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Cool, what guarantees are there that the owner of bitcoinprediction.info doesn't simply run away with the money? and doesn't pay winners?
Well our main objective is to run a profitable business. If we steal people's money, then we lose trust, and therefore lose customers. We are incentivized to provide an honest service, else we will not grow. The long-term vision is a private and anonymous polymarket but with sats and ecash, not FTX.
We also looked into how to do non-custodial prediction markets with DLCs, and we have a draft of a whitepaper detailing how to do LMSR over DLCs. The only issue is currently we need a transfer mechanism (or swap) for those DLCs, which doesn't yet exist in the spec. We could try to raise more money to hire people to do that, or we could just go with ecash (which already has a thriving community of developers).
The difficulty with DLCs also is that everything needs to be on-chain. Lightning based DLCs are a mega pain in the ass, we talked to 10101 guys about it. If everything is on-chain then anytime there are high fees, it would be more costly for people to place bets. Lightning solves this, but Lightning also precludes other technologies due to the complexity of operating a Lightning based service in the first place.
We want to guarantee payout reliability, as even typos in the lightning address can result in payment failure. That's why we want to abstract shares as ecash tokens, and enable people to save their shares as a file (or emailed to them), which can be uploaded later.
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0 sats \ 1 reply \ @anon 14 Oct
Just a suggestion for further research, this is another newer option that allows for the dlc contract to enforced on chain in an efficient manner but allows for buy-ins and pay-outs over lightning when everyone cooperates: https://github.com/conduition/dlctix
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We actually did some research into creating an LMSR prediction market with DLCs earlier this year. The main problem with it is you need to code up a transfer mechanism for DLCs, and there are much higher liquidity requirements compared to ecash.
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