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Prosper (PROS) Token Explained

Prosper (PROS) Token Explained

Explainers Cryptocurrencies

21 Mar 2022

Prosper is a non-custodial cross-chain prediction market and hedging platform that allows people to make predictions about the outcomes of various events. The project aims to solve the lack of liquidity in this sector of the DeFi ecosystem by implementing binary models of liquidity provision. Prosper uses Chainlink, a decentralized network of nodes that provide data from off-blockchain sources to on-blockchain smart contracts via oracles, for the price feeds in order to determine the final price of a prediction market. This helps to avoid market manipulation and ensures a high level of security for user funds.

To participate in a prediction market, you need to connect to the decentralized application with your Metamask wallet using the BSC mainnet. Next, you need to select the currency you predict in (BNB for example) and the prediction pair (AXS for example). Select “Bull” or “Bear” against the trading pair you are making a prediction about, and confirm your position. Once the pool is closed, you can claim the rewards if you won the prediction. The protocol also plans to open several “social” prediction pools which could include the outcomes of popular sports competitions for example.

The PROS token is an ERC-20 token that serves as the utility token on the Prosper platform. It is used for governance, custom prediction pools creation, prediction insurance, commission rate discounts, and other functions. It started trading in early 2021, quickly reaching the all-time high of $9.39 in February. But PROS token quickly settled in a range between $2 and $3 for most of the year, hitting a few sporadic spikes above the $3 mark occasionally. 2022 has seen the token trade further down however. The token is currently changing hands at $0.53, which is 95% below the all-time set over a year ago.

But the project may still prosper this year. It was recently announced that Animoca Brands - the leader in digital entertainment, blockchain, and gamification - acquired the Prosper platform and its assets, including the token reserve of Prosper Tokens (PROS) that was within Prosper’s possession. In a press release, Animoca Brands said that it considers Prosper a strategic acquisition because the technology underlying the prediction markets application will be useful across several games and NFT-based products. Some examples include making predictions on the outcome of events, such as voting for token holders and DAOs, effectively acting as a decentralized “oracle” service. It follows a series of strategic investments made by Animoca Brands, including metaverse projects The Sandbox Game, Axie Infinity, Dapper Labs, and infrastructure players like Hex Trust.

The Prediction markets ecosystem

There are many different types of applications within the DeFi space and prediction markets are a sizeable sector within the ecosystem. But it’s not always about prediction price points within a trading pair. There are many other protocols that offer prediction markets for things like sports results, election outcomes, or user-created markets that rely on an oracle to verify results. This is facilitated through the use of smart contracts, which execute autonomously and without input from centralized authorities as soon as certain conditions are met.

Augur was one of the first smart contracts-enabled prediction markets when it went live in 2018. To this day, it still remains one of the more popular dApps used. Key features include user-generated markets which allow anyone to create a market of any real-world event for a small fee. The creator sets the price of the event between 0% and 50% and earns from trading fees.

Other protocols include:

  • PlotX: a cross-chain prediction market protocol that enables crypto traders to make crypto-asset price predictions in hourly, daily & weekly time frames.
  • Polymarket: an information markets platform, where you can bet on the highly-debated topics and earn for being right.
  • Gnosis: an open platform for creating prediction market applications on the Ethereum protocol.

The predictions market sector has already evolved significantly since the early days, evolving from price predictions to other real-world events and user-generated markets. As demonstrated by the Animoca Brands acquisition of Prosper, the next growth chapter could be even more exciting as prediction markets become further integrated with the metaverse. Both the activity of participating in prediction markets could be gamified and the events on which people are placing bets could take place in the metaverse.

If there is a race in The Sandbox Game to see which player can make its way through the lava land obstacle course first without getting scorched, why not place a bet on Sandbox player IntensePebble98 to make things interesting?

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