"No Loss" Prediction Markets on SOL with Hedgehog!

My sports betting endeavours are strictly small scale. I find the premier league fantasy football provides a sufficient reminder of my inadequacies in this area without the associated financial losses.

Nevertheless I was intrigued when I heard about a new "no loss" sports prediction market on Solana under the name of Hedgehog Markets. "No loss" sounds like my kind of betting. But does the offer stack up?

How it works

In a nutshell:

• You stake 100 USDC with the platform.
• You receive game tokens.
• You gamble these game tokens on sports prediction markets.
• At the end of the competition a USDC prize pool is split between the best performers (the game tokens have no value).
• You receive your 100 USDC initial stake back (assuming all the smart contracts hold up!)

So is it really "No Loss"? Well, no.

During the competition Hedgehog invest your USDC on Port Finance - a Solana based lending protocol. The yield generated by the player deposits produces the prize pool. From looking at Port Finance this yield looks to be around 10% APY currently.

So, the prize pool is generated by your interest and this is what you will be losing (at least if your prediction abilities match mine). Or, perhaps more accurately, you are gambling with the opportunity cost of whatever else you could be doing with that USDC.

Still, it's an interesting innovation and combines a couple of areas that I think we'll see more of in the fairly short term:

Gambling
The last year in crypto has been defined by the rise of Decentralised Finance and an exposion of NFTs. Gambling is an area I think could be next to rise.

Of course there are plenty of gambling applications already on blockchains. The on-chain transparency, global reach and potential for low-cost development make blockchains the ideal platforms for disruption of the gambling industry.

When you bring DeFi ideas into the mix, such as the concept that individuals are rewarded for providing the liquidity to make the (betting) markets function efficiently then there is plenty of opportunity to develop something new.

I'll be watching that space.

Using staking and defi yields to subsidise usage
One of the great advantages of Hive is that it is free to use. This gives users a much enhanced experience in comparison to other blockchain social media outlets where every sentence and photo has to be weighed against its associated cost.

Of course, the costs that these other blockchains are facing still exist on Hive. But instead of a cost per transaction paid by users, the validation of the Hive blockchain is paid for out of general coin inflation. One way of looking at this (and there are a few) is that larger Hive hodlers subsidise the cost for smaller users.

This is an approach that I expect to see replicated by applications on PoS smart-contract blockchains. Those chains that remunerate users who stake their coins to secure the network bring an opportunity to circulate these rewards.

For example, an application may require that you deposit a certain amount of a coin for "free" use of their services, with this deposit reimbursed in full once you decide to leave. The pooled staking rewards can then be used as a means to finance the transactions.

It's not really free of course, just as the prediction markets above are not really "no loss" but it's an approach that may be more palatable to those that would be holding the coins anyway.

Not financial advice. Please do your own research.

Posted Using LeoFinance ^Beta