The PlotX cryptocurrency allows people to plan the next possible outcome and be rewarded for correct predictions. This whole concept originates from forecasting markets. Forecast markets such as sports betting are expected to reach a valuation of $155,49 billion in the US by 2024.
The markets were also supported by the adoption of online casinos and betting sites. In some cases, more than a few participants explored the power of technology blockchain to provide transparency in a market that has been kept secret and under unfair settings.
With the growing popularity of open finance (OpFi), blockchain-based platforms are helping users to predict market direction and, like the traditional forecast market, be rewarded if their predictions are correct. PlotX is one of those platforms.
In this article, we will discuss:
What is PlotX (PLOT) token?
Built on the Ethereum blockchain, PlotX is a network that aims to make trading in decentralized finance (DeFi) “simple and fun!” by enabling a prediction market with cryptocurrency traders in mind.
At the heart of the platform is a decentralized application (Dapp) that allows virtual currency traders to predict the future of Bitcoin (BTC), Ether (ETH), among other cryptocurrencies on a weekly, daily and hourly basis. The project also considers decentralized finance (DeFi) platforms such as Uniswap, which use an automated market maker model.
Notably, the decision to provide market forecasts stems from somewhere, namely, the problems found in centralized platforms offering forecasting services. Key issues include the high cost of using conventional systems, ensuring fairness and counterparty risk.
While the creation of cryptocurrency-centric forecast markets had been attempted in decentralized systems, the timing was not ripe. Therefore, it saw little or no adoption.
What is the purpose and how does the PlotX token work?
As a DeFi-focused prediction platform, PlotX aims to power predictions based on cryptocurrencies using distributed accounting technology. It allows market creation in the chain using smart contracts. PlotX enables participation mining through a gamified experience, taking inspiration from yield farming or liquidity mining as used in the DeFi protocols.
In addition, PlotX seeks to offer instant rewards, short market cycles and employ a risk-spreading mechanism. Risk spread allows a user to adapt their exposure to mitigate losses arising from wrong predictions. With this option, users lose about 20% of their total prediction bet.
However, the stake can be customized to mirror users' risk appetite, starting at 1x, 2x, 3x, 4x and 5x. Note that the greater the risk, the greater the reward and potential loss.
Who is behind the PlotX cryptocurrency?
The project follows Abraham Lincoln's popular mantra that the future can only be predicted by visualizing it in the present. PlotX has a dedicated team led by Ish Goel, Nitika Goel, Kartic Rakhra and Satheesh A. In addition, the team's vast experience is spread across many sectors.
For example, Ish Goel has been involved with Ethereum since 2016 and won the London Blockchain Week Hackathon in 2017. Meanwhile, Nitika Goel led the development of Nexus Mutual and co-founded GovBlocks. Major PlotX partners also include GovBlocks, Matic and Venrai.
Governance in PlotX token
The protocol employs a community-based governance model through the use of an autonomous decentralized organization (DAO) that votes and initiates proposals on system changes.
This approach plays a vital role in providing on-chain governance in a blockchain-based prediction market. However, for non-blockchain dispute resolution, the platform has an advisory board. The council has no rights to funds and its functions weaken as the community grows stronger.
To fuel this model, the platform mirrors the approach used by Nexus Mutual. In addition, it incorporates smart contracts built into the GovBlocks network to strengthen community engagement.
The platform also uses smart contracts that allow decision points to be edited, token holders to raise issues, as well as allow token holders to reach an agreement.
PlotX Token Components of a Healthy DeFi Prediction Protocol
How does PlotX cryptocurrency create a healthy DeFi prediction protocol? This occurs through several features in the PlotX protocol, as follows:
- Market making – deals with creating the network of different cryptocurrency pairs for forecasting. A typical market on the platform might be “What will the ETH price /BTC on Oct 17 at 18pm GMT”.
- Market Positioning and Pricing – A position can range from neutral to high or low and can only be influenced by the user's experience in digital currency trading. A formula is used to calculate a chain position price. Odds are changed regarding participation.
- Buying a position – Buying a position requires the user to wager cryptocurrencies such as ETH. A user can buy in more than one position, depending on the amount of token wagered, the amount needed for each position, etc.
- Trading Positions – Here, users can trade positions decentrally and exit positions before they expire.
- Market settlement – closing prices are calculated from data provided by distributed oracles such as Chainlink.
- Market Reward Claims – Rewards are distributed as soon as the market closes. However, the distribution of rewards is stopped in case of dispute until the dispute is resolved. However, a dispute can only be raised within the cooldown period, given after the market closes.
PlotX Alpha and PlotX Token (PLOT) Use Cases
Alpha is a version of PlotX on Ethereum's Kovan testnet network. Although the system makes extensive use of ETH when making predictions, it has a native token called PLOT. The token allows:
- P2P Commissions.
- Referral Mining – Existing users can invite friends and family and get rewarded.
- Community Mining – Attract more people to the platform using airborne rewards.
- Play mining – users are rewarded for wagering PLOT before participating in market predictions.
- Governance Mining – The voting strength depends on the amount of PLOT wagered.
- Liquidity mining via staking.
Conclusion
As it is a non-custodial protocol, PlotX users access the platform using their MetaMask wallet or any of their mobile wallets. Network users can also log in using their email addresses. However, they need to integrate centralized financial bridges to reap the benefits of a forecast market in the DeFi world.
The design's reliance on the Ethereum blockchain and the ETH token allows its users to optimally interact with the OpFi protocols, since most of them are built on the same chain. With online forecasting markets gaining traction in the centralized space, PlotX offers superior service to those in the decentralized world.