Is Jupiter Behind FoX? New Prediction Market Begins Alpha Testing
Solana’s leading aggregator and perpetual exchange looks to be adding another trading tool to its expansive product suite.
Inspired by the success of Polymarket and Drift Protocol’s BET, the Jupiter ecosystem appears to be building its very own prediction marketplace.
Raccoon Studios, a development team contributing heavily to Jupiter and Meteora, has deployed FoX, or Floating Odds Exchange, on the Solana Mainnet.
Despite no formal or official announcement, alpha testing has begun, with the new application witnessing a handful of recent transactions.
What is the FoX prediction market and how is it linked to Jupiter?
FoX Alpha Testing Underway
On September 4th, 2024, a developer going by JoshuaRaccoons published the first public-facing FoXPaper to the Raccoon Studios GitHub.
Co-authored by Meow, one of Jupiter’s co-founders, the whitepaper details a prediction marketplace that offers dynamic, floating odds on binary market outcomes.
The FoXPaper includes a link to the new application’s webpage, which showcases a basic application in its alpha stage. Currently, FoX only features one market based on the U.S. Presidential Election.
According to SolScan data, the account linked to FoX’s existing market was created and launched on mainnet on the 8th of October. Since launch, the new application has attracted just $64.07 in Open Interest across a mere six transactions.
Given that Raccoon Studio’s other projects, like Jupiter and Meteora, both witness millions in daily trading volume, FoX’s low usage rate suggests that the six transactions likely come from team member’s tests.
Currently in its alpha development stage, FoX may be ill-prepared to withstand high levels of users. Traders are encouraged to take care when interacting with alpha contracts, regardless of the development team’s stellar reputation.
What is FoX and how is it different from PolyMarket or Drift Protocol’s BET?
What is FoX?
In traditional betting, odds are typically fixed by a centralized entity. For example, bookmakers decide on how odds are calculated and set the price themselves.
As the name suggests, Jupiter’s Floating Odds Exchange allows users to trade the outcome of real-world events with floating, dynamic odds. The value and payouts associated with bets fluctuate depending on a variety of factors, including the bet volume, market sentiment, and relevant news.
When traders commit to one side of a binary market, like betting ‘Yes’ on a Trump victory in the upcoming election, the FoX program mints tokens representing the bettor's share of that market. When markets eventually resolve, winners take home their proportionate stake in the winning pot.
Theoretically, these tokens could be further integrated into external DeFi applications. For example, users would be able to use their positions as collateral and borrow against there prediction market bets.
According to the FoXPaper, Jupiter’s FoX boasts a unique edge over rival prediction markets. While other prediction markets often require users to mint tokens for both outcomes, FoX traders only need to mint tokens for one outcome. This allegedly makes the platform more efficient by eliminating unnecessary transactions.
What’s Next?
Prediction marketplaces have witnessed surging popularity throughout 2024, with platforms like PolyMarket enjoying millions in daily trade volume based on Dune Analytics data.
Industry experts have theorized that hyper-simplified, consumer-facing applications could be a massive benefactor of these platforms, with MultiCoin Capital Managing Partner Kyle Samani suggesting novel methods of bringing these markets to a wider audience.
Given that it’s currently in its alpha stage, all prediction markets are created and managed by the development team. Based on the FoxPaper’s conclusion, Raccoon’s Studios is considering developing community-driven governance and arbitration tools, as well as permissionless market creation.
Community-led arbitration could in turn become an additional utility for the $JUP token, with the Jupiter DAO governing disputed market outcomes. Based on the FoXPaper, Raccoon Studios is also considering integrating the protocol fully into Jupiter’s product, which greatly expand the DeFi titan’s growing ecosystem.
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