# Introduction Introduction to Pythia. ### What is Pythia? [Pythia](https://pythia.company/) is a crypto expert marketplace powered by a reputation platform. Pythia's goal is to identify and empower true expertise in the crypto content creator and influencer space. In doing so, Pythia will improve the health of the overall crypto ecosystem and facilitating the onboarding of the next billion users. ### Why Pythia? ![preencoded.png](https://lh6.googleusercontent.com/NLJSdd1R1ZGlFbuQEqieqjECRVi8RbfBiCZZzUCGB22CEyWq6__-mPPCI57idjEX5DNktSNK4qtOtms4RWYfLNAm5oZ9Qg3hxnGisMtV1QhJdoUvfK12qedF3t4WexkOe-papG5d9WFRBxj3jaSZGw=s2048)![preencoded.png](https://lh4.googleusercontent.com/yNb4oFzs7GGcHFg5X8dBJm3f1Ufj6ELwrO5w09zZzLLQH03tgqjIVsqkfucTUmxdgqNU16-nzhgMhQSwiMjnCusqCYjih85MjJrZi0XkxEeFCKiQIAfzvxdrZJKRWJm-9BBn7va2jc98QQCAPblYWw=s2048)![preencoded.png](https://lh4.googleusercontent.com/EIO-YfYVURLjuGvAgb42SpZRhZiRNsY3wzcXxAbCGHHeYy-sfhWaN6gYAnK2YbkGekhyN2qHYcdMOJwUv8h8KbkBy0mIKoCpsrO9LYW64R4Bs6uiXx5l41wciZLavB2bmc4g05GzMwtuIcaQK1ajfg=s2048)![preencoded.png](https://lh6.googleusercontent.com/mXEL1yEjCsCOdlJQ4lTOeO4b8yKE5l3g-uxlofvRncBL2rFW9hkxuE1CkssGRsksRTGa15GVsAgq6RG1BGmibPJfs30c6M0hNshbrCnmZxGF4TGQBzqoZR4g68evVyU2oU4a-ZaOVRyvo-9KHkpfQw=s2048) Content creators and influencers are essential to the mass adoption of crypto. They are the middlemen conveying to the masses what the latest industry developments in plain language. However, as things stand today, the crypto industry is infested scammers, shills, get quick rich scheme purveyors. How many times have you seen a content creator shill a project, provide directional alpha only then for the former to hit zero levels and for the latter to be completely useless and more often than not harmful? The proliferation of fake expertise, in turn, poses a grave threat to the crypto industry. Shills, scammers, and other fake experts undermine investor confidence, turn the public against the industry and, ultimately, make government crackdowns on crypto more likely. Wat do? ## How Pythia addresses the fake crypto expert problem (spoiler: prediction markets) ![preencoded.png](https://lh6.googleusercontent.com/84VjQMkxPHblpsXMemlrTUIcfKVZG7G_LrtSOvep2xZpQL1t698LkCMcmweHPxm__ieTD-BIeFTdUXCcR3Jk8qclKQ6oM2P3sq35WTRhRkfHSVFU5JvQF8CU3VDoZ-udbV_50YL2qCwBz9DJXogkhQ=s2048)![preencoded.png](https://lh3.googleusercontent.com/83DYDGrCyqaFVg6p-VFWSGphDVDoMMYRWURD_8x7jyyu3LGVtc7XjlipBoRwSjRB48ApY0S29zkNKne3C1SHBPPnt-ZBzIkhW8hXvxKctQ37gnz39aTk9bnkkLG72tEy5vXkpYkYbFjgx4bpFsRZPw=s2048) Pythia has recognized a clear demand for a reputation standard to filter our the bad elements among crypto content creators and, more importantly, empower content creators that understand what they are talking about. Unfortunately, there exists no deterministic way to tell if a content creator/influencer has actual expertise or not, let alone in such a broad, cross-disciplinary area as crypto. Nevertheless, on-chain prediction markets allow us to separate expert crypto content creators from shills and scammers with a high degree of accuracy. This is because prediction markets pretty closely approximate the nature of the crypto content creator/influencer's work, namely to supply alpha about new projects/coins and make directional predictions about the market. In other words, crypto influencers won't be engaging in a new type of activity of Pythia, only now they will be earning tokenized reputation for each correct prediction. On-chain prediction markets also have the advantages of greater transparency and objectivity compared to alternative methods like measuring engagement (engagement can easily be faked). Finally, on-chain prediction markets are very simple to understand. It is a pretty well-known concept in the crypto community and getting ranked based one's prediction accuracy also appears very natural. ### Who benefits?

