By Nermeen Nabil TLDR
Drift Protocol has launched a prediction market called BET on the Solana blockchain.
BET allows users to bet on real-world events using over 30 cryptocurrencies as collateral.
Users can earn yield on their assets before the event’s outcome is determined.
The platform features “structured bets” allowing users to hedge their predictions.
BET is initially focused on the US elections but plans to expand into other areas like sports and crypto events.
Drift Protocol, a leading decentralized finance (DeFi) platform on the Solana blockchain, has unveiled its latest product: a prediction market called BET.
Launched on August 19, 2024, BET introduces novel features that set it apart from existing prediction markets, potentially reshaping how users engage with event-based betting in the crypto space.
BET, short for “Bullish on Everything,” allows users to purchase YES or NO shares on various real-world events, similar to established platforms like Polymarket.
However, Drift’s offering comes with several innovative twists that leverage the protocol’s existing DeFi infrastructure.
One of BET’s standout features is its support for over 30 cryptocurrencies as collateral, including popular options like USDC and SOL. This multi-token approach provides users with greater flexibility compared to platforms limited to a single stablecoin.
Users can earn yield on their staked assets while waiting for the event’s outcome, adding an extra layer of potential returns.
Cindy Leow, co-founder of Drift Protocol, drew parallels between BET’s prediction market and perpetual trading.
“Taking real events into permissionless financialization opens up the door to bet on everything from making a hyperlocalized bet with a few friends to trying to predict the outcome of a US presidential election,” Leow explained.
A unique aspect of BET is its “structured bets” feature, which allows users to hedge their predictions. For instance, a user could take a long position in the prediction market while simultaneously shorting Bitcoin, providing a sophisticated risk management tool for traders.
To incentivize adoption and engagement, BET has implemented a rewards system called FUEL. This system is designed to boost trading activity by offering tokens to users who place bets and stake DRIFT tokens.
Currently, BET’s alpha release focuses on the upcoming US presidential election, with two live contracts already accumulating over $300,000 in combined stakes. However, Drift has ambitious plans to expand into other categories, including Formula 1, crypto events, and broader cultural happenings.
The launch of BET comes at a time when decentralized prediction markets are gaining significant traction. These platforms have been praised by influential figures in the crypto space, including Ethereum co-founder Vitalik Buterin, who referred to them as “truth-seeking and democratic” technologies.
However, the growing popularity of prediction markets has also attracted regulatory scrutiny. The US Commodities Futures Trading Commission (CFTC) and some lawmakers have expressed concerns about the potential impact of these markets on public interest, calling for restrictions. This regulatory landscape presents a challenge that platforms like BET will need to navigate carefully.
Drift’s BET leverages the protocol’s existing liquidity pool of nearly $500 million, allowing for seamless integration with its other DeFi products. This integration enables features like cross-collateral trading, further distinguishing BET from standalone prediction market platforms.
The timing of BET’s launch is particularly significant given the approaching US elections. Rival platform Polymarket has already seen over $624 million in bets placed on the 2024 US presidential election, indicating substantial interest in politically-focused prediction markets.
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Nermeen Nabil Khear