Hodl Hodl, a Latvia-based peer-to-peer exchange, plans to launch a prediction market where users can bet on cryptocurrency prices and real-world events without relying on a central exchange. The team
Hodl Hodl, a Latvia-based peer-to-peer exchange, plans to launch a prediction market where users can bet on cryptocurrency prices and real-world events without relying on a central exchange.
The team behind the platform also organizes the Baltic Honeybadger conference, a gathering for Bitcoin maximalists. Their current exchange operates as a non-custodial trading platform that mirrors LocalBitcoins in design and function. Two traders deposit bitcoin into a multi-signature address. Once the seller confirms receipt of the fiat payment, the buyer withdraws their bitcoin from escrow. Hodl Hodl holds the third key in this 2-of-3 multi-signature setup, which enables them to arbitrate disputes and ensure funds reach the correct party. The interface feels familiar to LocalBitcoins users, but the multi-signature mechanics mean Hodl Hodl never holds custody of the funds themselves.
The new prediction market would extend that model to more complex peer-to-peer instruments. Users could create derivative contracts resembling those offered by platforms like Deribit and BitMEX. Two users might wager on whether Ethereum trades above or below a specific price six months in the future. The winner takes the entire pot. The platform opens possibilities beyond cryptocurrency markets. Users could create prediction contracts on election outcomes, sporting events, and other real-world developments, building an active market with multiple participants offering different odds on various outcomes.
Two simple rules govern all contracts: no illegal conditions and no ambiguous terms. Hodl Hodl will review and approve each contract before it goes live. Most users will agree these restrictions are reasonable when building a prediction market.
Roman Snitko of Hodl Hodl explained that the predictions platform "will probably have some templates for offer descriptions first." As the platform expands and more contracts get added, standardized offerings for the most popular predictions should develop.
Hodl Hodl will host the platform at predictions.hodlhodl.com. Users with existing Hodl Hodl exchange accounts can begin making and taking predictions when the platform launches within the next couple of months.
The approach shares similarities with Augur, the Ethereum-based prediction market in operation, though it uses multi-signature escrow instead of blockchain automation. Cryptocurrency derivative platforms like Deribit and BitMEX offer complex instruments. Hodl Hodl wants to bring comparable flexibility to peer-to-peer prediction markets.
