if you're building in prediction markets, here are 5 things you need to get right:
1. solve an actual execution or pricing problem-
the venues already exist. kalshi, polymarket, limitless, pred….
and a dozen smaller books already cover the popular events and a decent slice of the long tail
what's missing is the layer underneath:
liquidity that's fragmented across books pricing the same event as if they were different instruments.
build the layer that tackles this, a good example is
@river_markets,
@magicmarkets and
@uselotusxyz
if your product is another frontend for trading markets…
be specific about which inefficiency in execution, pricing, discovery or resolution you're actually fixing before you even write a deck
the idea really to make sure, you are not competing in a saturated niche
—-
2. have a real answer for why this needs to be onchain or offchain
the truth is a prediction market app doesn't need a blockchain to let people bet on an election
what crypto rails can actually give you is permissionless listing, verifiable and trustless settlement, a more global distribution and composability with existing defi infras.
and if you are going through the offchain path to target a more defined geography or market, you need to have good reasons for it also
for example: are you an onchain sport exchange like
@predofficial? or just an sportsbook
this will also help you map your core competitors
—-
3. resolution design is the most important part-
resolution and settlement is the actual product. who writes the rules, how ambiguous wording gets handled, what the challenge window looks like, who eats the loss when a market resolves ugly
for example sports has clean data feeds and results within minutes.
politics has ambiguous wording and adverse selection that shows up weeks later
a poor resolution event can send your product to zero in a single week
you need to factor all these in.
—-
4. liquidity bootstrapping is the real distribution problem here-
the usual crypto playbook (grow on x, run points, do an airdrop) gets you traders, not depth
what a market needs on day one is market makers willing to post two-sided quotes on thin books, with real answers on inventory limits, hedging,
and what happens when a news shock moves the book faster than anyone can react. a book with no depth doesn't get traded
@Outcomexyz is a good example of projects worth studying here, study how they designed their liquidity rewards program from day one
—-
5. token and fee design should compound the market, not just pay people to show up
builder codes, lp incentives, and rebates work when they make the next market easier to list and the next quote tighter
an emissions schedule that's only rewarding volume doesn't survive being turned off
most importantly, ask whether your incentive structure still holds once the rewards stop
I personally don’t see any reason why a pm should tokenize but that is just my opinion
there is a still a lot things worth checking but i believe getting these 5 right will give your product a solid foundation