On the 2nd of March 2019, Amoveo celebrated the one year anniversary of its Genesis block. It is a small, but very ambitious project created by an extremely talented and dedicated programmer and curated by its tightly-knit community. To kickstart this Amoveo blog, we will give you a brief overview of what this project is all about, before covering it in more detail in the following posts.

In short, Amoveo is a blockchain meant for enforcement of derivatives smart contracts, which can be used for investment, insurance, stablecoins, prediction markets, gambling, and so much more.

Zack Hess

Zack is the founder, creator and main developer of Amoveo. He is very well known in the developers community, having previously designed and implemented much of the technology behind Augur and Aeternity. He eventually parted ways with both of these projects.

Still, creating blockchains ‘at least for the next decade’ was what Zack intended to do, so he started building Amoveo completely on his own. This time there was no big company around the project, no ICO, no pre-mine. A year after the Genesis block was created, Zack is leading a dedicated community that is shaping the Amoveo ecosystem.

$VEO

VEO is Amoveo’s native token. It’s also the platform’s only token, as it doesn’t use any sub currencies. This approach makes Amoveo’s oracles more affordable than its competitors’ and allows for a better scaling in the future. The coins were never pre-mined, and as of March 2019 there are over 60,000 of them in circulation. They can be traded on several exchanges, you can find the whole list here.

Futarchy

Futarchy is a futuristic form of governance, originally proposed by economist Robin Hanson. This system implies that the concerned parties are not voting for a particular option, they’re choosing a metric that will determine how well their country, enterprise, startup or anything else is doing. Then, a prediction market is used to determine which policies would best optimise the chosen metric. In the case of Amoveo, VEO’s price and market capitalization can be that metric.

Futarchy is also at the base of Amoveo’s oracles and the platform’s governance. Every variable defining the Amoveo experience (such as block time, block reward, etc.) can be changed by the community using the betting-type governance mechanism, ensuring that the platform is always optimally tuned according to its users’ needs. Some variables, including the block reward, have already been adjusted by the community.

Oracles

An oracle is a mechanism that finds and verifies real-world information and relays it to the blockchain network, so that this information can be used by a smart contract. Oracles are usually used in blockchain networks that facilitate prediction markets and/or derivatives. In the case of Amoveo, there are two types of oracles.

The Question Oracle is used to fetch the result of an event that the network participants have made a bet on, and to determine the winner of that bet. The oracle relays a question about the event’s outcome to the network, where users can decide to report the outcome by placing a bet on TRUE, FALSE or BAD QUESTION. The game theory suggests that if the result of an event is known, there’s no point for users to lie.

The Governance Oracle is essentially a continuation of the Question Oracle dealing with the network’s variables. Anyone can create such oracle asking, for instance, if the miners’ reward should be lowered. Users with vested interest in the matter will then make monetary bets, and whichever answer receives more bets wins.

Betting on future events with Prediction Markets

One of Amoveo’s most popular use cases, Prediction Markets can also be described as event derivatives. They are exchange-traded markets set up with a purpose of trading on event outcomes, with market prices indicating what participants of that market think the probability of the event is. Prediction markets are generally regarded as a much more accurate forecasting tool, especially when compared to surveys and exit polls (compared to them, prediction markets are more accurate by 74%).

This is because of the financial interest that every participant has, which essentially forces people to research the topic they’re betting on in as much detail as possible in order to give an accurate answer and profit from it. They can also be used by any organisation to decide which business or development strategy to use. The blockchain technology is an important improvement for prediction markets, as it removes the central authority tasked with reporting the event’s outcome, reduces chances of fraud and manipulation and simply makes it impossible to be taken down.

Crowdfunding with Dominant Assurance Contracts (DACs)

In Amoveo, DACs can be used to crowdfund public goods or create initial liquidity to get a market going. DACs work very similar to ordinary Assurance Contracts, as implemented in Kickstarter: an entrepreneur is raising money to create a public good and will only receive the funds if a certain goal is reached. The difference is, if the goal wasn’t met the entrepreneur will be obliged to reward the donors. This concept makes contributing funds the most rational and beneficial strategy, as you will either get the public good or get your money back with interest.

In Amoveo, DACs can be implemented in a variety of ways. For instance, the community has already seen them as markets with set odds or as p2p bets with in channels. Users wishing to invest in a public good should bet on that good not being created. This way, users will either get the public good, or get money back with 10% interest. Those odds can of course be modified. Essentially, this becomes a mutually beneficial contract: an entrepreneur is raising money for something that will hopefully raise the price of VEO, while users are investing in it and hedging their risks at the same time.

Hedging risks with Derivatives and creating Stablecoins

Derivatives are financial securities, with a value reliant up an underlying asset. Essentially, they’re synthetic assets. In Amoveo, you can make synthetic assets using portfolios of financial derivatives, settling everything in VEO. This allows different customers to set different margins depending on how much they are willing to pay and how much volatility that want to be shielded from.

Amoveo also enables users to place bets in a way that creates synthetic stablecoins. For instance, if you bet on the price of VEO measured in Euros and place your bet in a way that as long as the price of VEO stays within the margins specified on the contract, you will end up holding an asset that stays the same value as Euro.