Introduction

Welcome to the second episode of SynStation 101, a series focused on introducing SynStation! SynStation is an upcoming prediction market on Soneium, enhanced in nearly every way compared to existing platforms. Today, we’ll dive into the challenges current prediction markets are facing and how SynStation tackles them, providing a superior experience for users. Let’s begin!

The Pitfalls of Current Prediction Markets

Prediction markets have gained traction recently, but many of the existing platforms suffer from significant flaws. Here, we’ll review some of the main issues.

Limited Variety in Topics

The first and perhaps most glaring issue is the lack of topic diversity. According to ASXN, 14 out of the top 15 markets are election-related, with the only exception covering the FED’s rate decisions—still closely tied to politics. Considering prediction markets often promise the ability to “bet on anything,” the current landscape is far from ideal, with ample room to diversify into topics beyond just politics and sports.

Suboptimal Market Structure

Most prediction markets today rely almost exclusively on binary structures. Even what appear to be multiple-outcome markets are typically a series of linked binary markets. This forces inefficient executions for non-informed traders, while fragments liquidity over multiple markets and unnecessarily leak profits to arbitraguers.

Inequitable Reward Distributions

To attract liquidity providers to these less-than-ideal markets, some protocols run reward programs for market-making. However, these programs are often exploited, as providers can avoid adverse selection risk while still earning rewards (a phenomenon known as “ghost liquidity”). Consequently, these reward programs often fail to achieve their intended effect.

How SynStation Is Different

Having reviewed the shortcomings of current prediction markets, let’s look at how SynStation addresses these issues, creating a better experience for traders and liquidity providers alike.

Community-Led Market Creation

At SynStation, anyone can propose a topic for a new market by winning a Dutch auction for the right to do so. The auction renews with each new bidder, starting at twice the previous bid, with a 24-hour half-life. Proposals are thoroughly reviewed and voted on by the community. Approved proposers earn 10% of the swap fees generated by their market. If rejected, a portion of the bid is returned, but not fully, to deter spam and ensure only high-quality, well-defined proposals reach consideration.

This model allows the community to suggest topics with viral potential, encouraging diverse and high-volume markets. A single team or protocol can’t possibly know all trending topics, so this approach ensures SynStation continuously offers the most popular and varied betting opportunities.

Diverse and Efficient Market Structures

SynStation will provide diverse types of markets, such as binary, multiple outcome, and spectral markets. This enables betting on an even wider range of topics, such as the share of each party in Congress, speculations for meme tokens, tournament winners, and more. Interestingly, while liquidity providers can provide liquidity for pools of specific outcomes chosen by them (so they don’t lose money for correct guess), trading of each outcome token will benefit the liquidity of all outcome token-related pools. This will result in more efficient and profitable opportunities for each player.

Transparent and Fair Reward Distribution

We prioritize transparency and fairness as cornerstones of our reward program. Our rewards for LPs will go only to those who genuinely contribute liquidity, allowing traders to experience low slippage. Rewards are based on the swap fees generated, meaning spoofing or flickering orders won’t work—save your gas fees, anon 😈.

Conclusion

In this article, we explored the limitations of existing prediction markets and how SynStation overcomes them. Some of you might think this sounds too good to be true, but rest assured, it’s real . In future articles, we’ll cover the high-level implementation of these features and what you can expect to do at SynStation. Stay tuned!

Stake Now

Feeling inspired? Ready to become an early supporter? Head over to SynStation to stake your tokens! Earn additional yields and points on top of SynStation points and [redacted] points.