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Foreon Network Litepaper
Foreon Network: Decentralized Prediction Protocol On Cardano
20th July 2023
*This is a working document and not the final version of the Foreon Network whitepaper*
- 2.Features & Advantages of Foreon Network
- 3.Technical Approach to Foreon Network Development
- 4.Foreon Smart Contracts
- 5.Foreon Network Basic Interaction Flow
- 6.Foreon Network Token ($FRN)
- 7.$FRN Tokenomics
- 8.$FRN Token Utility
- 1.To provide a decentralized platform for users to create and participate in prediction markets, eliminating the need for intermediaries or central authorities, while ensuring a user-friendly experience through an intuitive interface and seamless onboarding process.
- 2.To harness the security and transparency of blockchain technology, specifically the Cardano network, for ensuring fairness and accuracy of market outcomes, while empowering users with full control over their funds and prediction assets.
- 3.To offer a stable and reliable currency for trading on the platform, utilizing the DJED stablecoin, which is pegged to the US dollar and overcollateralized with ADA, thereby mitigating the risks associated with cryptocurrency volatility and providing users with a secure trading environment.
- 4.To incentivize user participation and engagement through a well-designed system of rewards, token emissions, and community-driven governance, allowing early adopters and active community members to contribute to the platform's growth and share in its success.
- 5.To enable efficient and low-cost trading on the network by leveraging Cardano's high-speed and low-fee blockchain technology, while continuously exploring ways to optimize the platform's performance, reduce latency, and improve overall user experience.
- 6.To foster a strong and supportive community by prioritizing transparent communication, regular updates, and active engagement with users, enabling the platform to adapt and evolve according to the needs and preferences of its user base.
- 1.Decentralization: The Foreon Network is built upon the foundation of decentralization, operating in a peer-to-peer manner without the need for intermediaries or centralized authorities. Unlike traditional prediction markets that are managed by a central authority, the decentralized nature of Foreon allows users to have greater control over their assets and participate in markets without relying on trust in a central entity. Decentralization also promotes transparency, as all transactions are recorded on the blockchain and accessible to the public.By eliminating intermediaries, decentralized prediction markets like Foreon can offer greater efficiency and lower costs, opening doors to increased accessibility for users, particularly in underserved markets or regions.
- 2.Transparency: The transparency feature of Foreon Network is made possible by the underlying blockchain technology which records all transactions and bets on the network in an immutable and transparent way. The records are open and accessible to anyone, thereby providing a high level of transparency and trust in the prediction market system. As a result, the trust issue that is prevalent in traditional prediction markets, where there is a lack of transparency, is eliminated in Foreon Network. Users can have confidence in the accuracy and fairness of the market outcomes as they can verify the transactions and bets placed on the network.
- 3.Security: Foreon Network leverages the security features of Cardano blockchain to provide a secure and reliable platform for prediction markets. Cardano's blockchain uses a proof-of-stake consensus algorithm, which is a secure and energy-efficient way of validating transactions and maintaining the blockchain. This ensures that the network is resistant to attacks and fraud attempts. Foreon Network also employs smart contracts, which are self-executing programs that enforce the rules of the prediction market. Smart contracts run on the blockchain and are immutable, meaning that they cannot be altered once they are deployed. This ensures that the prediction market rules are followed without any manipulation or intervention by central authorities.
- 4.Efficiency: Efficiency is a key advantage of the Foreon Network due to the use of blockchain technology. The decentralized nature of the platform eliminates the need for intermediaries and centralized authorities, reducing the time and cost associated with traditional prediction markets. Transactions are processed quickly and securely, with the use of smart contracts ensuring that rules are enforced automatically. The Cardano blockchain, on which Foreon Network is built, is known for its high level of efficiency and scalability. The platform can handle a large volume of transactions without compromising speed or security. This is achieved through the use of a Proof of Stake consensus mechanism, which allows for faster and more energy-efficient transaction processing compared to other blockchain protocols. Moreover, the use of smart contracts on the platform ensures the automation of processes, reducing the need for manual intervention and minimizing the potential for errors. This not only increases efficiency but also ensures the integrity and accuracy of the prediction market system.
- 5.Access: Foreon Network aims to provide access to anyone, regardless of their location or financial status. The platform is designed to be accessible to everyone, including individuals who do not have access to traditional financial systems. By leveraging the power of blockchain technology, Foreon Network eliminates the need for intermediaries or centralized authorities, making it easy for anyone to participate in prediction markets. Furthermore, the platform's user-friendly interface makes it easy for users to navigate and participate in prediction markets. The platform provides a seamless user experience, from the creation of prediction markets to the settlement of bets, and the distribution of rewards. The user interface is intuitive and straightforward, making it easy for users to get started with minimal guidance.
- 1.Define the requirements and functionalities of the product, including the prediction market, decentralized oracle, and stablecoin to be used.
- 2.Choose Cardano, a blockchain platform with the necessary features and capabilities to support the product's requirements.
