Because PredIQt is a decentralized protocol, there is no central authority that dictates and monitors user behaviors. As such, the core incentives built into the protocol must properly guide users toward behaviors that are desirable and functional. On PredIQt, this is done through the use of fees built directly into the platform. All of these fees are paid and distributed among platform participants, rather than any central authority.
Market creation fees are paid in $IQ and are burned at the time that the market is created. This serves to incentivize users to create high-quality markets and to subsequently promote them. While any market creator automatically has their initial $IQ investment burned, they stand to earn more if their market is popular. This fee guides users towards making definable, valid markets.
The $IQ that is burned in the market creation process serves as a benefit to all $IQ holders by reducing the amount of $IQ in circulation.
Currently, the market creation fee is set to 2,500 $IQ, but can be via community consensus in the future.
Users on the winning side of a market pay a total of 6% of their earnings in fees-- 2.5% to the market creator, 2.5% to the market resolver, and 1% to the referrers. Importantly, none of these fees are collected by Everipedia as an organisation. These fees simply exist as built-in structures that power the incentives of the platform and rewards participants for work performed.
Because market creators must pay an $IQ fee in order to create a market, they also stand to profit in the event that their market is successful. When a market is resolved, the account that created the market is paid a fee. This fee serves as a reward to the market creator for bringing new interesting markets to the platform. In the case of popular markets, this should surpass the market creation fee that was paid, allowing market creators to profit from popular, well-promoted markets.
Currently, the creator fee is set at 2.5% of the market’s open interest at the time of resolution. In other words, each user who cashes out their winning shares pays a 2.5% fee to the market creator.
While the market creation fee is set at a fixed amount of $IQ, the creator fee is a percentage of the market’s earnings. This allows for unlimited upside potential for market creators.
When a market is resolved, a fee is taken and paid to the account that triggered the resolution. This is called the market resolver fee, and it serves as an incentive for market resolvers to perform the work necessary to finalize and trigger market payouts.
Currently, market resolver fees are also set to 2.5%. This can be updated via community consensus.
In order to incentivize users to promote and share markets, PredIQt has a built-in market referral system. This allows users to profit not just from direct participation in markets (via prediction rewards), but also from market promotion.
We consider this a key piece of the PredIQt infrastructure that helps drive market awareness and participation. Any user who shares and promotes a market via their unique referral code earns a pro-rata share of the market referral fees. These fees are currently set at 1%.