Venue One: Decentralized Prediction Markets on Algorand

Prediction markets are growing in popularity as more and more crypto users prefer to place wagers on decentralized protocols than on centralized platforms.

Read on to learn more about Venue One, a new blockchain-powered predictions exchange that is jump-starting operations. Venue One distinguishes itself by adopting Algorand as its underlying chain, which enables it to offer unmatched speed, flexibility, and security.

The Story of Venue One

Venue One is a decentralized, non-custodial prediction protocol that is built on the Algorand blockchain, which is the only chain that solves the blockchain trilemma.

It was started by George Cotsikis, who trained as an engineer and has more than two decades of experience working in traditional finance, mainly trading quantitative portfolios. He held senior positions at Salomon Brothers and Citigroup, which eventually acquired the former.

After the early 2000s, he worked for several high-profile investment management firms before founding the consulting company Mentat Innovations about nine years ago. Mentat is providing artificial intelligence (AI) and blockchain solutions for enterprises seeking to unlock the hidden value of their data. It has worked with the UK Government, major banks, hedge funds, telecommunication firms, and blockchain protocols.

Cotsikis’ experience in both traditional finance and blockchain helped Venue One build a predictions exchange that encourages fair odds and is customer-oriented.

On Venue One, users are able to take positions in sports, eSports, finance, events, and more, with a focus on short-duration markets and events. (While Venue One predicts football to be the biggest sport in the Venue One pool, it plans to put up markets for a variety of events to see which ones garner the most interest.)

Players can interact with the platform in three ways:

• Classic bets, in which demand and supply between buyers and sellers define the price or odds. Basically, people will bet on a yes or no outcome for particular events.
• Liquidity pools of mutual bets, in which the liquidity of the pool determines the outcome.
• Venue One is also working on a future exchange solution for financial assets and custom indices, which will probably be launched in 2022.

Basically, players can put collateral against their predictions and receive payouts in stablecoins.

The Venue One team has put much emphasis on user experience, designing its product for mobile use from day one.

One of the great things about this prediction protocol is that it enables users to deposit collateral and access payouts in stablecoins like USDC. Those who don’t operate with stablecoins can use the fiat and $ALGO on-ramps.

Given that USDC is a multi-chain stablecoin, users can seamlessly move their digital dollars from many major blockchains to access Venue One, making the onboarding process frictionless and convenient.

Besides the supported stablecoins, Venue One has its proprietary token — the VENO, which powers players and liquidity providing rewards.

Liquidity providers (LPs) can deposit funds while betting against certain outcomes to ensure that the market built around an event has enough liquidity. This creates high volume markets in sports, eSports, and other categories while helping LPs secure generous rewards at low risk.

For example, if a player is really certain about the outcome of a political race, they can turn to liquidity providers to borrow more capital than they have to stake more on the outcome of the race. In other words, liquidity providers offer more passive capital to the pool of users.

Venue One focuses on markets with clear outcomes and clear finalities, such as sports matches.

The final outcome on bets is determined using a hybrid approach, as it uses centralized, third-party data to verify outcomes. However, it eventually plans to decentralize by using on-chain oracles to verify outcomes.

Why Algorand?

While there are several popular prediction markets, they are mostly crypto-focused and cannot experience wider adoption due to high transaction fees caused by their underlying chains, slow execution of orders, limited choice of markets, and a user experience that leaves much to be desired.

By building its application on Algorand, Venue One solved most of these problems and directed all the focus on the user experience, developing a great product capable of competing with the prediction markets available in the centralized world.

Thanks to Algorand, Venue One provides the following benefits:

• Low fees — Algorand employs a consensus mechanism called Pure Proof of Stake (PPoS), which enables fast transactions at a low cost. If it went for other major blockchains, users could have ended up spending more than $50 to make a $100 transaction, which is not reasonable or feasible.
• Instant finality — on Algorand, every transaction reaches finality in less than five seconds. Elsewhere, it can take several minutes to more than an hour to fully confirm a transaction on Proof of Work (PoW) blockchains. A trading venue has to resolve prices in seconds at worst. When a player places a bet or trade, he has to know at which level they have traded immediately, not in half an hour.
• Security — Algorand is intrinsically a secure ecosystem since it relies on randomness as the main principle of how the committee of validating nodes is selected. Also, it provides a developer-friendly ecosystem that enables smart contract developers to avoid potential loopholes and bugs.

Additionally, Venue One has the opportunity to attract new users within the Algorand community, who already have trust for and experience with the platform.

Venue One is a non-custodial protocol. Users have full control over their wallets, private keys, and identities. The funds only interact with the protocol smart contracts, which is why it’s important to make them as secure as possible. Venue One’s smart contract infrastructure is audited by a third party.

Venue One also has a seamless integration structure, as users who hold USDC in any chain can trade on the Venue One platform. So, if you have stored value in another prediction market or blockchain, you can seamlessly bring it over to Venue One on Algorand, similar to how you can use US dollars in different countries.

While Venue One’s team is relatively small, the Algorand platform makes it feasible for teams to create complex marketplaces with small teams, a model that other Algorand projects can likely follow. Venue One found that its main problem didn’t lie in the technical side, as they didn’t experience any large issues building a decentralized project on Algorand.

Rather, its biggest issue has been finding the right team to market the project they built, as it’s difficult to find people with marketing savvy and the technical know-how to properly explain the project.

Because Algorand is a newer ecosystem, Venue One also faces less competition, making it easier for its project to stand out. Many more developed ecosystems will often have 5 or 6 similar projects competing against one another.

Speaking about Algorand, Cotsikis, who had previously done some consulting work for the network founded by MIT Professor Silvio Micali, said:

“I felt it would be fantastic to build a prediction platform, and we started discussing it and that’s how we started to collaborate more (with the Algorand team).”

Official Launch of Venue One

Those interested in placing predictions on the platform were able to join early as beta testers. In May of 2022, Venue One notified the beta testers that they would be able to test out the platform. The platform had complete functionality in the beta stage, and users were able to make predictions and offer feedback to the Venue One team. Venue One had over 8,000 applications and selected about 500 beta testers with experience in prediction markets.

Venue One plans to collect feedback for a few weeks, and then open the platform to everybody after a final audit, putting the launch date around the end of June. However, the official launch date will depend on the current conditions of the market.

When the platform is live, users will also immediately be able to onboard USDC from other chains.

Venue One currently has about 3,500 community members and almost 20,000 people on the waitlist for the product. It also plans to launch a Discord channel for its community members.

Conclusion

Thanks to Algorand and an experienced team led by former quantitative trader George Cotsikis, Venue One is a global prediction platform focused on user experience and letting users bet on sports and financial events while leveraging stablecoins.

Website: https://venue.one/

Twitter: https://twitter.com/VenueMarkets

Telegram: https://t.me/venuemarkets

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