Golem and Streamr to cooperate

If there’s one thing we’ve learned in our blockchain life, it’s the immense value of the community. We’re really excited about the opportunity to work with the talented people in the space, and to help build resilient and decentralized infrastructure to power the hugely scalable Ðapps of tomorrow.

We’re also humble in front of such prospects. We’re working on the frontiers of software technology and cryptographic methodology, and we fully realize that there’s lots of hard work in front of us.

Given the challenges we face, we’re absolutely delighted to have found a great partner to work with. Many of our readers are undoubtedly familiar with Golem, one of the true pioneers in decentralized computing. A while ago, Streamr and Golem teams were introduced to each other by common friends, and a number of stimulating meetings and brainstorming sessions ensued.

In these meetings it has become abundantly clear that there is a great amount of overlap between the two teams’ visions and roadmaps. As announced yesterday, Golem and Streamr have therefore decided to formally co-operate on the shared part of the technology stack. Read the full story in a guest appearance by Henri (Streamr CEO) on the Golem blog here.

Photo the courtesy of La Fanfare en Pétard.

If you want to keep track of the cooperation with Golem and about Streamr in general, please join our Slack channel. Fists in the air!

Posted by / July 13, 2017

Do-It-Yourself Real-Time Prediction Market With Streamr

What is the most powerful prediction engine in the world? A crystal ball? A deep neural network? The human brain? The collective brainpower of mankind?

The collective wisdom of the crowd (including algorithms too) can produce unbeatable future estimates of asset values, sports outcomes, and presidential elections. Prediction markets attempt to capture this wisdom by creating a mechanism in which probabilities emerge as a result of collective betting. This is similar to how company valuations emerge on the stock market as the result of collective bidding. Both phenomena are based on the efficient-market hypothesis. For an entertaining exploration of the ideas, “The Wisdom of Crowds” by James Surowiecki is very much worth reading.

To realize the relationship between betting and prediction markets, consider a simple betting game with only two possible outcomes: “up” or “down”. Say, you witness a situation where many bets have already been placed, and 90% of the bets are on “up” and only 10% on “down”. Which would you consider the much more likely outcome?

In the blockchain space, projects such as Augur and Gnosis are building decentralized prediction markets based on Ethereum. Inspired by these, we wanted to build a real-time version which leverages our data platform and the visual editor. The demo is based on the streaming real-time ETH/USD price feed from GDAX, an Ethereum smart contract to hold bets and handle payouts, and a Streamr canvas which keeps track of the prediction rounds. It also acts as an oracle, calculating the correct outcome and reporting it to the smart contract.

In the demo, participants can predict ETH/USD price changes 5 minutes into the future. This is a simple game where the binary outcome is either “up” or “down”. Submitting predictions for a round closes 5 minutes before the resolution. To incentivize correct predictions and disincentivize incorrect ones, players place bets in ether to back their predictions. Bets placed on the incorrect outcome are distributed to the winners in proportion of the bets.

Obviously, the distribution of bets will only give meaningful predictions on a market with enough liquidity (players), which our little demo may not have at all times. 🙂

This example works in the Rinkeby testnet. The chart below, embedded from the Streamr canvas, shows the recent ETH/USD price and the outcomes of the most recent 5 min prediction rounds. The demo is live and interactive. Enter your bet in ETH, and press either the “up” or “down” button to lay your (crypto)money down!

In case the betting controls are not visible, your browser is not blockchain-enabled. Try the Metamask plugin for Chrome, or Mist, and get some test ETH from the Rinkeby faucet or by asking someone on our Slack.

The payout logic is coded to this smart contract which is called by the Streamr canvas that calculates the correct outcomes and drives the above chart. An embedded view of the canvas is shown below (open it in full screen or in the editor).

Questions and comments about this post and Streamr in general are appreciated! Join us on Slack, and of course feel free to follow us on Twitter as well.