Arbitrage your way to rewards

Arbitrage in prediction markets refers to the practice of taking advantage of differences in odds or lines between different bookmakers or betting exchanges to make a profit – regardless of the outcome of an event. It involves taking a position on all possible outcomes of an event in such a way that the winnings from one position offset the losses from the others, resulting in a net profit. 

Typically, arbitrage requires careful analysis of odds and lines, quick decision-making, and the ability to take positions quickly to take advantage of fleeting opportunities. It can be a risky strategy, as it involves taking multiple positions and relying on all of them to work out as planned. Additionally, arbitrage is not always easy to find and take advantage of because there isn't always enough liquidity in the markets for them to be accessible. When these opportunities do arise, arbitrageurs run the risk of being banned or limited by centralized entities who want to prevent users from profiting in this way.

Still, arbitrage can be a great way to manage your risk and take advantage of market inefficiencies. FORE Predict, the peer-to-peer predictions platform, is designed to help market participants gain access to more liquid, decentralized, and varied prediction, insurance, hedging and arbitrage opportunities. 

There are three primary roles on the protocol: users who create markets (creators), users who validate market outcomes (analysts), and users who take a position in any market (players). Players specifically can enjoy zero counterparty risk, market-determined odds, incredibly low fees, and transparent and trustless market resolution, as well as the ability to discover and profit from unique arbitrage opportunities.

Because users create the markets themselves, there can be more than one market on any given event or outcome on FORE Predict with varying liquidity, odds, and participation, creating opportunities for arbitrage within the platform itself. Additionally, all outcomes start out with equal probability and change depending on market participation: by embracing market inefficiencies and actually using incentives and inefficiencies, we let the market determine the correct odds and corresponding payouts. This creates an arbitrage opportunity that will attract arbitrageurs from other prediction markets, who will clearly see that real-world probabilities are not initially reflected in the market structure. Over time, this opportunity will be bid away as additional participants race in to take advantage of the arbitrage. 

On FORE’s people-powered protocol, everyone wins. The strategic use of arbitrage opportunities creates a unique incentive structure that will uniquely benefit participants themselves as opposed to the house, because there is no house. In traditional prediction markets, market inefficiencies benefit the centralized entity. On FORE Protocol’s decentralized peer-to-peer platform, they benefit the user.

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