Allow limited Unwind of Prediction

I’ve found it challenging trying to determine the amount I should commit to a prediction when there is little participation or low value participation at the time of entry.

Presumably the market should encourage one to risk more capital if they have greater certainty of a particular outcome. However if there is low value participation, it takes a ‘first mover’ to step in with a sizeable commitment to encourage more capital to enter a particular prediction market in order to create risk/reward assessment.

I would like to suggest that a special ‘sentinel’ or ‘whale’ status be given to one market participant in each prediction market whereby the whale has an option to unwind their prediction amount only to match the next highest single prediction amount in that particular market (The Sentinel status is awarded to the highest single prediction amount committed). The Sentinel status should be awarded fairly early on (ie. Once 30% of live duration has passed) and unwind (if desired ) must be executed leaving some time to spare in the live duration, perhaps once 75% of the live duration has passed.

This type of mechanism could encourage more capital commitment and participation in any given market.

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I personally don’t think this is necessary. Once we implement the new market creation rewards mechanism the incentive for creating and predicting on a market will already be significant. People also already have the benefit of lower priced positions early on in the life of a market, so there is already an incentive to place your predictions early.

I’m all for encouraging market participation, but I’d don’t think this is the way to do it.

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This is a very interesting idea indeed. Although, I personally feel such a measure is not an immediate need at the moment.

  1. Once the revamped Market Creation Reward program kicks in, the person who creates the markets will be able benefit from the transactions in the market itself. Ideally the person creating the markets should be the first to predict as well.

  2. As Kwoz correctly pointed in the reply above, the person coming in early is already incentivised via lower priced options.

  3. I also feel, an option to unwind is unfair to subsequent participants as the options price they come in at already accounts for prior participation. Plus, the total amount staked and the prospective reward they would have seen would also become misleading.

I also feel, like Kwoz that encouraging participation is key but this might not be the best way. And on a much larger note, once the platform matures and there is more stable participation in every market, the risk/uncertainty for the early predictors will automatically reduce.

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Hey @JuiceBoxHero this is a real interesting idea - but I would wait out on how the Market Creation Incentive realignment plays out.