Automated Prediction Market Maker on Algorand

Proposals Round 8
#1

Name of Project:

Automated Prediction Market Maker on Algorand

Proposal in one sentence:
The Automated Prediction Market Maker on Algorand will allow users to hedge their investments and gain insights on the underlying assumptions of the market.

Description of the project and what problem is it solving:

Crypto assets are greatly correlated. The excessive interdependence between assets creates obstacles to the effective diversification of the investment portfolio.

Automated Prediction Market Maker provides further hedging and diversification unconditional on broader crypto market.

The AMM could also reduce information asymmetry and produce insights on market underlying assumptions

Useful Links

Artificial Intelligence on Algorand article

Algo AMM — Automated Prediction Market Maker on Algorand (Algorand Hackathon prize winner)

GitHub repository

Grant Deliverables:

  1. Integrate a machine learning model to the prediction market maker to better predict the prices of assets.
  2. Create an event resolution mechanism similar to UMA KPI options
  3. Create an improved web-based user interface to provide easy access to the prediction market maker
  4. Develop a comprehensive testing python scripts to ensure the accuracy and reliability of the prediction market maker
  5. Create a comprehensive documentation outlining the usage of the prediction market maker and its features
  6. we will submit the project to the algorand ecosystem and will apply to hackathons/conferences to speak about our experience and the project

P.S.
The project seems to get support from the community. Would really appreciate support on the development side, please reach out to fedotov_am#4849 in discord or twitter @pfedprog.

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#2

I understand there to be three main components to this plan

  • prediction market AMM system on Algorand
  • ML model to predict crypto prices, trading on the system
  • resolution mechanism à la UMA KPI options

Is that correct? If so: interesting, big project.

I’m understanding the crypto price predictor that interacts with the AMM would be open source and run by self-hosting interested actors that would provide their own liquidity.

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#3

Yes, that’s correct. The prediction market AMM system will be open source and available to anyone who wants to self-host and provide liquidity.
The ML model will be used to predict the crypto prices and the resolution mechanism will be based on UMA KPI options design. We also plan to create an improved web-based user interface to provide easy access to the prediction market maker and develop comprehensive testing python scripts to ensure the accuracy and reliability of the prediction market maker.

i think creating a perpetual feed of similar pools could enable better price mechanics than what is currently available on the market.

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#4

We have added Algo Amm to algorand ecosystem Algorand Ecosystem
and made a video overview: Automated Market Maker on Algorand - Algovera Update - YouTube

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