- What is Amoveo?
- What is VEO coin?
- What are prediction markets?
- What are the oracles? How are they implemented in Amoveo?
- How are derivatives implemented in Amoveo?
- Is Amoveo superior over Augur, Gnosis and Bitcoin Hivemind?
- Where to learn more about Amoveo?
What is Amoveo?
Amoveo is a new blockchain project launched in March of 2018, and is intended for investment and insurance smart contracts, as well as for all types of other derivatives, including stable cryptocurrencies (stablecoins). Amoveo is based on the concept of Prediction Markets and payment Lightning channels. The blockchain has a number of important technical advantages over such analogues as Augur, Gnosis and Bitcoin HiveMind. The internal Amoveo token is referred to as VEO and its one thousandth part (1/1000) is the mVEO. The coin is mined using the traditional PoW (Proof of Work) algorithm. Its creator and main developer is Zack Hess, co-founder of Augur (REP) and Aeternity (AE).
What is VEO coin?
VEO is not just a coin, but the internal currency of Amoveo's prediction markets. VEO is used when making bets and distributing awards. The target audience is predictors and users of derivatives created with Amoveo smart contracts. Besides, VEO can be of interest to miners and investors as a promising coin within its own niche.
What are prediction markets?
Prediction markets provide special instruments for creating assets with their end-value tied to specific events, such as which presidential candidate will win an election, or parameters like the prices of stocks by the end of the year. In fact, current market prices of these instruments are odds-on forecasts of their underlying events or parameter values, and are analogues of sports bets. In Amoveo, users enter into an agreement in the form of a smart contract. For example, one of the users says that Bitcoin will rise in price by the year’s end, another says that it will get cheaper. Both wager some VEO on it. If one of the participants wins, he receives the whole sum. A smart contract about this is registered on the network. At the end of the year, the network obtains the price of Bitcoin through oracles and determines the winner.
What are the oracles? How are they implemented in Amoveo?
An oracle is a mechanism enabling the network to receive information about the outside world. Generally, oracles are technically challenging, because they have to choose trusted information sources, guarantee its integrity and properly process it to determine whether the contract conditions are met. But with respect to prediction markets oracles are relatively simple: the data is easily represented as a mathematical formula. In Amoveo, an oracle renders three outcomes: “True”, “False” and “Bad Question”.
There are two types of oracles inside the network: governance and question. Governance oracles are used to make decisions about network development. For instance, a question about changing miner awards. Governance oracles are relatively expensive, currently it costs 0.3 VEO to launch one. Question oracles are used to determine bet winners. Its launch currently cost 0.02 VEO. The questions may sound like “Did a democrat win the elections?” or “Did Bitcoin’s price rise above $7,000?” and so on.
The important distinction of Amoveo is that oracles also work for a fee, but not necessarily from those betting, anyone can launch an oracle. When it’s time to determine who won the bet, all network users receive the question at hand. Those willing to participate in the oracle’s work have to answer the question and back it up with money. The answer that gets the most amount in bets is determined as true. Those who bet on the opposite outcome lose. According to gaming theory, in such situations it doesn’t pay to cheat, because the true answer is widely known or easy to verify. The undecided will prefer not risk their money. But if the question is of scandalous nature or concerns common myths, those incorrectly answering False may have the majority. To correct the situation, those confident that the majority is wrong can double their bets. This measure cannot not guarantee that an oracle is absolutely error-free, but in prediction markets players are unlikely to bet large amounts on answers that are difficult to check using an oracle.
How are derivatives implemented in Amoveo?
Many derivatives in financial markets are contracts for exchange of funds based on the outcome of a given event or parameter value. For example, a CFD (Contract for Difference) or a non-deliverable futures are contracts that require payment based on the market price of their underlying assets (stocks, commodities), but without exchanging the assets themselves. The contract participants just need the asset price. Oracles allow users to enter into similar contracts depending on the information about external events and use VEOs as a currency. Stable cryptocurrencies can be created in such manner tied as the underlying to the dollar or other relatively stable assets. But the network would be transacting in VEO units, thus eliminating the need to increase its processing capacity.
Is Amoveo superior over Augur, Gnosis and Bitcoin Hivemind?
In the words of Zack Hess, Amoveo is a result of lessons learned from prior coins such as Augur. Zack, better than others, knows their weaknesses and is trying to address them. His key idea is to get detailed requirements from the initial users, adapt the project accordingly and then advertise it to new users.
Here is a quote from Zack:
“With this kind of new technology, there are many things that we do not know. We need to avoid making assumptions about how the technology will be used. We need to listen to users and adapt to their needs. We need to investigate many possible use-cases to see which will be popular first.”
Nevertheless, there are already a number of specific improvements in Amoveo as compared to Augur, Gnosis and HiveMind. First, Amoveo does not use sub-currencies, exclusively relying on VEO. In contrast, Augur contracts are done in Ether (ETH), while its own token (REP) is only used to pay for oracles. Similarly, Bitcoin HiveMind is built atop of Bitcoin (BTC) Lightning channels. Gnosis has two proprietary tokens GNO and OWL (the latter tethered to the dollar) with a complicated award payment system. Amoveo does not depend on other networks and utilizes a single token including for funding oracles. The oracles are an integral part of the network and are cheap. Second, Amoveo has its own Lightning channel like Bitcoin, which makes for virtually instant transactions and low commissions. Third, Amoveo uses combined markets with two oracles instead of one (allows nine probably outcomes versus three). As a result, we have, perhaps, the most convenient smart contract among the existing blockchain networks.
Where to learn more about Amoveo?
- Main source – the project page on GitHub https://github.com/zack-bitcoin/amoveo
- White Paper – https://github.com/zack-bitcoin/amoveo/blob/master/docs/white_paper.md