CFTC launches the first DeFi operation in 2022: Polymarket

On Monday, the US Commodity Futures Market (CFTC) announced that the Polymarket cryptocurrency trading platform is running on Decentralized Financial Instruments (DeFi) after failing to access Rule.Forex Trading to provide binary options trading . this year's app for the company. CEA for Business Registration Services (DCM) and Swap Execution Facility (SEF). Fine Polymarket $ 1.4 million and ordered them to shut down all non-compliant businesses.

Obviously, the CFTC allocates the event assets of the Polymarket platform based on the exchange (an exchange in which both parties agree to exchange assets with each other at a specific term).

According to the survey, Polymarket has supplied over 900 independent businesses since its inception and has been used and operated by blockchain smart contract holders. Since its release in June 2020, Polymarket has traded nearly 5 billion times and is one of the most valuable crypto unicorns worth over $ 1 billion.

Polymarket frequently cooperates with regulators, and the CFTC reports that the company has "worked closely with authorities to investigate the matter by reducing public sanctions." Polymarket said on Twitter: “We are delighted to have reached an agreement with the CFTC and look forward to moving forward and focusing on the future of Polymarket as a non-compliant industry. The team , practices and procedures are in place, which will ensure that compliance is a key factor in moving Polymarket's global business forward. next. "

The cryptocurrency market is not on a first come, first served basis

Simply put, market forecast is the product market based on facts and facts about the future. Unlike platforms which have similarities, bets are based on actual data collected by participants and prices are determined based on the performance of each participant in the transaction. Entrants judge and predict the outcome of future events and may win if their estimations conform to accepted public standards.

It is important to note that the value of the "commodity" in an auction market indicates that participants believe the return will be accurate. These events range from presidential gains to tomorrow morning's weather.

Since the advent of information exchange, mankind has been striving to create an online trading platform that allows all users to engage in online trading easily and quickly. The prediction market relies on multiple middlemen to fulfill their responsibilities, and employees pay the price because they are required to make accurate and fair predictions. Things like maintenance costs, segmented activities, and black box functionality protect users from revenue.

As crypto assets continue to grow in the core, blockchain-based technology will provide solutions and facilitate the development of a decentralized world. With the support of blockchain technology, the betting industry has become open and reliable. For example, who will be elected in the next US election and which team will win the US Cup? These questions arise at a future time and the end result is true and uncertain.

Crypto Prediction Market is a distributed DeFi protocol that allows anyone to trade the results of an event in a smart contract, provided certain situations are encountered without interruption. . As the DeFi user experience improves, the advantage of market forecasting is that it spreads to hot global events, providing users with more competitive and efficient advantages.

Polymarket is a trading platform developed on the basis of the second generation solutions of Ethereum and Polygon, where users can bet on the hottest spots in the world, such as US elections, spread, value of cryptocurrency, etc., in the United States. dollars. Stablecoin USDC for emerging markets. Ethereum co-founder Vitalik Buterin praises Polymarket:

“Try Polymarket now. What makes it special is that it is built on Polygon's Ethereum side chain and offers an optimized user interface to appeal to outsiders. It also has the option of purchasing USDC with a card from credit. "

Let's do an incomplete estimate as an example. "How will the EU's annual inflation rate increase by 5.4% in December? This event gives the user two investment options, yes or no, both are adjusted to $ 1 depending on the outcome of the market aware of the situation. If the user feels that the market price is different from the actual situation, he can buy the option and profit from it.

Compared to other commercial industries, Polymarket has two main advantages.

First, the project is Polygon-based and users of the system do not need to be monitored by the Ethereum mainnet, thus avoiding high operating costs and long downtime.

Second, users can purchase USDC to trade in this project using their debit or credit card without having to have their assets and private keys encrypted, reducing the risk of initial user access.

At the same time, Polymarket adopts Automated Market Maker (AMM) process, and all consumer products are deducted from the 2% price for service providers.

However, the Polymarket development team did not disclose details of the project. At the same time, there is currently nothing for users to create predictive events on their own. All estimates are made by stakeholders and determined on their own terms based on the information provided. It is only that trade disputes can be resolved. by the Commission for Market Integrity (MIC).

In fact, betting on betting is a platform where traders can bet on real world events, and although they started early compared to other DeFi protocol model classes, this is the first concept. use of classifications used by the blockchain. He has developed an incredible product over the past few years.

Can the cryptocurrency prediction market bend the rules?

By mid-2021, the CFTC hopes to become the largest crypto regulator. CFTC President Rosin Behnam announced at the meeting that the CFTC intends to become the “police” of crypto assets. Since $ 2.7 trillion.% Is a commodity, it is especially important to expand the strength of the CFTC.

The CFTC has been legal in the crypto industry for a few years. In October 2021, Tether Corporation, the maker of the largest stable USDT, was fined $ 41 million for capital fraud. Currently, the CFTC regulates the crypto derivatives industry and can lead to fraud in the crypto industry.

According to Polymarket's press release, Executive Director Vincent McGonagall said: This keeps the market strong and transparent and provides protection for our customers in accordance with CEA and our rules. "

In June 2021, CFTC Director Dan Berkovitz said unlicensed DeFi activity could be illegal in the United States. Derivatives in the DeFi industry, such as futures contracts, are not legally binding on commodities, and federal law "makes no exceptions to financial transactions." industry. At the same time, he said, the DeFi derivatives market will fall into the hands of the CFTC.

In addition, excessive regulation, legal restrictions and regulatory costs that the platform has to bear also affect the growth of the existing gaming industry, and the blockchain-based crypto betting industry is generally seen as a policy. of escape.

The CFTC granted special permission for the exemption to PredictIt, a market research company in 2014, in part because it was a non-profit study conducted by the University of Victoria, Wellington , New Zealand, and raise an investment of $ 850. However, while PredictIt has been approved by the U.S. government, many state laws still restrict these platforms, and states such as Alabama, Colorado, Hawaii, Illinois, and Louisiana will often be considered illegal. By comparison, InTrade, a much larger trading platform, was sued by the CFTC for illegal trading and forced to shut down.

Comply with PredictIt 2020 business platform standards

Blockchain based betting is more decentralized than expected by the main platform to avoid regulation. In a blockchain-based market forecast, users are free to adjust their business, and the blockchain platform provides management and financial support for positive behaviors.

It is not known at this time what he will do after leaving the post.

It should be noted that the current cryptocurrency trading platform is not fully decentralized. Blockchain research firm The Block believes in its annual report for 2021 that the forecasting process must be efficient and that anti-corruption measures must be taken.

With some key business predictions, such as PredictIt, still working, it remains to be seen whether crypto prediction platforms can become blockchain killer apps or spend their time in the DeFi ecosystem. .