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The introduction of cryptocurrency and blockchain has taken the world by storm and every currency which exists for transactions and liquidity requires a market. Prediction markets are where people use the knowledge and data of others to make their own decisions regarding their investments. Prediction markets work on the outcome of events and investments are made on these outcomes. The goal of a prediction market is to help the investor decide which predicted outcome they want to invest in. DeFi stands for decentralized finance which uses smart contracts to enable decentralized trading of finances in prediction markets. Working of DeFi consists of smart contracts that release payments and oracles which make sure the event occurred and which prediction came true.
Emergence of DeFi in Prediction Markets:
Prediction Markets have been present for a long time with the introduction of cryptocurrency such as Iowa Electronic Market but these markets are centralized. In other words, these prediction markets are governed by third parties which makes their credibility questionable as the data provided to the investors can be tempered depending upon the interests of these parties. This has given a place to DeFi in prediction markets which is capable of eliminating all the doubts that a user or investor might have.
DeFi has been emerging rapidly in the prediction market for many reasons. Firstly, DeFi is decentralized which means that there are no controlling bodies of the data or predictions. The predictions are purely based on data from other users. It provides complete transparency which means that there are no hidden charges or cuts in the profits or investments of the user. There are no restrictions in these prediction markets. Anyone can access these prediction markets from anywhere in the world and bring liquidity to them. Which makes these markets easier to access, priority among users, and diverse. Some existing markets based on DeFi are PlotX and Augur which are built on Ethereum, which is the most actively used blockchain.
New Player is Revolutionizing this Space:
Cryptocurrency with its emergence was all about being in control of the investor without third parties like banks and governments, but centralized markets did not make it possible in the cyber world. However, Meridian Network is set to make this vision true. It is completely non-profit and community-based which means it is governed by investors or users who are part of the Meridian Network community. This is attracting the users towards the network which is developing the right system by giving complete control to users by introducing DAO
(Decentralized Autonomous Organization) which makes proposals and votes by the $LOCK holders. $LOCK is a utility token that runs on the Meridian Network. Also, they are developing a simple and user-friendly UI/UX interface which is making it really simple to use and accessible for the average person, without needing to understand all the tech behind it. Due to all these reasons DeFi in prediction markets is emerging, growing rapidly, and becoming a choice of people who are into cryptocurrency. Once, Meridian Network launches its Alpha within the coming 3 months, it will be creating a DeFi market governed by users. Which without a doubt is what the masses want.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.