The weakness (or twist) on markets this implies applies to prediction markets generally. If you bet on an event that is correlated with the currency you’re betting in, the fair price can be very different from the true probability. It doesn’t have to be price based – think about betting on an election between a hard money candidate and one who will print money, or a prediction on a nuclear war.
This is an excellent point. What is the workaround here?
Most prediction markets are denominated in USD—there is no ‘loose’ currency that exists, the closest we have is RAI, which is by all means a failure.
This is an excellent point. What is the workaround here?
Most prediction markets are denominated in USD—there is no ‘loose’ currency that exists, the closest we have is RAI, which is by all means a failure.