Prediction markets are exchange traded markets dealing in event derivatives or claims contingent on the future outcomes of events. As a forecasting meta-tool they are useful in encouraging, aggregating and quantifying widely scattered expertise in a kind of distributed intelligence known as the wisdom of crowds. The market price mechanism in PMs is supposed to generate reliable signals in condensing all available current information about the claim, making the market function as a kind of advisory or an oracle, tracking consensus among traders with strong incentives to make accurate predictions and directly tapping the expertise of a wide range of people with first-hand and on-the-spot knowledge about the subject of inquiry.

Augur is the established prediction markets protocol on Ethereum on the basis of which other PM platforms build their custom/specialized markets (Veil, Guesser, etc.) The latest one to have been announced and soon to launch is Flux, a platform for derivatives on startups which builds on Augur, 0x, and Maker using the NEAR Protocol - a highly scalable chain optimized for developer-friendly dApp development. NEAR serves as a base layer connecting with existing Ethereum infrastructure via a dedicated bridge, allowing it to interact with any smart contract and call any of their functions.

Flux is designed as a plug-and-play solution for spinning up apps on any vertical with transaction fees a fraction of the cheapest currently existing. Dai integration at protocol level provides a stable numerarie and market resolution time frames up to 72 times faster than the fastest ones at present. The alpha app has been released on the NEAR testnet.

The concept of prediction markets focused on derivatives on startups - on things such as project milestones, product releases, progress and setbacks, manipulation and scandals and so on - is potentially a very useful one that could possibly benefit markets and market participants a lot. Since it could evolve to become an actual source of authoritative and trustworthy advice and expertise, slowly cleaning up the market from all the opportunistic garbage and copycats without any purpose/motive other than naked greed and misleading of newcomers.

Founder and CEO Peter Mitchell describes Flux as being a middle ground between the rather sophisticated Augur and the simplified Guesser, seeing Flux as a net positive for the startups investment space, pointing out the "widely disproportionate" valuations of startups, forcing founders to be more transparent about their products. The Flux white paper is being worked on and will be reviewed some time by the end of the month.

Here's the Flux subreddit and public Discord.