Over the last many years, the Ethereum blockchain network has been the top choice to launch crypto projects. Thanks to the Ethereum blockchain’s native ERC20 protocol that allows cryptocurrency projects to launch their native crypto tokens.
Besides, the Ethereum blockchain is also host to a number of decentralized applications (DApps) and Decentralized Finance (DeFi) tokens which recently created a huge storm in the crypto market.
Built atop the Ethereum blockchain, the Predix Network is one such prediction-based rewards system powered by its native cryptocurrency and DeFi token PRDX. As the name suggests, users on Predix Network can make future predictions for the PRDX/ETH price. Depending on the accuracy of their predictions, users are then handsomely rewarded by the platform.
For traders who are familiar with the traditional stock market, this is somewhat similar to “futures and options” where one gets to predict the future price of the stock and collect rewards on expiry.
But unlike traditional methods, the Predix Network doesn’t have a fixed time-frame of expiry. It provides a user the absolute flexibility to decide how long their prediction is. This way users can potentially multiply their bets by several-hundred percentage on Predix’s prediction market. As Ethereum is a public blockchain network and completely decentralized, everything is transparent to all users of the Predix Network.
The PRDX/ETH trading pair is available for purchase on the popular Ethereum-based decentralized exchange (DEX) Uniswap. The Uniswap decentralized protocol also facilitates automated liquidity provisions for staking.
PreDex – A Diverse Prediction Protocol Powered By Predix Network
The Predix Network has unveiled a new diverse prediction protocol called PreDex that supports all Uniswap pairs along with built-in liquidity incentives. Uniswap basically facilitates all possible ERC20 trading pairs and pools liquidity reserves through a formalized model.
Users have the freedom to select among the listed trading pairs and provide a time stand and a prediction price for any amount of PRDX tokens they want to add. During the prediction period, the PRDX tokens are held in smart contracts. As the prediction periods ends, users can either claim their profits or continue further till the time their prediction becomes more accurate.
PreDex employs a unique concept called Proof-of-Liquidity (POL) for its users to earn rewards in exchange for providing liquidity to the underlying pair. Although similar to Yield.Farming, the rewards from Proof-of-Liquidity comes from an actual product, in this case: PreDex.
The POL mechanism ensures that users offer liquidity to a listed pair on PreDex by staking the liquidity token in the PreDex pool. The pool receives all the trading fees as well as part of the losses incurred on the PreDex pair. All the users who are “farming” their liquidity tokens will receive rewards. In DeFi, the concept of “farming” tokens is similar to the concept of “mining” in traditional cryptocurrencies.
The PreDex liquidity incentive serves as a hedge for mitigating risks and partially recover losses based on their share in the pool and the prediction fee.
Effective Trading Strategies Involving Predex
- Hedging: This is one of the most popular and widely used strategies in the prediction market. This serves as an options tool to hedge against the spot exposure of the specific PRDX pairs.
The Predex system allows any eligible Uniswap pair to hedge along with different pair combinations. Suppose users want to hedge a pair of token A and token C. But there are no liquid A/C Uniswap pairs available. In such a case, one can select token B as a bridge that has liquid pairs to both A and C.
- Long Term Predictions: Predex offers a user the flexibility to make long-term predictions. The prediction protocol allows a user to make relatively low-risk long-term bullish predictions without worrying much about the short-term downsides.
Suppose one makes a prediction that Bitcoin will be $25,000 a year from now with its current price at $10,000. Now suppose BTC price is $18,000 a year later. Even though the bet is off by some 20 odd %, the high prediction age still validates the prediction and makes the user eligible for rewards. Long-term bullish predictions have a higher chance of giving a net-profit. The only downside with long-terms predictions is that users can suffer from opportunity as tokens remain locked throughout the prediction period. As explained above, the other way of earning rewards with Predex is by offering more liquidity to a certain pair and showing Proof-of-Liquidity.
The Predex launch will happen sometime during mid-October. More details can be obtained from their official whitepaper.
The PRDX Staking on Predix Network and PRDX Tokenomics
The Predix Network supports a 3-tier staking mechanism for the native PRDX tokens with a minimum staking size of 50 PRDX. The reward distribution is also categorized based on the staking size.
Using the Predix Smart Contracts, the network also offers a one-click staking solution making it easy for users. PRDX token is an ERC20 token that is both stakable and deflationary. The entire process works something like this: part of the PRDX tokens minted at the start is kept in smart contracts.
Some part of the minted tokens are pushed as circulating supply, while allowing PRDX holders to earn rewards. The platform simultaneously continues the regular token burns to decrease the supply periodically.
Below is the PRDX Tokenomics that explains the token distribution:
- Total Supply – 1,516,000
- Staking Contract – 550,000
- Prediction Market – 300,000
- Initial Distribution – 300,000
- Locked Liquidity – 171,000
- Team Tokens – 150,000
- Community Fund – 45,000
Future Plans Towards Decentralization and DEX Support
In the future, Predix Network aims to further decentralize the prediction market protocol. This protocol will allow users to create a better customized prediction market using Uniswap pairs.
Moreover, as the ecosystem expands, more liquidity pools will be added to the prediction market. The Predix Network also aims to offer multiple DEX support in the future apart from just Uniswap. The focus will be on larger exchanges like Balancer, Mooniswap, and Sushiswap.
The Predix Network presents a novel idea of prediction market systems and the first-of-the-kind in the DeFi ecosystems. The use of different liquidity pools will also help to attract more crypto enthusiasts to join the DeFi space. Predix Network offers a promising new use-case to the future of DeFi.