Betting on Events

Peer to peer betting on prediction outcomes using Predict+ tokens and decentralized resolution

System Overview

The Basis Predict+ betting system represents a significant advancement in decentralized prediction markets. Through the combination of AMM-style pools, Stable+ token technology, and a robust multi-layered resolution process, the platform provides a fair, transparent, and efficient marketplace for event prediction.

The innovative resolution economic model, with its carefully designed fee structure and bond requirements, incentivizes accurate resolution while preventing manipulation. The Basis Army voting system provides decentralized final arbitration, ensuring that disputes are resolved fairly and transparently.

By aligning incentives through the fee distribution model and providing multiple resolution pathways, the system creates a sustainable and trustworthy prediction market ecosystem that benefits all participants.

Key Components

1. Smart Contract Infrastructure: Automated execution of bets and payouts

2. AMM-Style Pool: Dynamic odds adjustment based on volume

3. Oracle System: Automated and community based outcome resolution

4. Dispute Mechanism: Bond-based challenge system with Basis Army voting

Betting Phase Mechanics

Initialization

When a prediction event launches and completes its bonding phase, the betting phase automatically initiates with the following parameters:

• All outcomes begin with equal odds (e.g., 50/50 for binary events)

• Initial liquidity pools are established for each outcome

• Betting is enabled using both Predict+ tokens, USDC or native Basis Tokens

Betting Process

1. Selection: User selects an event outcome to bet on

2. Currency Choice: User chooses to bet with Predict+ tokens, USDC or another native Basis Token

3. Amount Input: User specifies bet amount

4. Share Calculation: System calculates outcome shares based on current odds

5. Transaction Execution: Smart contract processes the bet and adjusts odds

Dynamic Odds Adjustment

Odds automatically adjust after each bet based on the volume distribution across outcomes.

This AMM-style mechanism ensures:

• Market efficiency through volume-based price discovery

• Protection against manipulation through algorithmic adjustment

• Real-time reflection of market sentiment

Odds Calculation System

Core Formula

The system uses a constant product formula for price calculation:

Prediction Odds = Outcome USDC Pool / Total Event USDC Pool

This formula ensures that as more bets are placed on a specific outcome, its odds decrease (becomes more expensive), while other outcomes become more attractive (cheaper).

Buying Shares

When a user places a bet (buys shares), the calculation follows:

1. User inputs USDC amount or token amount

2. System calculates shares received based on current pool ratio

3. Pool rebalances, adjusting odds for next bet

Example: If Outcome A has 1000 USDC and Outcome B has 1000 USDC (50/50 odds), a 100 USDC bet on A would shift odds to approximately 52.4/47.6.

Selling Shares

Users can exit positions before event resolution by selling shares:

If current share value is less than initial share value (when the bet was first placed):

Sell Value = Number of Shares × Current Share Price

If current share value is greater than initial share value (when the bet was first placed):

Sell Value = Initial Share Value

The sell price reflects the true market value at the time of sale, allowing users to:

• Cut losses if market sentiment shifts

• Manage risk dynamically throughout the event lifecycle

Event Resolution Process

Fee Structure

The Predict+ platform charges fees at various stages of betting to incentivize accuracy and fund resolution:

Transaction Fees

• Buy: 1.5% of transaction value

• Switch sides: 1.5% when changing bet position

• Sell: 1.5% when exiting position

Bettors who hold their position until event resolution do not pay a sell fee.

Fee Distribution

• 0.95% to the winning pot (accuracy incentive)

• 0.05% to the bounty pool (resolution incentive)

• 0.5% to Basis (primarily the creator and Share NFT holders)

Resolution Bond Requirements

The bond requirement for resolution is calculated based on the bounty pool:

Bond Amount = Bounty Pool × 10

Basis Army Votes Required = Bounty Pool / 5 USDC

Time-Based Creator Markets

For markets with predetermined resolution times, the following process applies:

Creator Resolution (Priority)

• Creator has 15 minutes after time expiration to provide outcome

• If undisputed within 2 hours, creator receives the bounty pool and bond return

Community Resolution (Fallback)

• If creator doesn't respond within 15 minutes, community member can propose outcome by posting bond

• If undisputed within designated time, community member receives bounty and bond return

Dispute Process

• Disputes can be raised within 2 hours by posting bond and proposing alternative outcome

• Once disputed, Basis Army votes to resolve within 24 hours and receives the bounty pool

• Dispute winner: Receives loser's bond and retains their bond

• Dispute loser: Forfeits their bond (distributed to the winner)

Final Veto

• One hour following the Basis Army vote, a community member may veto the vote outcome by posting a bond.

