Zeitgeist, a prediction market platform on the Polkadot blockchain network, agreed to use CoinDesk Indices' benchmarks as the subject of bets on the performance of two categories of cryptocurrencies.
"Utilizing CoinDesk Indices' expertise allows us to offer unparalleled prediction markets on one of the leading crypto index platforms in the world,” said Logan Saether, CEO of Zeitgeist, in a press release.
The DeFi index tracks a basket of decentralized finance tokens: the Aave protocol's eponymous token, Curve DAO's (CRV), Maker's MKR, Lido DAO's LDO, Synthetix's SNX and Uniswap's UNI. The other index measures the performance of the native currencies of multi-purpose blockchains: Avalanche's AVAX, Cardano's ADA, Cosmos' ATOM, Ethereum's ETH, Polkadot's DOT, Polygon's MATIC and Solana's SOL.
“The DeFi and Smart Contract Platform select indices ... provide users with easy access to intuitive segments and key themes of the digital asset space,” said Andy Baehr, managing director at CoinDesk Indices.
Prediction markets let pariticpants bet on the outcome of real-world events, from the highly consequential (the war in Ukraine) to the rather silly (Mark Zuckerberg's fight with Elon Musk). Proponents argue these markets are a superior alternative source of expert opinion. Unlike cable news pundits without skin in the game, in prediction markets, the thinking goes, bettors stand to lose money if their predictions turn out wrong, giving them an incentive to express what they really believe. The more liquid and lucrative prediction markets become, the bigger the attraction for real "experts" who know what they are talking about.
However, like crypto, prediction markets face an inhospitable regulatory environment in the U.S., limiting participation.
Polymarket, the leading crypto-based prediction market, is forbidden to let U.S. persons trade on its platform under a January 2022 settlement with the Commodity Futures Trading Commission (CFTC). More recently, the agency barred Kalshi, which settles bets in U.S. dollars, from letting users wager on which party would control the chambers of Congress. And PredictIt, which is also dollar-based and for years operated by the grace of a no-action letter from the CFTC, had to take the regulator to court to stay in business.
James Preston, a Zeitgeist spokesman, said the service is unavailable in the U.S.
Zeitgeist was built on Kusama, part of the Polkadot family of blockchains designed for interoperability, but now runs on Polkadot proper, Preston said. It is a small player in this niche. Cumulative volume on all Zeitgeist markets totaled $19,410 as of Wednesday evening, according to the platform's website. compared to $5 million worth of bets on Polymarket's most popular market.
UPDATE (Oct. 5, 13:24 UTC): Adds detail about unavailability in U.S.; corrects outdated information about Kusama.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.