Even though the Amoveo Question Oracle can answer questions, its primary objective is to ensure network functions, which includes Prediction Markets (PMs).
Suppose that two PM participants, (we’ll call them players) are arguing: “Will the market cap of BP be above or below 150B pounds by year end?”. Both bet 1 VEO each on it. At the end of the year, the winner should get 1 additional VEO and the loser will have 1 VEO less.
When the time comes to close down the contract, the oracle asks the network participants: “Does the current BP market cap exceed 150B pounds?”. Those willing to answer (reporters) go on financial sites to find the correct information and answer the question by placing bets. The option on which they bet the most amount of money is considered the winning one. The winner among the players is determined on those bases. The reporters that voted for any other answers lose their stakes, which are then re-distributed among the supporters of the winning option.
In a sense, we have two nested contests here. The first one begins between the PM participants when BP’s end of year market cap is unknown. The second one goes on between the reporters, when the end of year market cap is already known, and the winner of the PM needs to be determined. However, strictly speaking, there is only one contest happening here: between the PM participants. When it comes to the reporters, if the oracle is operating normally, their only function is simply to report BP’s end of year market cap to the network. If the BP’s market cap clearly exceeds 150B pounds, then most bets will be placed on TRUE, if it doesn’t — most reporters will bet on FALSE. If a reporter accidentally makes a mistake, he or she will just lose their bet.
Nevertheless, in theory, there could be a situation when the reporters will begin an actual contest. As a result, a controversial or an outright incorrect answer could “win”. We will discuss such cases in section 4.