tl;dr: dApps add value to an underlying protocol by abstracting away complexity and improving user experience. The evolving Augur eco-system is a case in point.
One of the aspects of crypto that I appreciate the most is the fact that all participants, by virtue of being token holders in the network, have “Skin-in-the-Game.”
In Why Crypto is about having “Skin in the Game” and why that’s better for you, I spent some time exploring it, if you’d like to dig deeper.
The basic idea is straightforward…that you will share in the benefits of good decisions and the consequences of bad decisions…is very powerful.
When you start thinking about future events and you have to put your own money at stake, it’s a very different mentality than simply getting asked for your opinion.
I noticed this on a Facebook poll I did a few weeks ago about the field of Democratic Presidential contenders. It generated far more thoughtful responses and asking for mere opinions.
This belief/assumption that “having skin in the game” improves quality lies at the heart of why I believe that decentralized prediction markets will become critical players in generating higher quality market research.
Long-time readers of the blog will remember posts such as With 100% Certainty, I Predict there’s a future for Decentralized Prediction Markets and The Unfortunate Truth About Crypto Prediction Markets among others where we dove into this emerging capability.
But this post isn’t another one arguing that these markets will emerge and be valuable…
Prediction Markets are Real
This post is about the fact that these markets have emerged and are valuable.
Even better…and this is something we have talked about going all the way back to How You Can Understand and Profit from the Blockchain Tech Stack, is how the protocol layer is getting abstracted away.
The dApp developers will create more intuitive interfaces, removing complexity, and simplifying interactions based on the desired experience type.
But don’t take it from me. The video you should watch is here.
In it, Matt Shapiro from MultiCoin, gives a fantastic demo of the evolving ecosystem around Augur, one of the leading prediction protocols.
He succinctly summarizes and illustrates the various tools, like Guesser and Veil, which we have discussed before, that are making the underlying protocol more useful…and hence more valuable.
Imagine a crypto-CRM (such as the one we are specing out at the GenesisDAO) that allows members to commission “skin in the game” surveys of other DAO members or non-DAO members as an “on-demand” service.
Then, that information flows back into the feature roadmap, giving product teams and marketers, far better insights about what members want and what non-members want or think.
These are going to be key modules in the crypto-marketing suites of the future (and many other places as well), so I’m just excited and a bit awed to be seeing the live birth of this part of the industry.
Best of all…this type of abstraction and simplification is happening in industries and protocols all over crypto. Soon, you’ll be using these dApps and you won’t even realize there’s a blockchain in the back-end.
The Maturation of Crypto-Prediction Markets is Just the Beginning was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.