# Deploying a Prediction Market I Shiv Bhonde

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2025-11-09
- Duration: 20:52
- Topics: prediction market, Polymarket, binary market, ERC20 tokens, Yes/No tokens, liquidity pool, automated market maker, oracle, market settlement, probability pricing, token locking, liquidity provider, price stability, decentralized forecasting, Speedrun Ethereum, Scaffold-ETH, blockchain betting, composability, decentralized finance, AMM design, LP rewards, onchain markets
- Watch: https://streameth.org/watch/yt-wD4i2LA7Hq4
- YouTube: https://www.youtube.com/watch?v=wD4i2LA7Hq4

## Description

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