MPM
As consumers own (“mine”) Mu for their attention, data and other brand-incentivised actions, prediction markets can be a good potential redemption (and additional earning) mechanism. It brings out the latent wisdom each of us have in our interpretation of future events. By removing the need for real money, MuCo’s Prediction Markets also eliminate the need for regulation. The use of crypto tokens ensures that MuCo cannot debase or devalue the tokens, and there are rules that govern it. Google helps us search the past, Twitter the present, and Mu-powered Prediction Markets (MPM) can help us with the future.
So, how would such markets work?
Mu mined through actions could provide an entry into the world of MPM. The working of MPM would be very much like prediction markets today which are fuelled by real money. People could launch their own public or private bets and contracts, and invite others to compete against them. A contract needs two parties. MPM would, in the initial days, work as a market maker to ensure liquidity. There should be clearly defined outcomes to determine payoffs. For example, India has many important state elections coming up in 2023. As of now, the reliance for directionality of outcomes is either on journalists who have very limited information or pollsters. MPM could offer a third window to the possible electoral outcomes.
Every individual (who so desires) could be given a score on a dashboard. This “social proof” could help identify the superforecasters among the participants who could then monetise their status – much like influencers do on social media.
This Muconomy would be good for brands and consumers. It would create greater demand for Mu which would benefit the brands who are the dispensers of Mu for attention and data. It would also create value for Mu among consumers who could then monetise the Mu on other platforms. It would thus create a Mu flywheel and get a circular earn-and-redeem economy going. As brands get more attention and hopefully transactions from their existing customers, their AdWaste would be reduced even as loyalty and profitability increase.
MPM could thus take our native instincts of betting and boasting on the future and give an outlet to them.
(I want to thank my colleague, Chirag Patnaik, for some of the ideas discussed above.)
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I want to end this series with a quote to think about from Vitalik Buterin: “The idea behind futarchy was originally proposed by economist Robin Hanson as a futuristic form of government, following the slogan: vote values, but bet beliefs. Under this system, individuals would vote not on whether or not to implement particular policies, but rather on a metric to determine how well their country (or charity or company) is doing, and then prediction markets would be used to pick the policies that best optimize the metric. Given a proposal to approve or reject, two prediction markets would be created each containing one asset, one market corresponding to acceptance of the measure and one to rejection. If the proposal is accepted, then all trades on the rejection market would be reverted, but on the acceptance market after some time everyone would be paid some amount per token based on the futarchy’s chosen success metric, and vice versa if the proposal is rejected. The market is allowed to run for some time, and then at the end the policy with the higher average token price is chosen.”
