📈Prediction Market

Overview

Fyde's prediction markets will enable users to guess which token in the Liquid Vault outperforms. In doing so, users will be able to constantly interact with the gamified Liquid Vault, and obtain a source of revenue in $FYDE for accurate predictions.

In order for users to access the prediction markets, users first need to stake $FYDE for veFYDE. This can be done on the Earn tab:

Prediction Markets Emissions

Description

Fyde will follow a two-stream $FYDE emission process to reward token holders:

1. Voting-Based Emissions: $FYDE token holders who have locked their tokens (veFYDE holders) can use their voting power to determine which asset depositors should receive emissions. For example, if all veFYDE holders vote for $ETH during an active voting period, all users who have deposited $ETH during that time will receive $FYDE token rewards proportional to their deposit value.

2. Prediction Market Structure: Users can vote for any asset currently in the vault in a prediction-market style system. Rewards will be allocated to users who vote for tokens that achieve the best price performance over the subsequent voting period.

Below is an overview on the emissions process for Fyde's prediction markets.

Technical Overview

Users vote using their veFYDE balance on a set of tokens within the vault $T_i$. They participate in a prediction market that rewards them for selecting winning assets. 40% of epoch $FYDE emissions are allocated to users who voted for assets that outperformed during that epoch.

Performance is measured based on the percentage price change of the asset within the epoch:

$$\Delta P_i = P_i^n - P_i^{n-1}$$

The price change of the overall vault is calculated as:

$$\Delta P_T = P_T^n - P_T^{n-1}$$

The share of epoch emissions that each asset is entitled to is determined by:

$$S_i = \dfrac{\text{max}(\Delta P_i - \Delta P_T,0)}{\sum_i \text{max}(\Delta P_i - \Delta P_T,0)}$$

The total $FYDE reward allocated to each asset $R_i$ is then calculated as:

$$R_i = S_iR_T$$

where $R_T$ = total $FYDE reward for the epoch.

The asset reward ratio $S_i$ is computed by evaluating the relative price performance of each asset compared to the total vault:

$$S_i = \dfrac{\text{max}(\%\Delta P_i - \%\Delta P_T,0)V_i}{\sum_i \text{max}(\%\Delta P_i - \%\Delta P_T,0)V_i}$$

Finally, individual user rewards are determined by multiplying the asset reward share by the proportion of the user’s veFYDE balance used to vote on the asset relative to the total veFYDE balance cast for that asset.

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