Okay, the impact spread markets are interesting than I expected:
- We could have verses for features X and Y, each tied to a protocol upgrade like OP_CAT or OP_CTV (examples are for illustrations only).
- The team can deploy the upgrades to their respective verses.
- App developers can build and deploy apps in each verse to show support for unique things that can be built with each upgrade
- User and developer activity can inform prediction market pricing, updating resolution probabilities.
This also applies to futarchy markets, enhancing decision-making.
Prediction and decision markets typically limit participation to those with capital. Verses with protocol upgrades let developers contribute their time. While developer activity doesn’t directly alter market mechanics, it provides important feedback for market participants.
Since perp deployers can arbitrarily set the collateralToken in HIP-3 (instead of USDC) then we can use verse assets to build a bunch of interesting markets:
- News Trading: Traders currently just long/short markets after new events take place. With verse tokens, they can just long/short the market conditioned on the event taking place. For example, firedUSD/notFiredUSD from the article can be used as collateral or quote tokens for BTC/firedUSD and BTC/notFiredUSD markets. Now, traders would just long BTC/firedUSD if they believe a firing to be bullish and short the notFiredUSD market if they believe the lack of firing to be bearish. AFAICT this has two positive effects, we now know how the world will react to some news before the event happens (more information!) but also traders don’t have to rely on being the fastest to take an action (it is possible the need for speed moves to each verse though).
- Leveraged Cross-Verse Markets: I think you can make perp markets for cross-verse tokens of the format firedUSD/notfiredUSD. Since, perp markets enable leverage, you can now lever long prediction markets for the first time?
- Impact Spread: Let’s say there are two events: Shipping feature X on Solana roadmap and shipping feature Y on Solana roadmap. The difference in prices between the two markets would showcase the relative sentiment of the market between the two features, enabling prioritization. This also makes this system feel more like futarchy, although, it has no direct bearing on the event taking place.
Note: on resolution a lot of these markets blow up since the denominator may go to 0, but this can be dealt with. Making these markets liquid is likely also a challenge, but still seems possible.
Hyperliquid?
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