This tutorial explains how to enjoy Forecastory for beginners.
1. What is a prediction market?
A prediction market is a derivative market that exchanges the options for a particular future event. As a prophet, you can bet on the outcome option that you believe most likely to happen. If you could predict the future correctly, you can get dividends. As a result of trading, the probability of an event is aggregated. This is the magic of a prediction market's mechanism.
For example, there may be prediction markets of
- Presidential elections
- Sports matches
- Price of stocks
- Winner of Novel awards
If you know something that others don't know about the future, that's your opportunity. You can make a profit by predicting the future with prediction markets.
2. Why Forecastory?
Forecastory is a new generation of prediction markets protocol.
The core features of Forecastory are
- Decentralized and peer-to-peer
- Unlimited liquidity
- Dynamic pricing for options
With Forecastory, you can not only make a profit from predicting a future event but also you can make a profit by participating earlier or creating a market that others want to join.
All markets in Forecastory go through the following steps.
- Market created
- Trade options
- Event Happens
- Result reported
- Stakes paid out to winners
Tradings on Forecastory happen directly between you and Forecastory smart contract deployed to Ethereum. You are expected to take full control of your funds and your actions. Your actions are always the results of your signatures generated by your wallet.
3. Crypto beginners guide
To use Forecastory, you need
- Purchase ETH
- Transfer ETH to a wallet
- Purchase DAI
3-1. Purchase ETH
First, you need to use an exchange to purchase ETH, Ethereum's native currency
Go to crypto exchange (List of credible exchange)
Set up a funding source such as your bank account. Purchase Ethereum (ETH) by exchanging your local fiat (i.e USD) for Ethereum. Purchasing ETH may take a few days for the first purchase, so now you may need to wait.
3-2. Transfer ETH and DAI to your wallet
After you bought ETH, you need to transfer it to your wallet.
Metamask is the most popular wallet provider for Ethereum based applications. Here are other wallet options
A cryto wallet enables you to use Ethereum web apps such as Forecastory. Create your metamask account and then store your 12 seed words. After account wallet setup, go back to your exchange and find the "Send" or "Transfer" function for your wallet. Transfer the amount of Ethereum you want to spend to metamask by entering in your address as copied from metamask in step 2.
Wait for the Ethereum to land in your Metamask wallet balance.
Once you see the Ethereum in your Metamask wallet, move onto the next section below!
3-3. Purchase DAI
The only accepted currency in Forecastory is DAI at this moment, which price is softly pegged to $1 USD.
After you transferred ETH to your wallet, you can do anything with your wallet. (Yes! literally anything! *as long as code is executable within smart contracts)
Optionally, you can get one from MakerDAO
and ALL SET! When you own some DAI, you can see the balance at your account page on Forecastory.
4. Getting started
Once you set up, you can enjoy Forecastory
The image below is an example market.
Each market in Forecastory has the following settings.
- Market question: The question about the future event
- Outcomes: Potential outcomes for the future event
- Currency: The currency used for the market.
- Market end date: Trading ends at this moment.
- Resolution date: From this moment on, anyone can report the result of the event.
- Sell option: When this option is disabled, people cannot sell option tokens. (Options are buy-only tokens)
- Start price: The start price of each option token.
- Price increment: The price of each option increases as this number as one option token issued.(Increment rate is universal within a market)
- Min investment value: Market participants must invest above this threshold.
With each market, you can take basically two strategies.
- Invest(Buy and hold)
- Trade(Buy and sell)
Let's say the market has 99 DAI volume at a moment. It means that the market has 99DAI volume in total.
In the outcome options area above, there are three options, Yes, No, and Invalid. If you believe the probability of the Yes option is higher or lower than your belief, you can take advantage of the arbitrage opportunity by buying the Yes option or buying another option that you believe the probability should be higher than at the moment. (If you have the Yes option shares, you can also sell it.) After the market end time, you are no longer able to trade options.
You can invest in buy options from the buying section below.
After the resolution time, when the result is finalized by the oracle, you can claim your return.
In this case, if the result was 'No', which means someone else had been elected as the president of the US, the No option holders can get the proportional share of 99 DAI.
When an option in a market is popular and invested much, the price of that option become higher. In that case, there is an opportunity for option holders to sell.
Your option holdings are displayed in the position section of the account page.
You can create markets. You must understand the rules applied to every market created on Forecastory. Otherwise, markets will be reported as Invalid.
You can check how a market looks like and works from a post about a real market the US presidential election market
7. Learn more
For FAQ, please visit FAQ
For the rules of Forecastory prediction markets, you can check them via Rules