• A Basis admin will provide final resolution.

Non-Time-Based Creator Markets

For markets without predetermined resolution times, resolution can occur through:

Resolution Options

• Creator resolution

• Community member

Resolution Process

• Either the creator or community member can propose an outcome at any time by posting a bond

• If undisputed within designated time, resolver receives bounty pool (bond returned if applicable)

Dispute Process

• Disputes can be raised within 2 hours by posting bond and proposing alternative outcome

• Once disputed, Basis Army votes to resolve within 24 hours and receives the bounty pool

• Dispute winner: Receives loser's bond and retains their bond

• Dispute loser: Forfeits their bond (distributed to the winner)

Private Creator Markets

A "private" event may be created where the creator is the sole resolver for the event outcome:

• The creator, and up to 10 whitelisted wallets, are solely responsible for resolving the event.

• There is no dispute process available and the creator designates the outcome.

• In the case where multiple wallets (up to 10) are approved for resolution voting, the event will be considered resolved once a majority vote has been submitted.

  • For example, a majority vote is reached when 6 out of 10 wallets vote "yes".

Basis is unable to verify the outcome of private event so event participants are trusing the creator to resolve accurately.

Basis-Created Markets

Markets created by Basis utilize automated resolution mechanisms for efficiency:

Automated Oracle Resolution

• Chainlink: For objective, data-driven outcomes

• AI-triggered data feeds: For subjective outcomes

Community Oracle Fallback

• When automated oracles unavailable, community member can act as oracle by posting bond

• Both automated and community proposals can be disputed within 2 hours

• Disputed resolutions escalate to Basis Army voting within 48 hours

Invalid Markets

Markets may be declared invalid by the creator or community member by posting a bond:

Invalid Market Declaration

• An "invalid" outcome can be disputed by a community member by posting a bond.

• Once disputed, Basis Army votes to resolve within 24 hours and receives the bounty pool

• Dispute winner: Receives loser's bond and retains their bond

• Dispute loser: Forfeits their bond (distributed to the winner)

Invalid Market Resolution

• All bettors receive full refund of their bet values

• If undisputed, the bounty pool is distributed to the resolver

• If disputed, the bounty pool is distributed to Basis Army members who voted

• The accuracty incentive pool (0.95% fee) is distributed to the insurance fund

• No winning or losing positions are declared

Basis Army Voting Process

The Basis Army serves as the final arbiter for disputed resolutions:

Voting Eligibility

• Members must hold a Share NFT

• Number of votes required to resolve an event = Bounty Pool / $5

Voting Timeline

• Time-based markets: 24 hours to reach consensus

• Non-time-based markets: 24 hours to reach consensus

Compensation

• Army members receive a portion of the bounty pool

Payout Distribution

Winner Determination

Once the dispute window closes and the outcome is finalized through the resolution process, the system determines winners based on their bet positions matching the resolved outcome.

Payout Calculation Formula

Winners receive payouts calculated as follows:

Total Prize Pool = All USDC from losing outcomes + Accuracy Bonus

Individual Payout = (User's Winning Shares / Total Winning Shares) × Total Prize Pool

Claiming Process

Winners claim their payouts through the Basis dApp:

1. Navigate to the resolved event page

2. Click "Claim Winnings" button

3. Confirm transaction in wallet

4. Receive USDC directly to wallet

There is no time limit for claiming winnings. Payouts remain available indefinitely in the smart contract.

Example Payout Scenario

Event: "Will Bitcoin reach $100,000 by December 31?"

Total "Yes" pool: 10,000 USDC (40% of bets)

Total "No" pool: 15,000 USDC (60% of bets)

Outcome: Bitcoin reaches $100,000 ("Yes" wins)

Winner with 100 USDC bet on "Yes" receives: (100 / 10,000) × 25,000 = 250 USDC (2.5x return)

Risk Management

Stable+ Token Advantages

The use of Stable+ technology for Predict+ tokens provides unique risk management benefits:

• Price Floor Protection: Tokens cannot decrease below floor price

• Incentive Alignment: Fee structure encourages holding positions until resolution

• Reduced Volatility: Up-only mechanics reduce panic selling

Resolution Security

The multi-layered resolution process provides robust security:

• Bond requirements deter frivolous disputes

• Economic penalties for incorrect resolutions

• Basis Army provides decentralized final arbitration

• Multiple oracle sources reduce single point of failure

Peer-to-Peer Marketplace

The decentralized nature of the marketplace provides inherent risk mitigation:

• No counterparty risk (smart contract holds all funds)

• Transparent pool sizes and odds visible on-chain

• Immutable betting records prevent manipulation

• Automated execution eliminates human error