The ongoing US Presidential election is dominating global news today and pushing crypto Twitter in a frenzy as they await the results. Unbeknown to many, Ethereum is playing an important role in the proceedings.
From prediction markets to smart contract and oracle-based Presidential race calls, Ethereum is intertwined with the 2020 US election.
Prediction markets reflect the likelihood of an outcome in binary events based on the crowd’s economic bets. ConsenSys’ James Beck has taken a look at the accuracy of Ethereum prediction markets to see if it can get everything right on the day.
Ethereum Prediction Markets
In the latest Defiant newsletter, industry expert Camila Russo features analysis from James Beck, the ETH 2.0 marketing manager at ConsenSys. Beck uses an example of predicting the outcome of something by breaking each ‘guess’ down to two components — information and error. Ideally, subtracting all error leaves only information.
Beck tested these new prediction markets which involve placing a bet in DAI or USDC to provide liquidity and net a profit for predicting the correct winner. Liquidity on each market ranged between $300k and $400k at the time of press, which is a testament to how much these platforms have grown in popularity. The research concluded;
“Ethereum-based prediction markets can increasingly represent a simple and quick means to transform opinions into a single collective judgment, and may just improve the way we understand outcomes.”
Ethereum co-founder Vitalik Buterin has also been dabbling with Polymarket which had a trading volume of around $5 million today.
Trying out @PolymarketHQ now. It's unique in that it lives directly on @maticnetwork, an ethereum sidechain, and its UI is optimized for attracting users from outside crypto: it has a "buy USDC with a credit card" interface, and it uses the https://t.co/oZaKeSWdlJ login service
— vitalik.eth (@VitalikButerin) November 4, 2020
AP Uses Ethereum For Election Calls
Even the Associated Press announced it will be using an Ethereum account to post US Presidential race calls to an Ethereum smart contract:
Tomorrow, the @AP will be using an Ethereum account to post U.S. Presidential race calls to an Ethereum smart contract.
— Hayden Adams 🦄 (@haydenzadams) November 3, 2020
The system uses software from Everipedia, a blockchain-based competitor to Wikipedia, to publish election race calls with an Ethereum public key and a Chainlink oracle.
Beyond just posting the results, the AP is using Ethereum behind the scenes in its own application programming interface (API). This means that anyone tapping into the official AP results can verify the accuracy using the blockchain data.
In addition to Ethereum, the AP is also using the EOS blockchain to verify the data.