Amulet: The Crypto-Expert Litmus Test

Amulet Platform
Apr 3, 2018 · 6 min read

2018 has the potential to be a landmark year for crypto because Amulet Token and the Amulet Decentralized Reputation Ledger will bring a sorely-needed layer of quality control and noise-reduction.

The Amulet Platform core team is thrilled to share our detailed plans for clearing away what many believe to be the biggest blockers to mainstream adoption of cryptocurrency.

In our White Paper we’ve published today on the Official Amulet Website, we introduce our revolutionary new technology: the Decentralized Reputation Ledger, powered by the Amulet Token [XAM]. We go over what problems this ledger solves that legacy tech is incapable of addressing, and we pop open the hood to reveal the inner workings of what we’re building (and who the builders are).

We also lay out simple steps for how anyone — regardless of prior knowledge or skill sets — can start using the Amulet Platform to improve their crypto-investment decision making immediately.

‘Okay, So What’s Your Vision?’

  • Lenders treat credit history as a minimum requirement for consideration of a request for credit — Investors should view prediction accuracy on the Decentralized Reputation Ledger as a minimum requirement before investing their hard earned money based on a self-proclaimed expert’s advice.
  • Investors will be able to find credible experts, faster, and with greater confidence.
  • Experts will start offering better quality content because they will finally have incentives to share valuable insights instead of hoarding them.
  • Experts will be able to charge a market rate for quality advice via subscription revenue priced based on their accuracy, instead of being paid per thousand impressions.
  • Experts will be able to attract followers more easily via the Amulet platform or anywhere else by publishing their Amulet Score ‘Trust Seal’ as proof of expertise.
  • The incentives to be incendiary or ‘viral’ will finally be outweighed by the incentives for making accurate predictions.

‘Wait, so What Does Amulet DO Exactly?’

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Amulet puts reputation on the blockchain. That’s the 6-word marketing tagline answer, but let’s go a little deeper and decrypt what we’re really talking about. Anyone who has spent any amount of time observing or participating in the crypto space comes to understand (often through traumatic first-hand experience) that there is a lot of BS dressed up as cutting edge crypto innovation.

This seems like a simple enough problem to solve; investors just need to be able to vet the credibility of crypto-commentators to focus exclusively on real experts, and filter out misleading shilling and other low-quality content. But where can I go to check the reputation of a self-proclaimed expert today?

The answer is: there is no single record of reputations you can review today. We think that’s actually a good thing, there shouldn’t be a single trusted record of reputations owned by a third party. A trusted third-party can be corrupted or biased by the very people it purports to rate, so what investors really need is a decentralized, trustless record of reputation, and this is the need that the Amulet Decentralized Reputation Ledger fills.

Experts Write Predictions to the Blockchain to Create Verifiable Proof of Expertise

Amulet incentivizes experts to contribute verifiable predictions to the Decentralized Reputation Ledger, so that investors can observe how accurate these experts are over time. Investors can begin to filter out advice from experts who aren’t right often enough for their liking.

The incentive for market experts to participate is a large payout for the expert who correctly predicts an event on the Amulet marketplace that other experts missed. Experts are also able to tout their superior accuracy (verifiable by any user via the blockchain) as a reason for investors to pay a premium to subscribe directly to their feed of insights via the Amulet Marketplace.

Experts will also be able to publish their score externally as a type of ‘trust seal’ advertising their merit on any channel they see fit. They can challenge their competition to ‘put up or shut up’.

Experts will have to pay a fee in XAM to make predictions to prevent gaming. We don’t want a fraudulent actor to be able to set up 10,000 accounts, make 100,000 predictions at random, and move forward with the most accurate account — so we’ve made that economically infeasible. We’ve also used statistics to define a reward function for experts such that their expected payout from random guessing is negative, and always decreasing.

Investors will place bids with XAM to gain access to predictions experts are making, and the top bid, combined with the fees assessed to experts making predictions, is used to compensate experts each time they are right.

‘I Don’t Care if you’re Popular; I Care if you’re Right’

The status quo for how investors vet market experts usually boils down to popularity and social proof. As an investor, if I see other people putting their trust in ‘Joe Expert’, they must see something in him and maybe I should trust him too. This lines up with how these experts are compensated. Seeking Alpha is perhaps the best example of this; they pay their experts to write content per one thousand impressions. In this model, entertainment-value outweighs accuracy and actionability of advice.

Experts can also earn affiliate compensation for promoting dubious investment opportunities that have no legitimate prospect of generating revenue. This is a major problem and there is no accountability for experts that promote unsound ventures.

There is a constant proliferation of misleading information resulting from incentives to be ‘viral’ or cash in on quid quo pro arrangements. Unfortunately, the incentives to produce bad advice are not matched by incentives to give good advice: experts in exclusive possession of a useful insight have no positive economic incentive to share insight to outweigh the natural disincentive of diluting their own ability to profit.

Amulet solves both the problem of incentivizing verifiable expert predictions, and of discovering experts based on the quality of their expertise rather than that social popularity. Amulet flips the script: we compensate experts for being right and let investors see how often any given expert is ‘right’.

‘So, is that it?’

(No, We Built Machine Learning Data Tools Too!)

Amulet’s Decentralized Reputation Ledger is one of many future services leveraging the Amulet token to be built both by the core Amulet team, and (we hope) by developers leveraging the Amulet SDK.

Our platform provides a suite of market insight tools to enable market experts to formulate the best responses to any request for prediction (RFP), and to enable the receiving investors to validate the assumptions made by said market experts.

These tools include a constant stream of web-crawled sentiment content from across the top crypto forums and media outlets that is interpreted by Machine Learning algorithms and ranked by the influence of the source and the sentiment of the post. We’re also using named entity extraction and asset price forecasting based on textually-minded content from social media and crypto discussion boards. These resources will help investors and experts keep a finger on the pulse of many of the most significant drivers of price fluctuations in cryptocurrencies such as market sentiment and consumer opinion.

In addition, we are giving experts access to a custom search engine, tailored to their needs to segment the financial market by asset type, geography, and market signals such as momentum indicators and sentiment from reputable social media and finance discussion forums. This same suite of market insight tools should be available to investors, so that they can verify the assumptions which underlie predictions they’ve purchased from market experts.

‘How Can I Get Started?’

Request an exclusive invite code to start testing out our working demo, here.

Study our white paper here.

Official Amulet

Amulet puts reputation on the blockchain, exposing the…

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