Full summary
- Drift Protocol has launched a prediction market called BET on the Solana blockchain.
- BET allows users to bet on real-world events using over 30 cryptocurrencies as collateral.
- Users can earn yield on their assets before the outcome of the event is determined.
- The platform offers “structured bets” allowing users to hedge their predictions.
- BET is initially focusing on the US elections, but plans to expand to other areas like sports and crypto events.
Drift Protocol, a leading decentralized finance (DeFi) platform on the Solana blockchain, has unveiled its latest product: a prediction market called BET.
Launching on August 19, 2024, BET introduces new features that set it apart from existing prediction markets, potentially reshaping the way users engage in event-based betting in the crypto space.
BET, short for “Bullish on Everything,” allows users to buy YES or NO stocks on various real-world events, similar to established platforms like Polymarket.
However, Drift’s offering features several innovations that leverage the protocol’s existing DeFi infrastructure.
One of BET’s most notable features is its support for over 30 cryptocurrencies as collateral, including popular options like USDC and SOL. This multi-token approach gives users greater flexibility compared to platforms limited to a single stablecoin.
Users can earn yield on their staked assets while waiting for the event outcome, adding an extra layer of potential returns.
Cindy Leow, co-founder of Drift Protocol, drew parallels between BET’s prediction market and perpetual trading.
“Embedding real-world events into permissionless financialization opens the door to betting on everything from a hyperlocal bet with a few friends to trying to predict the outcome of a U.S. presidential election,” Leow explained.
One of the unique aspects of BET is its “structured betting” feature, which allows users to hedge their predictions. For example, a user can take a long position on the prediction market while simultaneously shorting Bitcoin, providing traders with a sophisticated risk management tool.
To encourage adoption and engagement, BET has implemented a rewards system called FUEL. This system is designed to drive business activity by offering tokens to users who place bets and stake DRIFT tokens.
Currently, BET’s alpha version is focused on the upcoming US presidential election, with two live contracts already racking up over $300,000 in combined stakes. However, Drift has ambitious plans to expand into other categories, including Formula 1, crypto events, and broader cultural events.
BET’s launch comes at a time when decentralized prediction markets are gaining popularity. These platforms have been praised by influential figures in the cryptocurrency industry, including Ethereum co-founder Vitalik Buterin, who called them “democratic and truth-seeking” technologies.
However, the growing popularity of prediction markets has also attracted the attention of regulatory authorities. The U.S. Commodities Futures Trading Commission (CFTC) and some lawmakers have expressed concerns about the potential impact of these markets on the public interest, calling for restrictions. This regulatory landscape presents a challenge that platforms like BET will have to navigate with caution.
Drift’s BET leverages the protocol’s existing liquidity pool of nearly $500 million, allowing for seamless integration with its other DeFi products. This integration enables features like cross-collateral trading, further distinguishing BET from standalone prediction market platforms.
BET’s launch is particularly significant in the run-up to the US election. Rival platform Polymarket has already seen over $624 million in bets placed on the 2024 US presidential election, indicating considerable interest in politically focused prediction markets.
