Conditional Tokens - Road to Futarchy by Friederike Ernst, Stefan George (Devcon5)
Conditional tokens are a new crypto primitive which in the broadest sense allow for the incorporation of conditions into fungible assets. There are a myriad use cases for these conditional tokens, ranging from conditional payment to synthetic derivatives and event futures. Conditional tokens also elegantly capture the fundamental concept behind prediction markets: Conditional tokens allow tokenization of future events and make their outcomes tradable. We developed a new smart contract framework for conditional tokens which allows seamless combination of conditions for multiple future events. This concept lays the foundation for taking prediction markets beyond the PoC stage by natively allowing (1) markets to show dependencies between events in a scalable manner and (2) showing how the value of a specific asset is impacted by a possible future. Showing these dependencies is one of the core mechanisms used for Futarchy, a governance model reliant on decision markets. In our presentation we will explain the implementation of our framework and how it can be utilized for Futarchy.
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