Any position that could be considered safe enough to back a market is only going to appreciate in proportion to inflation, which would just make the market zero-sum after adjusting for inflation. Something like ETH or gold wouldn’t be a good solution because it’s going to be massively distorted on questions that are correlated with the performance of that asset, plus there’s always the possibility that they just go down, which would be the opposite of what you want.
Why does it have to be “safe enough”? If all market participants agree to bet using the same asset, it can bear any degree of risk.
I think I should have said that a good prediction market allows users to choose what asset will a particular “pair” use. It will cause a liquidity split which is also a problem, but it’s also manageable and, in my opinion, it would be much closer to an imaginary perfect solution than “bet only USD”.
I am not sure I understand your second sentence, but my guess is that this problem will also go away if each market “pair” uses a single (but customizable) asset. If I got it wrong, could you please clarify?
Any position that could be considered safe enough to back a market is only going to appreciate in proportion to inflation, which would just make the market zero-sum after adjusting for inflation. Something like ETH or gold wouldn’t be a good solution because it’s going to be massively distorted on questions that are correlated with the performance of that asset, plus there’s always the possibility that they just go down, which would be the opposite of what you want.
Why does it have to be “safe enough”? If all market participants agree to bet using the same asset, it can bear any degree of risk.
I think I should have said that a good prediction market allows users to choose what asset will a particular “pair” use. It will cause a liquidity split which is also a problem, but it’s also manageable and, in my opinion, it would be much closer to an imaginary perfect solution than “bet only USD”.
I am not sure I understand your second sentence, but my guess is that this problem will also go away if each market “pair” uses a single (but customizable) asset. If I got it wrong, could you please clarify?