ForumBet
ForumBet is a DeFi protocol that allows users to invest and speculate on the real world AI economy.
Last updated
ForumBet is a DeFi protocol that allows users to invest and speculate on the real world AI economy.
Last updated
ForumBet is a fully decentralized protocol that makes it theoretically possible to bet on any numerical value without requiring an external counterparty. This could be the price of a GPU, the performance of an LLM model, the valuation of a private company, the fees generated by a DePIN protocol, local housing markets and much more.
At the time of creating these docs, Elon Musk is roughly worth $315B USD. We currently have a bet that follows Musk's net worth in billion USD. This means ForumBet issued a token that is worth 315 USDC and follows the price movements of Elon Musk's networth. You can mint this token now if you think Musk's net worth is going to rise and redeem it later for USDC again.
The core of ForumBet are "bet tokens". A bet token represent one unit of the numerical value.
Example: A high-growth startup is worth 1 billion USD after it's latest fundraise. Now a bet token is created to represent the valuation of a startup after the latest fundraise in billions, so the token can be redeemed for 1 USDC.
Bet tokens can be minted with USDC from the ForumBet smart contracts (generally at a slight markup to the actual numerical value) and the underlying value can be redeemed by burning the bet tokens with the ForumBet contract with a 5% tax.
A bet token always has a max supply cap after which no further tokens can be minted, a mint price, a redemption price and an end date/expiry date after which the redemption price freezes but tokens still can be redeemed but no adjustments to prices will get made. All those values can be adjusted and set by the DAO.
The ForumAI DAO governs the ForumBet protocol and consists of $FORUM holders. The creation of bet tokens, changing any bet token values and taking USDC out of the contract to put them in the treasury, require a DAO vote.
Let's take a look at the previous example with the 1 billion dollar startup. Now let's assume some time passed and the startup grew a lot. You think the valuation should now be worth more like 5 billion but the bet token only allows redemption for the value after the latest fundraise at 1 billion. The main purpose of the orderbook based decentralized exchange is to help protocol users buy and sell the bet tokens to each other at a more appropriate valuation. You could try to create a sell order at a price of 5 USDC per bet token but you will need a buyer for it at this price for the order to actually get fullfilled. When the startup has an IPO, a new latest latest fundraise, at 10 billion USD, the redemption value will get set to 10 USDC.
The DAO controls a treasury to ensure there is always enough USDC to cover the redemption of all bet tokens. The treasury gets invested based on community votes and USDC will flow between the ForumBet smart contract and the treasury.
The mint price and the redemtion values are officially set by price oracle smart contracts. The price oracle address is specified in the bet creation DAO proposal and can be set to be the DAO itself. It might make sense to have an external contract be the price oracle if more frequent price updates are necessary.
