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Our mission is to build the most efficient, reliable, and accessible prediction market available. To that end, nearly every component of our software is on-chain, and all markets are resolved by a lightning-fast multi-sig Oracle.
SageBet has 5 principle components: a market factory, individual market contracts, conditional tokens, collateral tokens, and an oracle. See below for details.
Each market is created by a multi-sig transaction that calls the-market-factory. Each market contract has several configurable parameters: a JSON string that contains the market tile, market subtitle, outcomes names (e.g. "Yes/No" or "Team Canada/Team Mexico"); minimum trade size (usually $1); the fee amount (see Fees); and the fee recipient.
All markets are built on top of an on-chain orderbook that contains open orders waiting to be filled. Take a look at the example below:
All SageBet markets are built with Gnosis Conditional Tokens. This is an open-source, thoroughly-audited token class (ERC-1155) that SageBet uses to represent market shares. When a market is resolved by the Oracle, holders of the winning set of conditional tokens can claim their pro-rata share of the market pot.
Currently, all SageBet markets are traded and settled with USDC. Technically, any ERC20 token can be set as the collateral token for a given market, as it is a configurable parameter. Until further notice, SageBet will exclusively use USDC.
SageBet settles all of its markets via a multi-sig, using the resolveAndCloseMarket() function on the Market Factorycontract. Real-world events such as sports games and political races are monitored in real-time and resolved as soon as their outcome is public of the market' specified resolution time has passed.
There have been many oracle designs proposed and tried for on-chain prediction markets, each with their own advantages and limitations. It is a classic case of the "blockchain trilemma" as illisutrated below:
You choose amny of the two, but never all three.
SageBet decided to prioritize Security and Speed by opting for a multi-sig oracle that settles the outcome for each market. This diminishes the decentralization of the system, but the benefits of a fast and secure oracle were preferred. Inevitably there are trust risks with semi-centralized solutions — the only means to ameliorate these risks for users is transparency, communication, and establishing a strong, spotless record of properly resolving markets quickly and fairly.
We will be adding more documentation soon.