That said, prediction markets are merely a means to an end for Pythia, with the end being a platform that would empower true expertise and leverage it to the benefit of the entire ecosystem. More specifically, Pythia will benefit the following participants of the crypto ecosystem: 1. **Crypto content creators or influencers:** * Predict industry and market trends in our prediction markets * Build an immutable track record proving one's competency at predicting crypto trends * Monetize that track record by being connected to top Web3 and Web2 projects 2. **Web3/Web3 projects:** * Receive exclusive access to validated crypto experts to accelerate their growth and facilitate the onboarding of new users. 3. **Retail:** * Get actionable analytics and metrics on content creators' predictive power to make finding the relevant person to follow and ask for advice as fast ### Pythia App. The Pythia app is live on Arbitrum. Our platform can be accessed here: . # Roadmap Pythia's roadmap.

# Making predictions How to participate in Pythia prediction markets 1. [Access Pythia's prediction market platform.](#1.-access-pythias-prediction-market-platform) 2. [Connect wallet. ](#2.-connect-your-wallet.) 3. [Select market. ](#3.-select-a-market.) 4. [Make prediction. ](#4.-make-a-prediction.) 5. [Earn reputation. ](#5.-earn-reputation.) Prediction markets are the key mechanism by which crypto experts can earn reputation on Pythia's reputation platform. More specifically, as a crypto content creator, you earn reputation soul-bound Reputation Tokens (see for more information) for making correct predictions about key crypto industry trends (e.g., cryptocurrency price movements or major software updates). So how can you make predictions? Follow these steps: #### 1. Access Pythia's prediction market platform: * Go to and press on "Launch APP" in the top left corner.

* Alternatively, you can access the markets by going straight to the markets page at . * In either case, you should see the following interface:

#### 2. Connect your wallet. * Right now, we only support Metamask. * To be able to make predictions, connect your Metamask by pressing the button the top right corner. * If you do not have Metamask, follow this handy guide to install it: #### 3. Select a market. * Now that you have connected your wallet, you can select a market out of the many we have on the platform (see on how to create new markets). * You can use the touch bar to search for markets based on key words. * Once you have found a market to you liking, click at the centre of the market tab to open the market:

