Using betting to raise awareness for epidemic prevention? Open finance startup launches decentralized market for predicting Wuhan pneumonia.

The open finance startup Gnosis announced yesterday that it has established a decentralized prediction market platform for the COVID-19 pandemic. This platform allows people to bet on future events using USDC. The statistical data from this prediction market may also become an important reference for global epidemic prevention efforts.

Wuhan Coronavirus Prediction Market

Gnosis is an open finance startup that spun off from Ethereum developer ConsenSys in 2017. The company announced yesterday on its blog that it has launched a non-profit Corona Information Markets with an initial $50,000 fund, allowing users to make various predictions related to the Wuhan coronavirus. Marc Ziade, Head of Operations and Strategy at Gnosis, stated in the press release:

"Drawing on expert insights can provide some guidance and allow us to make wiser decisions for our families and communities. We hope the Corona Information Markets platform will reveal the truth about significant issues and rapidly disseminate useful information accessible to everyone."

Currently, the platform lists a variety of prediction targets, such as "By the end of 2020, what percentage of the global population will be infected with the Wuhan coronavirus?" and "What will be the number of confirmed cases in the United States by June 1, 2020?"

Users can use the stablecoin USDC to bet on these targets, and they can withdraw these bets before the market closes if they change their minds. The final outcome of each target will be determined by the platform's oracle, which will fetch and input the final result from trusted sources (such as the World Health Organization) at expiration.

However, to avoid compliance issues related to online gambling, the platform has implemented IP blocks for all regions in the United States.

Value of Prediction Markets

Prediction markets have gained attention in recent years, with the general belief that traditional prediction methods such as expert opinions are more reliable. However, according to a study by Professor Tetlock of the University of Pennsylvania's Wharton School in 2006, which examined 27,451 predictions made by 284 political, economic, historical, and news experts, the conclusion was that the performance of experts was no better than that of a dart-throwing chimpanzee (random computer predictions).

Prediction markets incentivize the public to make decisions they believe have the highest probability of success through betting and target prices. This method can gather a wider and more effective crowd opinion while avoiding participants' random guesses, potentially yielding more accurate results than expert opinions. Marc Ziade stated in the press release:

"Essentially, prediction markets or information markets are information aggregation tools about the 'expected outcomes of future events.' Unlike traditional opinion polls, data is collected through mechanisms that incentivize real information and suppress false information. Prediction markets aggregate various sources of information, encourage the sharing of expert knowledge, and create a data layer of probabilities for each future outcome."

Further Reading

• Vitalik's Unearthed Outrageous Bitcoin Predictions by Two Celebrities, Netizens Mock: Mind Your Own Business First!
• The World's Strongest Centralized Machine Gets Moving: Apple, Google Join Forces to Provide COVID-19 Contact Tracing Service

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