Prediction Markets Protocol

A decentralized prediction market smart contract built on Stacks blockchain using Clarity. Users can create binary outcome markets, place bets, and claim winnings based on resolved outcomes.

Features

Core Functionality

• Market Creation: Create prediction markets with custom questions and timeframes
• Binary Betting: Place bets on YES or NO outcomes
• Automated Resolution: Authorized resolvers determine winning outcomes
• Proportional Payouts: Winners receive proportional share of the total pool
• Dynamic Odds: Real-time probability calculation based on bet distribution

Security Features

• Authorization checks for market creators and resolvers
• Time-based market controls (end-time, resolution-time)
• Double-claim prevention
• Platform fee mechanism (2% default, max 10%)
• Emergency withdrawal for contract owner

Contract Architecture

Data Structures

Markets Map

{
  creator: principal,
  question: string-ascii,
  end-time: uint,
  resolution-time: uint,
  total-yes: uint,
  total-no: uint,
  status: uint,
  winning-outcome: optional bool,
  resolver: principal
}

User Positions Map

{
  yes-amount: uint,
  no-amount: uint,
  claimed: bool
}

Market States

• Open (1): Accepting bets
• Closed (2): No longer accepting bets
• Resolved (3): Outcome determined, winnings claimable

Usage Guide

1. Create a Market

(create-market 
  "Will Bitcoin reach $100k by end of 2025?" 
  u1000000  ;; end-time block height
  u1100000) ;; resolution-time block height

Requirements:

• End-time must be in the future
• Resolution-time must be after end-time

2. Place a Bet

(place-bet u0 true u1000000) ;; market-id, outcome (true=YES), amount in microSTX

Requirements:

• Market must be open
• Current block must be before end-time
• Amount must be greater than 0
• User must have sufficient STX balance

3. Close Market (Optional)

(close-market u0) ;; market-id

Authorization: Market creator or contract owner only

4. Resolve Market

(resolve-market u0 true) ;; market-id, winning-outcome

Requirements:

• Must be called by the designated resolver
• Current block must be at or after resolution-time
• Market must not already be resolved

5. Claim Winnings

(claim-winnings u0) ;; market-id

Payout Formula:

payout = (user_bet / winning_pool) × total_pool
net_payout = payout - (payout × platform_fee%)

Requirements:

• Market must be resolved
• User must have winning position
• Cannot claim twice

Read-Only Functions

Get Market Information

(get-market u0) ;; Returns market details

Get User Position

(get-user-position u0 tx-sender) ;; market-id, user

Calculate Potential Payout

(calculate-payout u0 tx-sender) ;; Before claiming

Get Current Odds

(get-odds u0) ;; Returns {yes-odds: uint, no-odds: uint}

Error Codes

Code	Error	Description
u100	err-owner-only	Action restricted to contract owner
u101	err-not-found	Market or position not found
u102	err-already-exists	Resource already exists
u103	err-market-closed	Market is closed for betting
u104	err-market-resolved	Market already resolved
u105	err-invalid-outcome	Invalid outcome specified
u106	err-insufficient-balance	Insufficient STX balance
u107	err-already-claimed	Winnings already claimed
u108	err-not-resolved	Market not yet resolved
u109	err-unauthorized	User not authorized
u110	err-invalid-amount	Invalid amount specified

Admin Functions

Set Platform Fee

(set-platform-fee u3) ;; Set to 3% (max 10%)

Authorization: Contract owner only

Emergency Withdraw

(emergency-withdraw u0) ;; market-id

Authorization: Contract owner only
Purpose: Safety mechanism for critical situations

Example Workflow

;; 1. Alice creates a market
(create-market "Will it rain tomorrow?" u1050000 u1060000)
;; Returns: (ok u0)

;; 2. Bob bets 100 STX on YES
(place-bet u0 true u100000000)

;; 3. Charlie bets 200 STX on NO
(place-bet u0 false u200000000)

;; 4. Check current odds
(get-odds u0)
;; Returns: {yes-odds: u33, no-odds: u66}

;; 5. After resolution time, Alice resolves
(resolve-market u0 true) ;; YES wins

;; 6. Bob claims his winnings
(claim-winnings u0)
;; Bob receives: (100/100) × 300 = 300 STX - 2% fee = 294 STX

;; 7. Charlie gets nothing (bet on losing outcome)

Security Considerations

• Time Manipulation: Markets use block heights to prevent time-based attacks
• Front-running: Consider using commit-reveal scheme for high-value markets
• Oracle Risk: Resolution depends on trusted resolver (consider decentralized oracle)
• Liquidity: No guaranteed liquidity; payouts depend on opposing bets

Deployment

1. Deploy contract to Stacks blockchain
2. Contract owner is set to deployer's address
3. Platform fee defaults to 2%
4. Market nonce starts at 0

Testing Checklist

• ✅ Market creation with various parameters
• ✅ Betting on both outcomes
• ✅ Time-based restrictions (end-time, resolution-time)
• ✅ Authorization checks
• ✅ Payout calculations
• ✅ Double-claim prevention
• ✅ Edge cases (zero bets, one-sided markets)