BLOCKIUM CONVERTING LOW PROFITABLE TO HIGHER PROFITS

The Blockium platform is a decentralized system which allows events to be created by anyone, including users. A new event is created by publishing a smart contract to the blockchain. To create a smart contract, the operator determines the rules of the competition:

• Asset class, benchmark index and no of assets: which asset class whether stocks, crypto or FX, which exchange whether NASDAQ, FTSE, etc. and the no of assets within the exchange are determined.

• Oracle: Identity and characterization of the entity or process that will declare the official outcome of the event at the point of resolution.

• Participation fee: The event creator defines the fee charged from users for participating in competitions. The event creator is free to make the entry fee as high or low as they want as fees are ultimately paid to them. Part of the fee can be reserved for event syndication by other providers bringing traffic to this event. The size of this part is also defined by the game creator.

• Collateral: To protect users from fraud and make sure deliberate false reporting by an oracle cannot be profitable, operators need to provide collateral securing the event. Collateral can be put per-event, as collateral in BOK which is locked in a smart contract for 24 hours’ past event resolution by the oracle, or by linking the event to the operator’s CR collateral. Depending on the collateral type, its amount must surpass a defined proportion to the total amount of active investments in all outcomes. If a user disputes the oracle’s report on the event and wins this dispute, part of the collateral will be lost. The exact amount lost is proportional to the total investment amount on losing outcomes and divided between all users that have suffered a loss. However, all disputes are made public and we expect operators to strive to eliminate false reporting on both small and big events for risk of affecting their reputation.

• Market maker reserve: The event creator acts as a market maker for the event by providing a reserve in BOK towards bootstrapping prediction as the counterparty for the first investments. The reserve size affects the rate at which 30 the LMSR market maker adjusts the prediction ratios of the different outcomes.
This reserve is expected to return to the operator, although it may diminish or grow as a result of the actual distribution of user speculations.

Blockium refactoring
To support the blockchain competitions, the Blockium system will be refactored to use the decentralized blockchain contracts instead of using a centralized database for competitions storage and calculations. The Blockium UI will be refactored into dApps working with the blockchain instead of the servers. This will not only add trust but will also make the system infinitely scalable and provide users with great system performance while preserving and improving the Blockium UX and UI.

How are the rewards calculated?

In simulated contests involving financial assets (Stocks, FX, cryptocurrencies, other), users pick virtual assets to be a part of their portfolio. No actual assets are ever purchased or sold and are chosen from a pre-determined "group of assets" offered by the platform which is divided into categories and tied to real-time exchanges.

In each competition, participants are creating their competition portfolio. We calculate the total portfolio percentage change by summing up the price percentage change of the assets in the portfolio, where the change is calculated from the price at the start of the competition to the price at the end of the competition. All the prices are based on the real percentage changes of the asset’s prices in the relevant exchanges tracked in real-time. Then the total percentage change of each participant will be compared to those of the other participants of the competition. The winners are the participants with the highest total percentage changes on their portfolio at the end of the competition.
For each asset in the portfolio, you have the option to choose whether you believe its price will go up or down (Buy/Sell). We will calculate the percentage change of the portfolio while taking into consideration the directions you chose.
Example 1:
You have entered a 3-coins-20 minutes’ competition. You have picked TRX –buy (up), EOS - buy and XTZ – sell (down). The changes to each of your coins from the competition start to its end were:

TRX: +1%
EOS: +4.5%
XTZ: -0.5%
Your portfolio total percentage change in this competition is the sum of all coins’ percentages changes for the coins for which you chose “buy” (TRX, EOS) minus the sum of all the coins for which you chose “sell” (XTZ):
% change= (+1% + 4.5%) - (-0.5%) = +6%

This result will be compared to those of the other participants to decide if you are one of the winners of the competition. The participant's total stock group percentage change (the return) from the beginning of the contest and up to its end must be higher than the total stock group percentage of the other participants in the same contest.

Example 2:
User entered a 3-stocks-1-day competition. User picked Google – buy (up),
Facebook (FB) - buy and Microsoft – sell (down). At the end of the contest, the participant's contest ranking will be determined by the total stock returns for such a contest. If Google and FB went up and Microsoft also went up, ten percent per stock, the participant wins a percentage of the return of the entire contest stock group. The changes to each of your stocks from the competitionstart to its end are as follows:

Google: + 10%
FB: +10%
Microsoft: +10%
% change= (+10% + 10%) - (+10%) = +10%
This total percentage per participant will be compared to the other participants' total percentage within the same contest and will determine the participants' ranking to pay out the prize amount per contest. The higher the participant's total percentage the higher his/her ranking status per contest.

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