We’re seeing a plethora of blockchain applications and in the TLFT series, will be bringing you more case studies to show you how entrepreneurs are thinking about the technology. Stox is one such that mediates crowdsourced predictions.
Sramana Mitra: Let’s start by introducing our audience to yourself and Stox.
Yossi Peretz: I’m the CEO of Stox. For the last 15 years, I’ve been in many managerial roles in financial companies. I’m a true technology and cryptocurrency enthusiast. I’ve been working on leading products and services. I have played a role in the FinTech sector, specifically in business development and operations management.
Stox is the company that I’m managing at the moment. It’s an open-source Ethereum-based prediction market platform. It can make predictions for any event in the world. We have built it on top of Blockchain. Our platform is the leader in the cryptocurrency field of the prediction market.
Sramana Mitra: When you say prediction market, what does it mean? This is obviously going to be a very complex conversation just because of the nature of what’s happening in the industry. If you could take a use case of your technology and walk us through how the usage flows, that would be great.
Yossi Peretz: Prediction market is sometimes called the wisdom of the crowd. It refers to the idea that a large group of people are collectively smarter than nay individual. Prediction markets are a popular source of information by opening a prediction. For example, who will be the next president of the US? It’s different from a survey. They have to truly investigate and do a research to understand who would be the president.
By doing that, we get a more reliable intelligence and valid prediction of what the future event might be. I can give an example of a use case that we did with another company that is in the field of cryptocurrency called BlitzPredict, which is an aggregator for prediction markets. They wanted to ask the crowd how much they would raise. They were able to fine tune their marketing. They were able to get the feedback of the crowd and understand how the crowd related to their token generation event. That’s one use case.
Sramana Mitra: Let me double-click down on that use case a bit. Can you walk us through how this happens? Who are the stakeholders? How are they interfacing with the exchange?
Yossi Peretz: Anybody who wants to open a prediction on our platform will be able to do so. One of the use cases is the aspect of marketing. A company comes in, opens a question asking, “How much revenue do you think this company will reach at the end of 2018?”
They incentivize the crowd for answering it. Let’s say they give a prize. The crowd comes in. After they put a stake on their prediction, they take our token and they put it on the prediction saying, “I believe this company will make 5% revenue next year. I put a thousand of my coins on it.” Once the prediction is resolved, if they are close, they will win the prize.
Sramana Mitra: Who’s putting the bounty?
Yossi Peretz: That’s why we went for Blockchain. Blockchain is trying to solve the problem. Instead of Stox being an operator of the platform and being the market maker, we make the connection between the predictor, which could be anybody in the world, and the company that’s asking. They work directly with each other with no middleman.