Prediction Position Trading
Maximizing Flexibility and Profit Potential
The Prediction Position Trading feature enables users to auction or sell their prediction positions both during an active quest and after its closure. This innovative approach brings additional liquidity to the market, allowing participants to strategically adjust their positions based on cumulative information, while creating new revenue opportunities for both users and the platform.
How It Works
Issuance of Position NFTs Upon making a prediction (i.e., casting a vote in a quest), the user is issued a unique Prediction Position NFT. This NFT contains the relevant information about their prediction, such as:
The amount voted
The selected outcome (e.g., Trump or Harris)
The time the prediction was made
Trading on the Marketplace Users can list their Prediction Position NFTs on the marketplace, offering them for auction or sale:
During the Quest: Before the quest closes, users who may need instant liquidity can auction or sell their positions. Buyers may offer a lower price than the original staked amount, reflecting the higher risk taken before resolution.
After Quest Closure (Pre-resolution): After the quest closes but before the final resolution, positions often gain value based on new information. Sellers can capitalize on this by offering positions at higher prices, especially if the event is likely to resolve in favor of their prediction.
Instant Cash Out Option with Penalties Users can opt to sell their positions early if they need instant liquidity. This typically comes with penalties, as buyers will often offer less than the staked token amount, reflecting the uncertainty of the outcome.
Post-Closure Value Fluctuation As new information emerges between quest closure and final resolution, the value of prediction positions can increase or decrease. This allows traders to adjust their positions strategically, benefiting from updated market sentiment and earning potential.
Revenue Generation for Platform and Content Creators Every transaction involving a Prediction Position NFT triggers a fee for both the platform and the content creator who designed the quest. This provides an additional revenue stream while fostering an active marketplace for prediction positions, even after the total pool is fixed.
Final Resolution and Rewards Upon final resolution of the quest, holders of the correct-answer Prediction Position NFTs can claim the rewards. This provides a dynamic exit strategy for those who want to cash out early or capitalize on market fluctuations.
Smart Contract Logic
Prediction Position NFT Issuance
Each time a user casts a vote or makes a prediction, a unique Prediction Position NFT is minted.
This NFT stores the user’s prediction, stake amount, and other metadata related to the quest.
Marketplace Trading
The smart contract allows users to list their Prediction Position NFTs for sale or auction.
Buyers can submit bids or directly purchase the NFTs. The contract handles ownership transfer and ensures that the new owner inherits the position.
Penalized Early Cash Out
When users sell their Prediction Position NFTs before the quest is resolved, the marketplace logic incorporates the likelihood of discounts, reflecting market sentiment and the risks involved in predicting outcomes before they are finalized.
Post-Closure, Pre-Resolution Adjustments
After the quest closes and before the event is resolved, the smart contract allows further trading of the Prediction Position NFTs, giving users flexibility to adjust positions based on updated information.
Fee Distribution
A percentage of the transaction fees from trading Prediction Position NFTs is automatically distributed between the platform (Polyquest) and the content creator who originally set up the quest.
Claiming Rewards
Once the event outcome is finalized, the contract verifies the Prediction Position NFTs that are associated with the correct prediction.
Holders of these NFTs can then claim their rewards through the smart contract, while the incorrect prediction NFTs are rendered void.
Token Utility
The Prediction Position Trading feature enhances the utility of $POLY tokens by providing additional avenues for user engagement and profit generation:
Marketplace Fees: Trading Prediction Position NFTs incurs fees, payable in $POLY or other accepted tokens. This drives demand for $POLY and ensures continuous liquidity within the ecosystem.
Staking & Rewards: Users who stake $POLY can unlock premium marketplace features, such as discounted transaction fees or exclusive access to certain prediction markets. This encourages holding and staking of the platform’s native token.
Trader Incentives: Those wishing to trade positions can leverage $POLY for better positioning in the marketplace and higher visibility among users.
By introducing Prediction Position Trading, Polyquest creates a secondary market for predictions, enhancing the overall liquidity and flexibility of the platform. Users gain the ability to adjust their positions dynamically based on new information, while the platform generates additional revenue through marketplace fees, all while ensuring that the $POLY token remains central to the ecosystem.
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