Hakka Intelligence

A Prediction Market Born for the HAKKA Community

Hakka Intelligence - Handbook -

What is the Prediction Market?

A prediction market is a contract that allows participants to price future events. The price in the prediction market reflects the speculative risk of certain future events occurring. The profit depends on the accuracy of the prediction. Therefore, the price that appears in the prediction market usually reflects market information, making price discovery more efficient.

A prediction market is usually applied to economy indexes, results of sports games, and elections. The “Trump Contract” on FTX exchange is a good example of binary option, in which the price of call option represents the possibility of Trump’s winning; the price of put option, on the other hand, represents the possibility of Trump’s losing.

Hakka Intelligence is a prediction market platform with different mechanisms from general options. There will be no call and put options in this platform but requires the submission of predictions. The payoff is based on the accuracy of the prediction.

Introducing Hakka Intelligence

Hakka Intelligence is a price prediction platform. The initiator will provide a combination of assets with the same initial position values. Participants must predict the position change of each asset after a period of time to win the prize.

For example, today we have a combination of 50% BTC / 50% ETH:

What we have to predict is how the ratio of the assets may change in a month.

Participants will submit their prediction of the final result, for example:

Let us assume BTC will rise 8% while ETH goes up by 32 % after a month.

In this case, my predicted ratio would be 45% BTC / 55% ETH (See left figure).

But if 1 month later, the value of BTC goes down by 10% and ETH drops by 40%, the proportion of the assets would be 60% BTC / 40% ETH (See right figure).

The example illustrates that Hakka Intelligence is not simply about price predicting, but also discovering the relative rate of change of each asset.

Scores and Reward

Some mathematical approaches will be used to measure the accuracy of prediction.

First, we represent Submission and Actual Result as vectors:

If we visualize the result, it would be:

The score is determined by cos(θ). The closer the two vectors are, the higher the score you will get. The final score will be on a 0–1 point scale, where 0 is the lowest and 1 being the highest score.

*The example above is a scenario of two cryptocurrencies (BTC and ETH), however, Hakka Intelligence supports multiple currencies.

Actual Practice

It might be hard for the participants to calculate the relative ratio of each coin. Therefore, we provide a friendly interface that allows the participants to simply input the “Forecasted price change of each coin”, and the system would automatically calculate the final score.

Interface Walkthrough:

Enter 0.8 if anticipating BTC would drop 20%; Enter 1.2 if anticipating ETH would rise 20%.The anticipation of 5 coins.

The answer will be disclosed in 1 month:

The left side is your prediction; the Right side is the actual change.

The system will transform the above data into the form of vectors:

Scores can be calculated via the formula:

Because the price of coins cannot be negative, the range of θ is always between 0 to π/2, and the score is between 0–1.

*Vector normalization will be done by the frontend. What’s recorded in the smart contracts will be a unit vector. We yield score through the inner product.

*Chainlink oracle will be used as our price feed.

TL;DR

What you need to do is input the anticipated price change, and the ratio of assets will be calculated automatically. The final score will be calculated by the prediction accuracy. The more accurate the prediction, the higher the score.

Will I Get a Reward for my Prediction?

Yes. The more accurate the prediction is, the more reward you will get.

Everyone should put a certain amount of $Hakka as the “stake”. If the final score is above average, there will be some profit. On the other hand, if the score is below average, there will be a certain degree of loss.

Hakka Intelligence is a zero-sum game without external incentivization. However, it can be a positive-sum game if the initiator puts some “bonus” into the pool, which makes the game a lot more attractive.

The reward will be calculated through score, staked amount, and bonus as below:

Because of the bonus, Hakka Intelligence will be a positive-sum game for all participants. The more accurate the prediction is, the more reward you will get.

Timeline

The operation of Hakka Intelligence will be divided into 4 phases:

(1) Bet Start — Bet Ends

Predictions can be accepted as soon as the contract is deployed. Participants should submit their predictions and stakes during this period.After filling in the price changing ratio, the system will calculate the proportion of all coins and create a pie chart automatically.

(2) Bet Ends — Count Score

At this point, the system stops accepting predictions and starts awaiting for the final result. The coin prices at this exact moment will be used as the initial state to calculate the price change in one month.

(3) Count Score — Get Reward

When the time is up, price data will be pulled from Chainlink Oracle to determine the final answer. Participants need to manually click on the Calculate button to interact with the contract, which will calculate your score. If the button is not pressed within this period, participants will be disqualified and lose their stakes.

(4) Get Reward

The reward will be available after score calculations. Again, all participants should claim the rewards manually within the period.

Reference:

Hakka Intelligence Hakka Intelligence Handbook