One of the great things about the Ethereum ecosystem currently is how there’s such a wealth of resources available, the result of which is the constant arrival of new projects in the space.
PlotX is among those new projects, and it comes as an entrant to the young but promising sector of decentralized prediction marketplaces. These applications allow users to permissionlessly make bets on any manner of subjects, with the prize for correct bets being — you guessed it — profit.
Thus with PlotX being the newest protocol on the block, let’s dive deeper into this novel project and what it brings to the table.
What Is PlotX?
So we already know PlotX is a decentralized predictions protocol. Yet as opposed to some other projects in the predictions space, PlotX makes use of an automated market maker (AMM) model, a la the popular trading protocol Uniswap, as opposed to an order book system.
This means that for every prediction marketplace that’s opened atop PlotX, a liquidity pool of tokens is created to underpin trading in that market.
Zooming in, PlotX is non-custodial, meaning you keep complete control of your funds while you use the protocol. Out of the gate, the project lets users create 1-hour, 1-day, or 1-month markets based on crypto pairs, e.g. will the BTC-USDT ratio be higher in one month’s time. Reward payouts are instantaneous, so there’s no fiddling around with any claims process through a third-party.
While the project is still young and in its alpha phase, it exists on Ethereum’s Kovan testnet. This is to ensure that everything checks out with PlotX’s protocol before it goes live and handles serious capital. But dozens of users have already flocked to open up their own test markets, so things have been moving according to plan so far.
If you’re interested in picking up some testnet ETH to give PlotX an early spin, you can request some KETH from the Kovan Faucet.
Marketplace dispute resolutions, wherein users disagree on a given market’s outcome, are a a big quagmire for all decentralized prediction projects. PlotX faces this issue by focusing on non-subjective markets that can be mathematically determined. The project’s website notes:
“[T]he idea with PlotX was to stay away from markets that require subjective opinions at the time of market settlement, reducing the chances of dispute … PlotX, at the moment, provides the ability to create only those markets for which there can be a mathematical settlement. The rare chance of a dispute is when an Oracle fails to post the price of crypto assets at the time of market settlement.”
Specifically, PlotX uses Chainlink and Provable oracles for its price settlements. And since on-chain processes like this can be susceptible to manipulation, PlotX’s community has proposed to “feed an average of multiple [price] sources via Chainlink.”
In the event that a rare resolution is necessary, PlotX uses an on-chain governance system where a Dispute Resolution Panel adjudicates. Members of the panel will be voted on by the project’s stakeholders.
Another key aspect of the PlotX protocol is how it natively powers leveraged prediction positions. This means users can approach their trades with varying degrees of risk.
Specifically, PlotX offers 1x, 2x, 3x, 4x, and 5x leverage to traders. The default is the 1x position, which to open entails users putting up 20% of their staked assets. In extension, a 5x position means a trader would have to put up 100% of their staked assets in order to make a bet. 5x leverage brings 5x the rewards if your prediction ends up panning out, but you’d also lose everything if your bet was wrong.
PlotX doesn’t just handle disputes with on-chain governance. The entire project is a decentralized, community-run project that is directed on-chain by its users.
To start, though, PlotX’s community will be stewarded by a small executive branch whose members are voted in by the community. The project’s site explains:
“[A]n Advisory Board will be set-up to facilitate decisions requiring interaction with the non-blockchain world as well as govern some of the more extreme scenarios … the Advisory Board has no custodial rights over the fund pool … with each Board member liable to be replaced at any time via the member voting process. On that path, at the time of launch on the mainnet, the community shall choose 5 advisory board members.”
Moreover, the project’s builders intend to phase out the Advisory Board over time, so that PlotX can steadily progress toward full decentralization.
PlotX’s native token is PLOT, which has multiple value propositions.
First off, PlotX marketplaces require a fee either in ETH or PLOT to run. 50% of accrued ETH fees are used to buy back PLOT from decentralized exchanges, while the other 50% of the accrued ETH covers gas fees. Any PLOT fees collected are burned so as to generate deflationary momentum on the token.
Next, PlotX makes use of a Referral Bonus program, wherein traders earn $bPLOT (which are 1:1 with PLOT) rewards for referring others to the protocol. These $bPLOT can be used to make more bets on PlotX, which paves the way to earning more PLOT rewards.
Thirdly, PlotX is running a Community Mining system for PLOT. This means PLOT airdrops will be reserved for other projects that, if voted in, receive $bPLOT rewards, allowing new influxes of users to participate in PlotX markets and earn PLOT rewards.
Moreover, a “Stake and Play” campaign is also at hand. This means plays can stake their PLOT tokens in order to become eligible to earn even more PLOT rewards than they normally would be able to.
Lastly, PlotX is offering Governance Mining and Liquidity Mining programs, which will reward governance participants and PlotX liquidity providers with PLOT tokens.
Scaling for the Future with Matic Network
Demand for Ethereum blockspace has surged this year, and this has rocketed the cost of Ethereum transactions upward this year in kind.
Accordingly, Ethereum dApps from across the ecosystem are feeling the pressure to embrace Layer-2 scaling solutions that, in being built atop Ethereum, can drastically speed up and cheapen transactions. The good news is that a variety of L2 solutions are really starting to come into their own around Ethereum right now, which means PlotX has scaling options.
Moving forward, the project’s team has identified the L2 project Matic Network as its prospective scaling technology of choice. In an announcement last week, PlotX said:
“L2 solutions will be important to make PlotX super fun and simple. We believe this collaboration with MATIC could provide us with the right guidance to achieve that with their platform and expertise.”
PlotX is a promising project that is arriving at a ripe time in the DeFi ecosystem.
Sure, there are already some other decentralized prediction marketplaces around the space, like Augur and Omen. But things are still so early that’s there undoubtedly plenty of room for another AMM-centric project to enter into the limelight.
In a matter of years, marketplaces like PlotX may become much more commonplace, but that point will never arrive if not for the pioneering work that’s being done in the field now. In the meantime, the project is yet another one to keep on your Ethereum radar going forward.