The odds are in your favor.

"The house always wins" is a saying often used to refer to the built-in advantage that casinos, bookmakers, and other centralized entities have over players. These entities are profit seekers, afterall, and operate in accordance with their own tried and tested incentive structures. With promises of quick profit while using every trick in the book to extract maximum value, they create a framework of incentives to get players in the door, and walk out with less money than when they walked in. Alongside high trading, deposit, and withdrawal fees, they predetermine odds to work in their favor. 

The key to understanding how centralized entities like bookmakers and casinos do this is understanding that they are not trying to predict what will happen – they are trying to predict what people will take a position on. By offering odds that are slightly less favorable to the player than the true odds, they’re able to ensure that it will make a profit over the long run. The "house edge" or "vig" refers to the built-in advantage that the centralized entity has over the player: it represents the percentage of each position they expect to retain based on the odds of the game. If the house edge on a particular game is 5%, the casino expects to keep 5% of every position taken on that game. Thus, they profit by paying out less than the true odds of the game would suggest. And because they can dictate odds, these entities can influence outcomes. In the worst case, the centralized entity may even manipulate the final outcome too, resulting in a loss of user funds.

The solution lies in decentralization: making prediction markets more transparent, democratic, and ultimately fair for people who participate. Built on peer-to-peer blockchain technology and powered by people, FORE Predict is a decentralized predictions platform that doesn’t determine market odds – you do. Markets on FORE Predict are created as pools (as an ERC721 NFT contract), where players take a position on one or more outcomes by adding funds to the pool. As players add funds to varying outcomes of the market, the odds continue to change based on player participation, resulting in optimal, market-derived pricing for players’ positions. By letting the market determine the appropriate odds and corresponding payouts, FORE Predict allows players to take advantage of market inefficiencies without compromising fairness or transparency.

Rather than taking a position against the house (who predetermines the odds), on FORE Predict there is no house: players take a position against other players. FORE Predict is simply open-source software built to facilitate community creation, participation, and validation of peer-to-peer markets on the blockchain. As such, FORE Predict is not a prediction market itself: the creation of individual prediction markets on FORE Predict is entirely independent from FORE.

Upon the closure of the market (at a time and date predetermined by the market creator), the final odds are determined, and the players who took the correct position on a market outcome are awarded a share of the total pool size (less 5% maintenance fees) proportional to their participation. The payout itself is trustless and transparent: automatically determined by smart-contracts that require no human intervention to fulfill the terms of the contract. Participants need not trust any centralized entity with the safety of their funds, and all transactions are recorded on the blockchain to ensure payout and fee structures are completely transparent.

As a result of this peer-to-peer structure, FORE markets are always sufficiently capitalized, enabling payouts when due. Counterparty risk is magnified for the user in centralized markets because operations are often undercapitalized relative to a worst-case scenario (where they have to make considerable payouts all at the same time). We see this happen consistently – not only with prediction markets, casinos and sports books, but also with bank runs, insurance claims following natural disasters, and more. But FORE Predict’s peer-to-peer technology removes that single point of failure (and counterparty risk) by omitting the centralized middleman: all markets and transactions are managed in a secure, immutable, and decentralized way via smart contracts.

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We have built our MVP around a parimutuel market structure (where users pool funds together and payout odds are determined by their respective share of the winning side relative to the losing side). However, we plan to expand our offering to include several market types and structures based on user demand, including (but not limited to) categorical markets, ordered markets, parlay markets, and floating point markets. Using a binary parimutuel market structure as an example, the odds and payout logic on FORE Predict is best described by the following diagram:

• Players take positions against each other in a market with two binary outcomes
• Players’ funds are held in a decentralized smart contract until market resolution
• Market odds are determined upon market closure based on market participation on either side
• Payout is determined by the player’s respective share of the winning side relative to the losing side 
• 95% of the total market is distributed to winning players 
• Payout is trustless and immediate upon resolution

On FORE Predict, we don’t determine the odds, you do. Sign up below to be notified about FORE token's listing on June 30th.

FORE Protocol, and FORE Predict, is powered by FORE token. FORE token will be available for trading on MEXC. FORE Predict's main net will be live following the completion of our security audit.