STOX is a prediction market platform running on Invest.com using the Bancor Protocol. Here’s our STOX review.
What Is STOX Blockchain Prediction Market?
STOX Blockchain Prediction Market is an open source, Bancor-based prediction market platform that uses crowd wisdom and a decentralized system to allow users to make trades based on the outcome of events.
The ultimate goal of STOX is to introduce the general public to the features of a decentralized prediction market platform. Prediction markets involve trading stock-like equities based on the likelihood of certain events. If that event takes place – say, if your team wins – then you get paid. The market determines the price of each “stock” based on the perceived likelihood of that event occurring.
STOX’s uses will extend far beyond the world of stocks and financials: the platform can be used to predict and trade the outcomes “in almost any imaginable category”, explains the official website, including finance, sports, politics, and even weather.
The platform is powered by the STX digital token. This token will be used to pay for fees and collaterals, and will be the currency used to invest in event outcomes. The STX token is a Smart Token based on the Bancor protocol for enhanced liquidity and stability.
STOX is featuring Invest.com as its debut provider and operator (the company is actually a spin-off of Invest.com). One of the main advantages STOX has over other decentralized prediction markets is that it already has a userbase of 3 million users available through Invest.com. STOX specifically mentions competitors like Augur and Gnosis in its whitepaper, which you can read.
How Does STOX Blockchain Prediction Market Work?
STOX is an open source platform built on the Ethereum blockchain using the Bancor Protocol. The platform is designed to allow users to trade and participate in prediction markets.
Prediction markets are an exchange where any individual or organization can tap into the wisdom of the crowd to ask any question or predict the result of any event. Like any other exchange prediction platform, STOX utilizes the relevant event in the form of a stock. Participants can trade that stock to trade on the outcome of an event.
As long as a prediction is active, the stock of that prediction can be traded. For example, if your team is down 10-0 with three minutes to go, you can still trade the stock based on your team winning the game – but the price of the stock will reflect their chances of success. The market price can be used to indicate how the crowd, in general, sees the probability of the outcome of an event.
Overall, STOX claims to deliver an “unparalleled peer-to-peer trading experience”. The company will develop and publish a client for the STOX platform in the form of a fully functional prediction market app.
That app will be open source and implement the user side of the model, including on-chain access over Ethereum to STOX smart contracts and access to content, listings, and event metadata from decentralized cloud storage.
Some of the core features of the platform include:
- Create markets and categories
- Create predictions
- Trade with peers
- Take positions at any time, not just upon a specific result (enabled by the STOX Liquid Flow trade engine)
- Use STX tokens for numerous global prediction trades
As mentioned above, STOX has chosen Invest.com as its first operator. Invest.com is an online investment house founded in 2014 with the goal of making it easier for people around the world to invest. Invest has $50 million in annual revenue and 3 million registered clients.
The STX Token
The STOX ecosystem revolves around the STX token. The token serves as the primary form of fees and collaterals. It also serves as the main currency participants will use to invest in event outcomes.
The total supply of STX is fixed. The total supply of STX will be generated in its entirety during the token launch event. STX is an open-source, cryptographic token that is fractionally divisible, transferable, and fungible.
STOX is being careful not to call its token release an ICO. The company refers to it as a “token generation event”. Some of the specific uses for STX tokens include:
- Applying STX to predict event outcomes and receive profits for successful predictions
- Pay fees for participating in event predictions and investing in event outcomes
- Pay syndication fees for promoting events between apps of different providers in the STOX ecosystem
- Event operators are required to hold STX as collateral when publishing new events for users to invest in; in order to participate on the STOX network and generate revenue, providers are required to purchase STX
- Event operators must hold a reserve of STX to act as a counterparty for investments made by users on specific outcomes during the event
The STX token is a Smart Token that uses the Bancor protocol to maintain liquidity. Bancor is an ERC20-compatible token template that offers continuous liquidity through an on-chain market maker. Basically, that means the Bancor smart contract holds a reserve of another currency that amounts to 4% of the market cap of STX, then determines an appropriate exchange rate between the two. It’s an extra layer of protection and stability for STX tokens.
Who Created STOX?
STOX is being developed by a company named STX Technologies Ltd. That company is a spin-off of Invest.com.
STOX is led by Ophir Gertner (Founder) and Yossi Peretz (COO). The company features Eyaql Herzog (Bancor Co-Founder) among its advisors, as well as Uriel Peled (CEO of CoinTree) and Itai Avneri (CEO of Invest.com).
The developers will begin developing STOX in Q4 2017, then develop the STOX app in Q1 2018. By Q2 2018, STOX plans to launch with Invest.com as its first operator.
STOX Blockchain Prediction Market Conclusion
STOX is a platform that uses the Ethereum blockchain to allow users to trade on the outcome of finances, weather, sports, politics, and other global events. The open source platform was created as a spin-off of Invest.com.
Some people see STOX as having an advantage over competitors like Augur and Gnosis because Invest.com already has 3 million users and $50 million in annual revenue – so STOX could hit the ground running and introduce decentralized prediction market trading to people who have never heard of it before (i.e. attract users outside of the cryptocurrency industry).
In any case, STOX will develop its platform and its app throughout the end of 2017 and into the beginning of 2018, with the Invest.com launch taking place before the end of Q2 2018.
The ultimate goal of STOX is to introduce decentralized prediction markets to mainstream audiences. Prediction markets can become huge thanks to the use of decentralized platforms – but today, the general public seems to have very little experience with prediction markets. That’s where STOX sees an opportunity.
You can learn more about the STOX platform online today at Stox.com.