OpenPredict is an infrastructure for creating liquid live predictions, primarily focused on financial instruments, particularly default swaps for insurance against protocol failures and options for hedging against extreme volatility.

The mission for the product roadmap built upon this protocol is delivery of advanced and eminently needed tools for hedging risk in the DeFi market.

Each risk, be it loss associated with idiosyncratic risk or loss of funds provided to a DeFi liquidity pool, is deemed as an event. The protocol generates a tri-smart contract system for each event, one each for net escrow, minting of "o" tokens for those who expect the event to happen, and minting of "io" tokens for those who expect the event to not happen.

OpenPredict brings predictive options in an open format, expanding the breadth and innovative quota of products in the DeFi market. It has a strong go-to market among the DeFi user base as it provides predictive options as an insurance against failure of DeFi protocols (i.e. lending pools), and then further expands the existing DeFi user base by providing decentralized financial instruments that are otherwise only accessible in centralized markets; this includes provision of risk hedging for traders, through a decentralized options market.

Users have the ability to launch almost any event which can be used to create decentralized hedging or risk insurance opportunities. The main focus of OpenPredict is risk hedging for traders, insurance against protocol failures through default swaps, and highly leveraged trading for assets with limited order book depth (or even those with no order book, such as unlisted assets).

The protocol is openly accessible and can be extended for other products seen as viable by other developers. There is no limit to the form of marketplace that can be generated through predictive options, as long as there's sufficient user interest.

OpenPredict is the first protocol capable of turning live predictions into liquid assets. This is achieved by the rapidly growing lego-like framework of the DeFi market.

Organized and liquid markets have always been difficult to access for niche assets. Predictive options carry an intrinsic value, as they represent a probabilistic monetary payout. However, having any specific, expirable event listed across an official market has never been viable due to associated risks.

This, however, has changed with the launch of permission-less DeFi swap pools that have a protocol-driven automated market-maker, as is the case with Uniswap and Balancer. The current stage of the DeFi space enables the first-ever opportunity to costlessly create liquid markets for predictive assets.

This paves the way for predictive options that can function as insurance against protocol failure, hedging against heavy idiosyncratic risk, and highly leveraged DeFi trading via options.


Hedging: Despite the dangers of going "all in," many traders in the cryptocurrency space, driven by their belief in a dire need for change in the global monetary system, tend to ever-expose themself to a single asset. This generates severe idiosyncratic risk which can lead to sudden sharp falls in portfolio value.

Meanwhile, there are dedicated long-only funds and trusts in the crypto space who, per thesis and mission, are dedicated to a simple buy and hold strategy. Such funds and trusts are also severely at the risk of idiosyncratic risk.

OpenPredict provides retail and institutional traders and holders the opportunity to hedge their risk in catastrophic events by issuing options that can reward them in events of extreme volatility, as seen on the crash of March 12, 2020.

Insurance: OpenPredict Protocol can enable the creation of products similar to default swaps. Such financial instruments have traditionally served investors who seek at least some monetary recuperation in case a company goes bankrupt.

While protocols cannot go bankrupt, they can be exploited of the funds they hold on behalf of liquidity providers. This is similar to bankruptcy, as the protocol can end up with less funds than owed to liquidity providers.

OpenPredict creates default swaps for established market protocols, like Compound, that hold significant funds on behalf of LPs. These default swaps provide LPs partial or complete coverage for funds lost in case of a protocol exploit.

Leverage: While volume across decentralized exchanges has surged in 2020, the vast portion of market volume remains at exchanges. As does order book depth.

Order book depth is critical for highly leveraged trading, and as DEX lack depth, highly leveraged trading has not surfaced in DeFi yet. Options trading, though, does not require order book depth in DEX as oracles capture price from all markets, even centralized ones.

OpenPredict's provides trading that follows robust, accurate pricing and heavily leveraged trading ability through options markets. A powerful advantage of an open market for options is that it can even enable leveraged trading of assets that do not have a market yet, and can enable a form of synthetic futures trading through options that expire upon asset listing.

Holders of the OpenPredict token have access to numerous benefits thanks to a robust incentive system. OPT's demand is driven by the product-rich roadmap.

Minting Fee: For each OpenPredict event, all participants pay a 1% minting fee, which is used to buyback OPT from the market, and then burn them. This fee is discounted if the minting address holds OPT.

Escrow Maintenance Fee: At the point of pool distribution to the token holders that won the event, 1% is deducted prior to distribution. This Escrow Maintenance Fee is distributed to OPT stakers. This fee is discounted if the minting address holds OPT.

oSwap Discounts: oSwap trading fees are 0.15%, but this only applies if the traders hold OPT tokens. If fees are paid without using OPT tokens, the fee is 0.2%. This 25% discount incentivizes active predictors to constantly hold OPT.

TrustPredict Maintenance Fee: TrustPredict will charge a trustless escrow fee of 0.5% for predictions that are shorter than 3 months, and 1% for predictions that are longer than 3 months. If the prediction fee is paid in OPT tokens, the fee receives a 50% discount.

If fees are paid in OPT, the tokens are burned. If they are paid in any other digital asset, the tokens are distributed to OPT stakers.

OpenPredict is the underlying protocol that allows users to turn live predictions into liquid assets. Like any other protocol, it allows others to develop products on top of it.

OpenPredict has a wide array of upcoming products developed by the team, upon the OpenPredict protocol. These products are aimed at satisfying the high demand for hedging and insurance options in the cryptocurrency space.

Further, SDKs will be available to external parties to launch niche predictive options.

Open Predictions
Some predictive events are neither price-based nor involve any cashflow, like elections. For such events, an open prediction is launched without any fixed odds, enabling the odds to be settled by market liquidity on each side of the outcome.

oSwap
All "o" and "io" tokens will be traded on Uniswap, Balancer, or any other swap pool. This enables fee generation for minters. However, Uniswap's 0.3% fee may make rapid trading of "o" or "io" tokens discouraging. oSwap will be a swap network dedicated to the trade of "o" and "io" tokens of every event launched via the OpenPredict protocol.

oSwap will have a 0.15% fee, which is half of Uniswap's 0.3% fee. At initiation, OPT tokens will be airdropped to minters who create liquidity on oSwap to drive more usage to oSwap. The swap pool will be a fork, with a fee adjustment for "o" and "io" tokens.

TrustPredict
A simple decentralized application with a friendly interface that enables anyone to launch a 1-on-1 prediction, without the need of a middleman for escrow.