional predictions, decision-making, and other applications.”
Having explored the prediction market for several years, KarmaPi Team deeply understands the powerful potential of prediction markets and the pressing issues that need resolutions. the KarmaPi Team is committed to providing a better solution for the prediction market space.
Alliance DAO, one of the most renowned investment institutions in the blockchain space, addresses three core issues in the prediction market space under “start-up ideas”: discrete, binary outcomes, and noncontinuous with limited upside. These issues are also evident in current prediction market applications:
Case Study on Polymarket and Fan Token
For example, Polymarket is currently one of the largest platforms in the on-chain prediction market. However, it still faces issues related to centralized provision of prediction events, leading to uneven traffic, a lack of diverse prediction events, and insufficient community engagement. Similar problems are observed in traditional prediction markets, where options are not interoperable in different yet related topics. This issue forces users to stake assets separately in various topics, impacting the liquidity of their assets. Additionally, under the Automated Market Maker (AMM) model, both market makers and liquidity providers cannot avoid the risk of losses.
Fan tokens, as an alternative form of assets for participating in prediction events, are assets sought after by individuals on various exchanges during events. They are commonly used by exchanges for participating in event predictions. Existing fan tokens can be broadly categorized into two types: sports events and entertainment idol fan tokens. However, fan tokens also have notable issues, such as insufficient liquidity, unstable value and limited use cases.
These challenges underline the need for innovative solutions to enhance the functionality and effectiveness of prediction markets and fan tokens.
The Market Cap of Prediction Market
As of early 2024, the market size of Polymarket has reached an impressive $5.7 million. Furthermore, fan tokens, particularly those associated with sports events and highly sought after by exchanges during these events, have generated daily trading volumes surpassing $2 billion during peak periods. When compared to the substantial scale of fan tokens, current prediction market platforms have not yet fully accommodated users’ predictive needs.
This stark contrast in market sizes emphasizes the considerable potential for growth and improvement within the prediction market sector. There is an opportunity for innovative solutions to address the existing challenges and better meet the diverse needs of users interested in prediction markets.
Latest Solution: Karma Protocol
KarmaPi team’s proposal combines cutting-edge oracle technology with a fully on-chain prediction market protocol, which can bring new opportunities to the prediction market. The launch of Karma Protocol aims to refocus the prediction market around community-driven principles.
- Prediction Props: Smart inscriptions from the Sui ecosystem (Twitter: @SuiNetwork) serve as prediction props on Movescription (Twitter: @ MoveScriptions). These props possess uniform liquidity, participate in a diverse range of topics, are aggregated, and are not affected by discrete influences.
- Prediction Events: Prediction events are initiated and participated in by the community, fully returning to a community-driven model. Community-driven discovery promotes greater diversity in prediction topics. The combination of the prop layer and the prediction event layer ensures that the entire prediction protocol is aggregated and not influenced solely by the binary outcomes of a single prediction event.
- Traffic and Engagement: Traffic is allocated through algorithmic protocols to facilitate conversion and interoperability. The protocol encourages continuous community participation through events and asset activation.
- Protocol Token: $KART token serves as the core governance token under the Karma Protocol, enabling the initiation of prediction topics and access to other platform functionalities. It is also pegged to various intelligent oracle props used for participating in predictions in different proportions and supports purchases. Proposing prediction questions requires the expenditure of $KART tokens.
- Prediction Result Liquidation Rules: After the confirmation of prediction results, all intelligent oracles from the losing side will be destroyed. The redeemed Sui tokens from the destruction serve as the liquidation pool. 95% of the total liquidation pool will be distributed among the winners, 2.5% will go to the creator of the prediction event, and 2.5% will be allocated to the $KART Foundation (used for purposes like burning, rewards, etc.).
- Prediction Result Information Source and Liquidation Rights:
- Information can originate from the creator of the prediction event and be liquidated by the creator.
- Multiple parties can provide information, and the liquidation is done collectively.
- Oracle liquidation.
- Multiple oracle liquidation.
Partnership with MoveScriptions
Karma Protocol has established a collaboration with the MoveScriptions community. The MoveScriptions community will leverage Karma Protocol to create community prediction events, contributing jointly to the development of Karma Protocol. This collaboration aims to enhance the diversity of prediction topics and intelligent oracles, empowering community development.
The team hopes that the emergence of Karma Protocol will inject new vitality into the prediction market space and create additional possibilities.
