Gnosis Devcon2 Shanghai

forecast the future

Why? - building blocks

• building blocks like Identity, reputation, exchange, auctions, registry

• economic building blocks • interface into real world through

economic incentives • prediction markets

Identity

….

Registry

BASIC TOKEN CONTRACT (HOLDS COLLATERAL UNTIL ONE OF THE

OUTCOME TOKENS IS REDEEMABLE FOR THE COLLATERAL)

Oracle

COLLATERAL TOKEN

TOKEN OUTCOME 1

TOKEN OUTCOME 2

TOKEN OUTCOME N

basic - functions• Put in n collateral -> create n of each outcome token

buy_all_outcomes() • Value of one outcome token always <= collateral (1)

• Redeem a full set of outcome tokens for the collateralredeem_all_outcomes() • value of complete basket is always 1

• Redeem winning outcome (only if oracle has set it)redeem_winning _outcome() • if resolved: winning outcome token = collateral • all others = value 0

Buy/ sell information – remove uncertainty

• price = forecast • fund automated market maker to have a price • creates an algorithmic order book • every trade will move the price • always a clear price (0 spread between buy and sell) • direct financial incentive to trade if you disagree with the

forecast (price)

BASIC TOKEN CONTRACT (HOLDS COLLATERAL UNTIL ON OF THE

OUTCOME TOKENS IS REDEEMABLE FOR THE COLLATERAL)

When will Casper go live?

COLLATERAL TOKEN

before Q2 2017

Q2-3 2017

after Q2 2017

Creating an incentive – setting up a bounty

• Create an event on something you want to happen • sell/send/auction of tokens to those who can make it happen

BASIC TOKEN CONTRACT “Bitlicense” changed

in NY in 2017

COLLATERAL TOKEN

YES NO

Hedging – insure yourself

• insurances = bets (fire insurance = bet that your house will burn down) • predict/bet on the event you want to hedge against

BASIC TOKEN CONTRACT Is the flight too late?

COLLATERAL (100)

YES (100) NO (100)

INSURANCE PREMIUM (10)

POTENTIAL PAYOUT (90)

Hedging – Challenges

• need to fully collateralise • no insurance in the world can cover ALL potential claims • building trustless systems is (relatively) easy with unlimited

capital • -> use basket of “no outcomes” as collateral

Collateral Basket

BASIC TOKEN CONTRACT Earthquake in SF

COLLATERAL (100)

NO Earthquake in India

NO Flood in Netherlands

Collateral Basket

BASIC TOKEN CONTRACT Earthquake in SF

COLLATERAL (100)

NO Earthquake in India

NO Flood in Netherlands NO Flood in SF

Collaterals in basket needs to be independent

BASIC TOKEN CONTRACT Will the price of ETH be 0

ETH

YES NO

dependencies

BASIC TOKEN CONTRACT Oracle

COLLA

TOKEN TOKEN

BASIC TOKEN CONTRACT

TOKEN

TOKEN TOKEN

BASIC TOKEN CONTRACT Event A

COLLA

A 1 A 2

BASIC TOKEN CONTRACT

B1 B2 B1 B2

dependencies

Event BBASIC TOKEN

CONTRACT

A 1 A 2

BASIC TOKEN CONTRACT

B1 B2 B1 B2

Event BBASIC TOKEN

CONTRACT

• if independent B1A1/B2A1 = B1A2/B2A2 • no insurance in the world can cover ALL potential claims • -> use basket of “no outcomes” as collateral

B1A1 B2A1 B1A2 B2A2

BASIC TOKEN CONTRACT

Sun will shine tomorrow

COLLA

YES NO

BASIC TOKEN CONTRACT

YES NO YES NO

dependencies

Price of ETH> $20BASIC TOKEN

CONTRACT

BASIC TOKEN CONTRACT

POLONIEX hacked

COLLA

YES NO

BASIC TOKEN CONTRACT

YES NO YES NO

dependencies

Price of ETH> $20BASIC TOKEN

CONTRACT

To Govern – Futarchy

• framework for decentralized governance (of DAOs) • continuous market on an objective of the DAO • anyone can submit proposal • market will decide whether or not it gets more likely to achieve

the objective under the condition that the proposal is implemented • if so -> automatically implement the proposal

BASIC TOKEN CONTRACT

Gnosis platform volume > x

COLLA

YES NO

BASIC TOKEN CONTRACT

YES NO YES NO

Futarchy for the Gnosis Fund

Fund sport betting interface

BASIC TOKEN CONTRACT

Roadmap to – Futarchy

• measure how well forecasts for objectives perform • measure how well conditional forecasts perform • add incentives to manipulate • as soon as the Gnosis security audit is done we will start those

experiments

BASIC TOKEN CONTRACT

Win the Game?

COLLA

YES NO

BASIC TOKEN CONTRACT

move 1 move n

Can we challenge Alpha Go?

move 2

BASIC TOKEN CONTRACT

move 1 move n move 2

next move?

Meet us tonight for drinks

WeChat QR code slack.gnosis.pm