#### 4. Make a prediction. * You should see the following interface upon clicking on market of choice:

* The key bits of information to keep in mind are the "resolution date" (when the market shall be resolved with an oracle), the outcomes, and the market title. * All you have to do is select an outcome you think is more likely. In this particular case there are only two outcomes but there could be more and click on the "make a prediction" button. * You would have to sign two transactions: the first transaction confirms encrypts your prediction (so no one can copy it), the second is the usual transaction signing procedure. #### 5. Earn reputation. * Upon resolution date, you can check the market that you have partaken in. * If your prediction is correct (see to learn how our dual oracle model works), you will be able to collect a certain amount of Reputation Tokens from the market. * To do so, click on "collect reward". The immediate benefit of accumulating reputation is increased visibility on social media platforms (like Twitter). You can link your Pythia account to your Twitter profile so that everyone can see your credentials. In the future, once Pythia's expert marketplace is released, your reputation will positively affect your ability to get matched to projects seeking advisers or ambassadors. See our [section](/pythia-protocol/soul-bound-tokens) on soul-bound tokens and for more information about our on-chain reputation. # Creating new prediction markets How to create new prediction markets. 1. [Go to our Discord server. ](#1.-go-to-our-discord-server.) 2. [Fill out and submit the market creation form.](#2.-fill-out-the-market-creation-form.) In the [previous section](/pythia-info/making-predictions) we addressed the subject of how to make predictions in Pythia's prediction markets. However, you can also contribute in another meaningful way to Pythia's reputation platform: by generating new markets. The process for that is similarly straightforward: #### 1. Go to our Discord server. * Our discord server can be found here: * Once there, you have to join server to proceed. #### 2. Fill out the market creation form. * Go to the market creation channel and fill out and submit the market creation form. * You can also access the market creation form here: * Once filled and submitted we shall notify you in Discord if your market has been accepted. If accepted, you will see your market in the markets page. To increase the likelihood of making it to Pythia's markets page, actively participate in our Discord discussions. # Leveraging Reputation Tokens (coming soon) How can I benefit from Pythia's Reputation Tokens. Crypto content creators and experts earn soul-bound Reputation Tokens. These tokens tokenise and represent the expert's immutable on-chain track record. For now, each token is implemented as a modified non-transferrable ERC-20. The coming uses cases for and benefits of Reputation Tokens: * "Blue check" - with the coming integration with Lens and Farcaster, Pythia will allow prediction market participants to integrate their reputation credentials into their social profile and thus grow their credibility. * Expert marketplace - Reputation Tokens will be a key parameter in out upcoming expert marketplace algorithm matching crypto experts to projects. # Prediction markets What are prediction markets and why they are great! 1. [What are prediction markets? ](#what-are-prediction-markets) 2. [Why use prediction markets for on-chain reputation?](#why-use-on-chain-prediction-markets-for-on-chain-reputation) 3. [Pythia's prediction market design. ](#pythias-prediction-market-design.) ## What are prediction markets? #### Overview of prediction markets and their history. Prediction markets are a type of open market that allows people to predict specific outcomes rewarding them for correct predictions in accordance with some predefined reward function. Prediction markets have a long history, going back as early as the 16th century. However, their benefits were first clearly outlined by the Austrian School economist Friedrich Hayek in the 1940s. Robin Hanson, the inventor of the so-called Logarithmic Market Scoring Rule, has likewise contributed significantly to popularising the concept from the 1990s onwards as a way to improve policy decision making. Notable off-chain prediction markets include the Iowa Electronic Markets (US election markets), Futuur (US election markets) and Manifold (general topic markets). More recently, on-chain prediction markets have begun to gain popularity. As the name suggests, they are implemented on blockchain and hence offer more transparency to their users both in the prediction process (making sure that you given a fair amount of outcome shares for the money paid) and resolution process (making sure that the correct outcome is determined in the most objective way possible). The first such market, Augur launched in 2015. Presently, the biggest on-chain prediction market is Polymarket (launched in 2020). **What makes on-chain prediction markets so special?** On-chain prediction markets are special for several big reasons: 1. Enable accurate estimation of the likelihood of events. 2. Allow us to tranparently rank and reward people based on their predictive ability. ### Why use on-chain prediction markets for on-chain reputation? As mentioned in the previous section, prediction market are a transparent method to rank and reward individuals based on their predictive ability. And predicting is precisely what crypto content creators and influencers do on a daily basis. Some do it more implicitly cherry picking interesting projects and write about their strengths, weaknesses, and future prospects or more explicitly in tweeting market forecasts or shilling certain coins. On-chain prediction markets therefore are an excellent format to judge the quality of crypto content creators. They are a simple to understand and transparent methodology, unlike some other off-chain reputation models out there that use Machine Learning and web scraping to collect information on influencers/content creators. At the same time, they also allow for a broader assessment of knowledge than social trading platform that are only really geared for price prediction. Finally, by their nature, prediction markets offer crypto content creators an environment they are used. ### Pythia's prediction market design.

Fig.6: Pythia's prediction market design

Pythia's prediction markets have three major components to them, the user, the markets themselves, and the oracles that resolve the said markets. The user (a content creators in our case) makes predictions and accumulates reputation. Content creators also have the ability to create new markets. Decentralized oracles are another key components of the architecture. Decentralized oracles (Chainlink and Kleros arbitration courts) resolve markets, that is identify the correct outcome, in the most objective way possible. Chainlink accumulates and averages information from a variety of sources to arrive at an answer, Kleros leverages game theoretic mechanisms to source public wisdom to determine the outcome. In the case of Kleros, Pythia (Pythia's market contract to be specific) routes its requests through reality.eth, which then queries Kleros courts. Decentralized oracles ultimately determine whether the user earns reputation or not.

