In a completely new concept, the Reality Cards platform allows people to not only make predictions on an outcome but own the outcome itself as an NFT, with a unique ‘time-based’ winning system.
Blending NFTs into Prediction Markets
The online prediction market is big, with Research and Markets predicting that it will grow from $72.02 billion in 2021 to $112.09 billion in 2025. The online platforms allow people to take a chance on making it big by making the right prediction. The financial winnings are lucrative, but in the end, that is all they get.
Reality Cards is a prediction platform that not only gives users the chance to win money, but with each outcome being an NFT, winners can collect the NFT as well. While today NFTs are getting more mundane, Reality Cards gives users the chance to own an NFT representing a real world event. Any future event- a sports match, the price of a cryptocurrency, whatever- can be converted into an NFT and hosted on Reality Cards.
“The NFT space is overflowing with cookie cutter projects. It's so refreshing to see a truly original idea, where NFTs are representing actual historical events.” - Marvin Kruse, Founder & CEO, Byterocket.
This unique method of prediction does not end here. In a normal prediction market, winners are those who placed their money on the right outcome. Using a modified form of the Harberger Tax Model, people set the price of the NFT by deciding the rent and obtaining the NFT. Anyone who believes in the same outcome will win can immediately take the NFT off the current owner by paying a higher rent. It doesn’t matter who owns the NFT during the game time- all that matters is how long you owned the outcome for.
How to Collect NFTs on Reality Cards
Though the process sounds complex, it is fairly simple. When a new event is created, each possible outcome has a corresponding NFT. For example, the UEFA 2021 final would have had two Cards, one for Italy and one for England. Anyone willing to partake in the game would have rented out the preferred Card by connecting their wallet to the Reality Cards platform and depositing the required USDC through the Polygon network.
Once the Card is rented out, the contract starts recording the total time the Card has been rented. Any other player can come in and by offering a higher rent will immediately become the new owner. This process can be repeated an unlimited number of times, and each time the rent increases (by at least 10%). Previous players can also take back the NFT by again renting it out (at a higher rate, of course).
When the event ends and the actual outcome is revealed, the winner is not the one who held the Card at closing. Instead the pot (made up of rent paid across all outcomes) is distributed to everyone who owned the correct outcome, in line with the percentage of total time held. For example, a user who owned the winning outcome for 10% of the total event duration will win 10% of the pot.
This explains how you win money- but what about collecting the NFT? Well, the NFT is automatically collected by whoever owned it the longest!
How do you win?
Reality Cards is more than just a prediction platform. Through the unique use of the Harberger Tax mechanic, a new price discovery mechanism is achieved, allowing content creators a whole new way to monetize their creations.
The Harberger model also incentivizes players to start early on in the bid process when the rent is low, as this maximises their potential returns. In this way, Reality Cards incentivizes bets before there is even any money to be won, an incentive that does not exist on any other prediction market.
Starting its life as a final project by Andrew Stanger, the founder of Reality Cards, in the Consensys Bootcamp, the platform will soon allow any artist to upload their own artwork and create events themselves (in return for a share of total bets), offering a whole new income source not offered by any existing NFT platforms.
