Deploying a Prediction Market I Shiv Bhonde

Sun, Nov 2, 2025, 12:00 AM

Shiv Bhonde introduces the fundamentals of prediction markets and demonstrates how to build a binary prediction market using the Speedrun Ethereum challenge. He begins by explaining the real-world significance of platforms like Polymarket, where traders bet on outcomes such as elections or sports events. Unlike traditional betting systems, onchain prediction markets let users trade outcome tokens ("Yes" and "No") freely until the event concludes, providing decentralized transparency and market-driven probabilities. Shiv highlights that prices of these tokens represent collective belief — a “yes” token rising in value signals increasing probability of that outcome. He outlines three main components of any prediction market: ERC-20 tokens representing outcomes, liquidity mechanisms (AMMs or order books), and oracles that settle results once events conclude. He then walks through the Speedrun Ethereum Prediction Market Challenge, showing how to scaffold the app using Scaffold-ETH and interact with contracts through a local frontend. The demo simulates a race between cars to visualize how trades move probabilities in real-time. Liquidity providers bootstrap the market by locking tokens to prevent price volatility from early trades, while users buy and sell “Yes” or “No” shares as the race progresses. Once the oracle (here, the market creator) reports the outcome, winners redeem tokens for ETH, and losers’ shares become worthless. Shiv concludes by discussing design variations like locking ratios, LP rewards, fee structures, and oracle decentralization, encouraging experimentation with AMM formulas and deadlines to make the system more robust. 00:00 – Introduction to prediction markets 00:32 – Polymarket and real-world examples 01:27 – Trading, composability, and decentralization 01:58 – Collective forecasting and accuracy 02:56 – Binary prediction markets explained 04:05 – Token-based outcomes and probability pricing 05:04 – Components: tokens, liquidity, and oracles 06:07 – Setting up the Speedrun Ethereum challenge 06:44 – Scaffold-ETH setup and commands 07:32 – Contracts overview: market and token 08:39 – Role of liquidity providers 09:20 – Bootstrapping with initial parameters 10:21 – Locking tokens to prevent price swings 11:52 – Example of market imbalance 12:23 – Setting initial probabilities 13:52 – Demo: car race market 14:59 – Buying and selling Yes/No tokens 16:12 – Oracle reporting and settlement 17:39 – Redeeming winnings and losses 18:50 – Liquidity provider mechanics and risks 19:56 – LP fees and design variations 20:29 – Oracle decentralization and future improvements _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🇮🇳 *ETHGlobal New Delhi* This workshop is specifically for ETHGlobal New Delhi, a 3-day hackathon held September 19-21 at the India International Convention & Expo Centre, bringing together the most skilled web3 developers, designers and product builders from all around the globe for a weekend-long adventure to advance the Ethereum ecosystem! Watch the full ETHGlobal New Delhi 2025 playlist here: https://www.youtube.com/playlist?list=PLXzKMXK2aHh7zCFW3hBqatZ18rQaYeEJL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ✅ *Follow BuidlGuidl* X: https://x.com/buidlguidl ✅ *Follow ETHGlobal* X: https://x.com/ETHGlobal​ Warpcast: https://warpcast.com/ethglobal Website: https://ethglobal.com YouTube: https://www.youtube.com/c/ETHGlobal _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _Are you interested in Ethereum development and entrepreneurship?_ 👉 Sign up for the next ETHGlobal event: https://ethglobal.com/events 🎁 Get exclusive access and perks with ETHGlobal Plus! https://ethglobal.com/plus 📣 Want us to throw an event in your city? Tell us where! https://ethglobal.com/city