Lack of incentive to be a market maker ("market call" creator)


#1

We have the following problem

Imagine the situation.
ETHUSD is at 130.
Participant A believes the ETH will grow from here.
So, he would like to issue the “market call” - “the market will grow” (aka SAN.Rise).

Current system design

He places a bet with some collateral (let’s say 100 SANs), set the time window of 2 days and says “the price will be above $150”.
It’s already a challenge to set the time window. Timing the market is a very difficult part, more difficult than making a prediction on what is the most possible next direction of the market.
But, on the other side, we are all in such a difficult situation.

In the current version, however, we allow to make a conter-stake up until 1 hour before the “market call expiration”.
Means - the issuer takes a risk to predict the future in 24 hours. Where the opposite side takes the risk of only 1 hour. If, for instance, the issuer is right and the price has indeed moved beyond 150 (let’s say it’s 180 2 hours before the expiration) - there is a very good chance that no one will bet against him. So, the issuer gets no reward.
On the other side, if the price dropped and is at $120 2 hours before the expiration, there is a good chance someone will bet against. Unless the issuer will answer (means he will join the cont-stake side), he might lose the whole collateral.

All this puts the current risk/reward into not very attractive territory.

Possible solution A

The time to make a counter stake is always 1/2 of the time of the prediction.
Means, if A makes a call for 1 hour, the opposite side have 30 minutes to make counter call.
If A makes a call for 24 hours, opposite side has 12 hours to make a counter call.
And so on.
That would make the chances more equal. Predict the market in 12 or 24 hours more or less equally difficult task.

Possible solution B

We simplify the “market call” process dramatically.
The “maker” has only to choose: market will rise (SAN.Rise) or fall (SAN.Set)
The default window is always 7 days.
The maker has always to pay some standart fee to issue a call (let’s say 4 SANs).
We calculate the perfomance and risk parameters of the call during these 7 days.
Each week the best makers are rewarded from the reward pool.

We also keep the leaderboard of the makers. So that they can promote their “knowledge of the market”.