Today we’re very excited to launch market creation on Veil. Now you can create your own prediction market and get paid when others trade in it.
When we launched Veil, we decided to feature only a few curated markets. Our goal was to test the product we’d built for trading in prediction markets before adding many more markets. Two months later, we’re ready to open up Veil and let you create the markets.
Want to jump right in? Create your own market now. Otherwise, read on to learn about draft markets, activating markets, and reporting.
Step 1. 🤔 Decide what you want to bet on
The first step is to decide what market you want to create. We’ve had people ask to bet on everything from e-sports competitions to crypto network launches to whether Kanye West will wear a MAGA hat this month. You can create markets with wide appeal—on topics like politics, entertainment, or sports. Or you can create very specific ones—like will CDP 5199 be liquidated or will United flight UA 875 be delayed?
You also have to choose whether you want to create a binary market or a scalar market. Binary markets have two outcomes — yes and no. Here are some examples of binary markets:
- Will ‘Roma’ win Best Picture at the 91st Academy Awards?
- Will the New England Patriots win Super Bowl LIII?
- Will Veil launch its market creation feature by 12am PDT March 14, 2019?
Scalar markets let you bet on a value in a range. Here are some examples:
- How much ETH will be locked in Uniswap on March 16, 2019? (Between 10k ETH and 30k ETH)
- What will be the price of Maker (MKR) in USD at 5pm PDT on Friday, March 15, 2019? (Between $523.70 and $785.54)
- How many goals with Cristiano Ronaldo score during the 2019 UEFA Champions League? (Between 0 and 12)
Coming up with new prediction markets can be a lot of fun. And you’re limited only by your own creativity.
Step 2. 📝 Create a draft market
Let’s set up our first market for demonstration purposes. We’ll create an example market: Will 2020 presidential candidate Andrew Yang have 250,000 or more Twitter followers on April 1, 2019?
First select the kind of market you want (in this case it’s a binary market), then add the question, expiration date and time, and resolution rules. You can also have some fun by changing your market’s theme color 💅.
Make sure your resolution rules are clear and comprehensive. Another user has to be able to know exactly what she is betting on based only on the details you provide.
You’ll notice there are two ways for you to earn money—settlement fees and trading fees. Settlement fees are charged when users redeem their positions, and trading fees are charged per trade in your market. Read our FAQs to learn more about your earnings as a market creator.
When you move on to save your market, you’ll be asked to confirm the market is consistent with the Veil rules. We recommend reviewing Rule 3.7 in our rulebook. Basically, you aren’t allowed to create markets that are based on a security or liquidity event of a US company or markets that relate to assassinations or terrorism. Please use your common sense. Veil will be automatically reviewing markets and delisting ones that break our rules.
Step 3. 🙋♀️ Gather interest for your market
At this point, your market is created and discoverable by anyone on Veil, but it’s still considered a draft. A draft market in Veil is one that hasn’t been persisted to Augur yet or been activated. Once a market is activated, it can’t be changed. But you can update a draft market as much as you want. Maybe you realize your resolution rules are incomplete or you’d just prefer to have a purple background instead of orange.
The cool thing about draft markets is that they can still accept orders from the community even though they’re not active yet. It costs money to activate markets and persist them to Augur, but with draft markets you can ensure that you’re only paying to create markets that people actually want to participate in.
Step 4. 🔥 Activate your market
Once you’ve shared your draft market and are happy with the community buy-in, it’s time to activate your market. All markets on Veil are represented as Augur markets under the hood. Augur is a crucial piece of infrastructure because it can help resolve and secure any arbitrary prediction market. But that work has to be paid for, so in order to activate your market (and get paid yourself) you have to make two deposits—one in ETH and one in REP. You’ll get these deposits back once the market ultimately resolves, but the idea is to limit spam in the Augur network. When you activate your market, all the trades that would have happened when it was a draft will be executed.
So what happens if you don’t have enough REP to pay the no-show deposit? We linked up Veil to use 🦄 Uniswap’s liquidity pool. So you can swap ETH for REP directly from the Veil app. Here’s an example:
Step 5. 🔮 Report what happened
When your market finally expires, you’ll be responsible for submitting the initial report. That report is what actually happened (i.e. whether Andrew Yang actually has 250k or more Twitter followers or whether the Patriots did win the Super Bowl), and it helps determine how much users should be paid for their positions.
While your report is important, relying just on you would give you a lot of power over users’ earnings. So before users get paid out, the Augur ecosystem is given an opportunity to dispute the outcome you reported. Ideally, very few markets get disputed and disputes exist more as a threat to ensure you report correctly.
For markets with clear resolution, Veil may offer Instant Settlement to users. This means that users will be able to redeem their positions based your initial report before the Augur market has been finalized. Veil will offer Instant Settlement on a case-by-case basis and only in situations where it is very likely Augur will resolve the market consistent with your report.
That’s it! You can now create prediction markets on Veil. Start by creating a draft market for free, then see if the community is interested in betting in it. If they are, activate it and get paid when people participate!
We can’t wait to see what you all create. We’ve designed the product to be broad and flexible, and we hope you make the most of it! Our team will be actively monitoring markets, reviewing them for completeness, and helping to share them in an effort to increase activity. If you have any questions, comments, or feedback, please reach out to us on Twitter or in our Discord.