- 3.Develop smart contracts for the prediction market and decentralized oracle using Plutus programming language, a functional programming language used for smart contract development on Cardano.
- 4.Utilize the Cardano network's stablecoin, Djed, which is overcollateralized and pegged to the US dollar.
- 5.Implement and test the product on Cardano's testnet, before launching on the mainnet to ensure functionality and security.
- 6.Utilize off-chain solutions like Chainlink oracles for reliable market data and external information.
- 7.Develop a user-friendly interface for the product, including both front-end and back-end development using popular web development frameworks such as React or Angular.
- 8.Launch the product and continue to iterate and improve based on user feedback and market trends, using agile development methodologies.
- 9.Monitor and maintain the security and stability of the product through regular audits and updates, including security audits by third-party auditors to ensure the security of the smart contracts and the overall platform.
Foreon Network is built on the Cardano blockchain, which operates using the extended Unspent Transaction Output (eUTXO) model. This means that the total amount of cryptocurrency owned by a user is calculated as the sum of all unspent transaction outputs that point to the user's wallet address.
In addition, Cardano supports Smart Contracts written in Plutus, which is a functional programming language based on Haskell.
By utilizing Cardano's eUTXO model and Plutus Smart Contracts, Foreon Network is able to offer a secure and efficient prediction market platform.
- A market creation contract that allows users to create and manage their own prediction markets on the network.
- A prediction market contract that holds the funds bet by users on the outcome of events and distributes them to the winning bets according to a predetermined formula.
- An oracle contract from decentralized oracles like Chainlink that retrieves external data on the outcome of events and reports it to the prediction market.
- A dispute resolution contract that allows users to challenge the outcome of events and initiate a dispute resolution process.
The contracts will allow users to open up and bet on markets on Foreon network
Here is a brief explanation of how the contract works:
The smart contract variables for Foreon Network would depend on the specific implementation, some include:
- The createMarket function creates a new prediction market on the network by accepting the market details (such as the market title, description, and end time) as input parameters.
- The placeBet function allows users to place bets on a particular outcome of a market. The user specifies the market ID, the outcome ID, and the amount of their bet.
- The resolveMarket function is called after the market has ended, and it determines the winning outcome of the market based on the bets placed by the users. The contract then distributes the winnings to the users who placed bets on the winning outcome.
- The contract maintains a list of all the markets that have been created on the network, and it allows users to retrieve information about specific markets by ID.
- Market creator address: the address of the user who created the prediction market
- Market ID: a unique identifier for the market
- Market title/description: information about the event being predicted and the possible outcomes
- Outcome shares: the number of shares available for each possible outcome
- Current share prices: the current price of each share
- Market start and end times: the start and end times for accepting bets
- Outcome results: the actual outcome of the event being predicted
- Total pot: the sum of all bets placed on the market
- Foreon fee percentage: the percentage of the pot that is taken as a fee by Foreon Network
- Djed stablecoin address: the address of the stablecoin used for betting on the market
- User balances: the current balance of Djed stablecoin for each user participating in the market
- Betting history: a record of all bets placed on the market by each user
- 1.A user opens a prediction market on Foreon Network, defining the event and its possible outcomes.
- 2.Other users can then participate in the market by purchasing shares in the possible outcomes using Djed stablecoin.
- 3.Once the event occurs, the outcome is determined and the pot of funds is distributed among the users who correctly predicted the outcome, proportionate to the number of shares they purchased.
- 4.Foreon Network takes a 2.5% fee of the total pot as commission for facilitating the market.
- 5.Users can withdraw their winnings or remaining shares from the market at any time, subject to the market's rules and conditions.
- 6.The blockchain records all transactions and bets placed, ensuring transparency and security in the prediction market system.
- 7.Foreon Network periodically audits the platform to ensure security, stability, and fair play.
Foreon fee = 0.025 x Pot size
Foreon Network's tokenomics and emissions schedules are strategically crafted to enhance utility and total value locked (TVL). We prioritize transparency and community involvement by keeping them updated with the project's progress and success. Major decisions are subject to community voting using the governance token, and the community can share in the platform's success through token emissions, revenue sharing, and other methods.
The following outlines how our tokenomics will achieve these objectives while also rewarding the community.
Foreon Network Tokenomics
The FRN token will have several utilities within the Foreon Network ecosystem, including:
- 1.DAO Governance: FRN token holders will be able to vote on key decisions related to the development and management of the network.
- 2.Rewards: Users who hold and stake FRN tokens will be eligible for rewards in the form of transaction fees, token emissions, and other incentives.
- 3.Buy Backs: A portion of the fees generated from Foreon Protocol will be used to buy back and burn FRN tokens, reducing the supply and increasing the demand and giving positive signal to the market that the team is committed to the success of the project and is willing to invest in its future.
- 4.Collateral: In the future, FRN tokens will be used as collateral for creating and participating in prediction markets on the platform.