Fig. 7: Pythia private prediction markets' design

On the whole, Pythia's market design is similar to what you would expect to see in vanilla on-chain prediction markets. However, there is one key difference: Pythia makes content creator prediction private before resolution (i.e. before the correct outcome is determined by a decentralized oracle). We shall cover the rationale behind this in the following section, but briefly the reason for this additional architectural element is to protect the value of the predictions. Making predictions private, in other word, ensures that we prevent prediction copying and identify those who truly understand market and industry trends. # Commitment schemes How Pythia leverages commitment schemes for its prediction markets. 1. [What are commitment schemes](#what-are-commitment-schemes.). 2. [How commitment schemes compare to alternative](#how-commitment-schemes-compare-to-alternatives.)[s.](#how-commitment-schemes-compare-to-alternatives.) 3. [How commitment schemes improve Pythia's prediction market design. ](#how-commitment-schemes-improve-pythias-prediction-market-design) ## What are commitment schemes. Commitment schemes (also known as commit-reveal schemes) are a cryptographic primitive that allows an individual to "commit" to a certain value with the ability to reveal the concealed value later (strictly speaking, they have to reveal the value for liveness purposes). To commit in most cases means perform some deterministic calculation with the value/message as an input. Commitment schemes enable temporary privacy/anonymity and hence can be used for things like the secret ballot for example.

Above we can see the architecture of a hypothetical commitment scheme. The construction involves two agents, a client and a verified control. The client commits to a message by way of signature and sends the commitment to the smart contract, which stored the message. After some time elapses, the client reveals the message that they have signed. The verifier contract then computes the commitment of the message returning "TRUE" if the two commitment are equal to each and "FALSE" otherwise. ### How commitment schemes compare to alternatives. The main alternative to commitment schemes are zero knowledge proofs (aka ZKPs).

ZKPs likewise allow people to commit to messages/values but, unlike commitment schemes there is no need to reveal the message after the time lapse. Instead, the user can provides a cryptographic proof verifying that they have actually committed to the message. ZKPs thus offer greater privacy and make fewer liveness assumptions but at the cost of usability. ZKP schemes are significantly more expensive than commitment schemes. Specifically, whereas one verify operation costs \~100 for commitment schemes and \~300-500k gas for ZKPs (SNARKs to be specific). At Pythia we have opted for commitment schemes instead of ZKPs for two reasons mainly. Firstly, we do not need preserve the privacy of user predictions after market resolution, so commitment schemes provide just the necessary amount of privacy. The cost, which is related to how much privacy one wants to preserver, was likewise taken into consideration. ## How commitment schemes improve Pythia's prediction market design?

Commitment schemes improve Pythia's prediction markets in two major ways: 1. They make the data about individual participants less noisy and more robust: * With the help of commitment schemes, Pythia can make predictions reliably private during the prediction process. Privacy helps prevent prediction replications and hence the preserves the value of individual prediction, allows us to separate truly well-informed content creators. 2. They allow us to get rid of the monetary/casino element and attract more people: * The privacy attained via commitment schemes allows us to make our prediction markets effectively free to participate. Traditional prediction markets force users to put money on the line to discourage people from blindly copying predictions (i.e. going with the crowd), as more popular (i.e. more likely) outcomes would be more expensive to bet on. Privacy does the job for us in this respect, so no special pricing function is needed. * Removing the monetary/casino element from prediction markets from is good, because many content creators are not gamblers and are, in fact, risk averse. Putting money on the line also disadvantages people with less money to spare, so by # Soul-bound tokens Pythia's soul-bound tokens. What are soul-bound tokens? Why use soul-bound tokens in Pythia? Pythia's soul-bound tokens? ### What are soulbound tokens?

Soulbound tokens are a type of token that represent commitments, credentials, and affiliations of the holder. The concept of souldbound tokens was first broached by Vitalik Buterin in "Decentralized Society: Finding Web3's Soul" (2022). The concept is closely related to the idea of on-chain reputation. The idea being put forward is that Web3 needs its own version of reputation systems, because reputation systems are a convenient way to establish basic trust and transact in our highly impersonal societies. The Web3 world already has reasonably effective reputation systems (e.g., credit rating, academic credentials); however, most of these are not applicable to the Web3 context, due to the latter's greater demands to privacy, decentralization, and personal sovereignty. Soulbound tokens are therefore a way to reinvent reputation systems in a way that does not contradict Web3 and crypto's core tenets. Soulbound tokens are usually untransferable and have some reputation function underlying them (i.e. function that determines how the holders accumulate and/or lose reputation/track record).