Ideosphere Aims to Channel Crypto Prediction Markets into Funding Scientific Research

Key Takeaways

• Ideosphere aims to redirect crypto speculation into funding early-stage scientific research.
• Ideosphere intends to use prediction markets to fund research deemed too risky for traditional channels.
• A dispute system and user voting are planned to ensure the integrity of the process.
• In addition to prediction markets, Ideosphere will also offer "discovery" markets and crowdfunding.

Speaking at the Blockchain for Good Awards event in Copenhagen, Denmark, Rei Jarram, co-founder and head of technology at Ideosphere, explained that some research is considered too high-risk for traditional investment. Observing the significant capital flowing into crypto gambling platforms, the project's founders questioned whether they could "siphon some of that speculation away from gambling toward early-stage research."

Jarram identified prediction markets as a suitable fit, stating that "gamblers have a high-risk appetite, and early-stage research and development is pretty risky." While talent and innovation are abundant, funding remains scarce due to traditional channels considering such projects too risky. "The money is there," Jarram asserted, "but if they can’t get the money, it’s probably because of an incentive issue," which is what Ideosphere hopes to address.

Ideosphere's vision involves creating prediction markets around early-stage research, effectively making them a "marketplace of ideas" to attract funding. Researchers can propose hypotheses, traders can speculate on them, and the spread goes to the researcher.

The project is still in its nascent stages, with only front-end mockups currently available. However, they received $10,000 USDT in funding from the Blockchain for Good Alliance during the event.

Addressing the Challenges

As with many decentralized science (DeSci) projects, Ideosphere is more complex than it initially appears. Without countermeasures, the proposed setup could be susceptible to corruption and errors, leading to incorrect market resolutions. Researchers could make errors or arrive at incorrect conclusions, and with a prediction market tied to their results, they might be incentivized to manipulate the market or engage in insider trading. The co-founders have several countermeasures in mind to mitigate these risks.

Rei explained that the platform will implement a dispute resolution system, potentially using the UMA Protocol. If a user initiates a dispute and is proven correct, they receive a financial reward; otherwise, they lose money. This mechanism is expected to create a form of crowdfunded peer review, where experts in the field evaluate the research.

Funding Mechanisms

To access funding, researchers will need to provide a deposit and undergo a vetting process that includes user voting. They must also provide estimates of the commercial viability of potential applications and the time to market.

In addition to prediction markets, Ideosphere plans to introduce "discovery markets." Rei explained that these markets would serve to filter potential research projects "to identify the most high-impact, feasible projects that could be funded with the smallest amount of funding."

Research projects will also be able to access crowdfunding on the platform, as well as funding generated from prediction market trading spreads. Rei acknowledged that "you need a lot of volume to generate substantial funding," which may be insufficient, hence the need for additional funding avenues.