Prediction Markets and Futarchy with Zeitgeist

About this Episode

This week, Jorrin Bruns (Support Engineer, Parity Technologies) is joined by Zeitgeist’s founder Logan Saether, and CIO, David Perry. Zeitgeist is a Substrate-based decentralized network for creating, participating in, and resolving prediction markets, and exploring the potential of futarchy for governance.

They discuss prediction market systems, futarchy for decision making, mitigating market biases, how a prediction market works, and its diverse applications — from improving on-chain governance to choosing political candidates and predicting parachain slot auction winners.

The team also describes the next steps for this project in terms of usability and adoption, such as parachains leveraging futarcy, developing an SDK to speed up prediction market app deployment, and their plans for Zeitgeist to become a Kusama parachain.

Links
Zeitgeist’s website
The Wisdom of Crowds, James Surowiecki
Keynesian beauty contest
Futarchy
Kusama Derby Conclusion Results

Highlights
01:05 What is Zeitgeist
08:10 Prediction market systems
10:27 Futarchy for decision making
13:20 Zeitgeist Substrate pallet recipe
18:00 Automated Market Makers
20:15 How a prediction market works
26:14 Prediction market efficiency given subjective information
27.58 Mitigating prediction market biases and incentives
30:02 Prediction markets within politics
34:15 Types of prediction markets
38:20 Building an SDK
41:20 Zeitgeist plans as a parachain