Hacker News Reader

Comment by throwaway13337 | Hacker News Reader

This is the first time I heard of this prediction market. Or, indeed, any heavily used real prediction market.

I wonder about two things:

1. Legality. Taking bets from Americans has landed other company owners in prison so I always wonder how they handle this on internet based gambling sites.

2. Oracle. Who decides who wins? It looks like it's decided by the company owning the platform. This seems a little dubious but maybe it works with the transparent nature of many of these sort of bets. Of course, they could always be in dispute.

The only information I could find on the oracle: https://dyor-crypto.fandom.com/wiki/Polymarket#Oracle_Method...

View on HN

1. Most of the markets I've looked at have a letter of no-action from the CFTC. But I'm not aware of one for polymarket.

2. I imagine that any suspicion of foul play would taint the waters, the same way a 51 percent attack could technically make you a bitcoin billionaire, at the cost of completely destroying bitcoin value. IEM works the same way, but is affiliated with a non-profit / government entity.

> a 51 percent attack could technically make you a bitcoin billionaire

That's not the case.

A 51 percent attack doesn't allow you to steal bitcoin, if that's what you have in mind.

A successful 51% attack lets you double-spend your coins, which is effectively the same thing. (Until the market catches on and BTC plummets, anyway.)

You are not going to be able to double spend a billion dollars. And it would cost hundreds of millions, possibly over a billion, to accumulate enough mining power to perform a 51% attack.

I don't know about the legality, but they've raised millions in VC funding. I suspect they have some kind of plan. They don't hold your money, all they do is act as an oracle as you note, which might help legally.

So far there's not been any major issues with markets resolving incorrectly, across over $100M of total volume and dozens of markets.

Predictit is also heavily used but limits individual bets to $850 per market. They have an official no action letter from the CFTC, so that's all legal.

Some predictions seem pretty vague, even if the probability of hitting edge cases is low. E.g. "Will ETH be above $1,500 on January 27th?" begs the question on which exchange? Or smaller ones like at which hour, does it have to be higher all day or just for a single trade, if for a single trade, if Alice sells Bob 0.01 ETH that day for $2k does that mean it was higher etc.

In general oracle role seems pretty hard when big money is involved.

For most of those there are specifics on how it will be resolved in the description. Usually a specific url they base it off.

They can hardly put all of it in the title.

> they've raised millions in VC funding. I suspect they have some kind of plan

In most cases the plan is to raise millions.

That page says "nor do we host any markets ourselves. Polymarket displays existing markets live on the Ethereum blockchain," so it's going to be a variety of oracles, none of them being Polymarket. They're just an aggregator.

The leading prediction market on Ethereum is Augur, which doesn't have trusted oracles at all. They have a way of crowdsourcing the bet resolutions, which has worked well so far.

Polymarket is in fact the oracle for all of the markets on their site. They don't host them in the sense that it's all on the blockchain.

Augur has no actively traded markets last I checked. It was good by the election but has been basically dead since. Polymarket has way more volume than Augur as of now.

Omen is more decentralized but doesn't have much volume. There's also a version of omen on level 2 on the xDai chain.

Isn’t the company holding your money anyway? Seems pretty reasonable to trust them to resolve the markets as best as they can, at least if they seem to be interested in staying in business for a while.

Interestingly, the setup used means they don't actually hold your money. It's all on the blockchain. They can resolve incorrectly but they can't outright steal everyone's money.

Can you withdraw your money? Presumably not, since that wouldn’t make for a very interesting market. So you’re still trusting the company with control over your money. The fact that there’s no direct incentive for the company to outright steal your money (unless they’re on the other side of every bet, lol) ought to make them even easier to trust!

You can withdraw your money of course. You have the key to your money and under the hood it's smart contracts between users.

> Or, indeed, any heavily used real prediction market.

Predictious, Bitbets and others have had some success before. It didn't work well because none of the cryptos are stable, and also - given the semi illegal nature and the need to rely on anonymous operators - exit scams happen every now and then.

Oracle is simply a URL where the info will be sourced from to resolve. For example, bloomberg.com/in/fo, or trusted.g.uy/bet12

Polymarket uses USDC, a stablecoin, and is run by a NYC based company with millions in VC funding.

Reply on news.ycombinator.com