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Merge pull request #17 from AztecProtocol/feat/add-basic-prediction-market
feat: add basic prediction market
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‎.github/workflows/prediction-market-tests.yml‎

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name: Prediction Market Tests
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on:
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push:
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branches:
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- main
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pull_request:
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branches:
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- main
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paths:
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- "prediction_market_contract/**"
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- ".github/workflows/prediction-market-tests.yml"
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workflow_dispatch:
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jobs:
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prediction-market-tests:
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name: Prediction Market Tests
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runs-on: ubuntu-latest
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env:
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AZTEC_ENV: sandbox
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AZTEC_VERSION: 3.0.0-devnet.4
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steps:
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- name: Checkout repository
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uses: actions/checkout@v5
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- name: Set up Node.js
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uses: actions/setup-node@v4
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with:
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node-version: "22"
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- name: Setup Bun
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uses: oven-sh/setup-bun@v2
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with:
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bun-version: 1.1.36
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- name: Set up Docker
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uses: docker/setup-buildx-action@v3
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- name: Install Aztec CLI
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run: |
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curl -s https://install.aztec.network > tmp.sh
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NON_INTERACTIVE=1 bash tmp.sh
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rm tmp.sh
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- name: Update path
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run: echo "$HOME/.aztec/bin" >> $GITHUB_PATH
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- name: Set Aztec version and start sandbox
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run: |
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aztec-up ${{ env.AZTEC_VERSION }}
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docker tag aztecprotocol/aztec:${{ env.AZTEC_VERSION }} aztecprotocol/aztec:latest
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aztec start --sandbox &
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- name: Wait for sandbox to be ready
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run: |
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echo "Waiting for sandbox to start..."
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MAX_RETRIES=60
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for i in $(seq 1 $MAX_RETRIES); do
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if curl -s http://localhost:8080/status >/dev/null 2>&1; then
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echo "Sandbox is ready!"
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break
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fi
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if [ $i -eq $MAX_RETRIES ]; then
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echo "Sandbox failed to start after $MAX_RETRIES attempts"
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exit 1
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fi
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echo "Waiting... ($i/$MAX_RETRIES)"
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sleep 2
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done
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- name: Install project dependencies
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working-directory: prediction_market_contract
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run: bun install
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- name: Run Noir unit tests
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working-directory: prediction_market_contract
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run: aztec test
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timeout-minutes: 10
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- name: Compile contract and generate artifacts
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working-directory: prediction_market_contract
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run: |
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aztec-nargo compile
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aztec-postprocess-contract
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aztec codegen target -o artifacts
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- name: Run end-to-end tests
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working-directory: prediction_market_contract
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run: bun test
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timeout-minutes: 15
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- name: Upload test results if failed
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if: failure()
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uses: actions/upload-artifact@v4
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with:
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name: test-logs
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path: |
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prediction_market_contract/tests/**/*.log
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retention-days: 7
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- name: Cleanup
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if: always()
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run: |
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echo "Stopping Aztec sandbox..."
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pkill -f "aztec" || true
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docker stop $(docker ps -q) || true
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docker rm $(docker ps -a -q) || true

‎.gitignore‎

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target
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.DS_Store
3-
ivc
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ivc
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node_modules

‎prediction-market/.gitignore‎

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target/
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artifacts/
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node_modules/
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dist/
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*.log
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.DS_Store

‎prediction-market/Nargo.toml‎

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[package]
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name = "prediction_market_contract"
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authors = [""]
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compiler_version = ">=0.25.0"
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type = "contract"
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[dependencies]
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aztec = { git = "https://github.com/AztecProtocol/aztec-packages/", tag = "v3.0.0-devnet.5", directory = "noir-projects/aztec-nr/aztec" }
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uint_note = { git = "https://github.com/AztecProtocol/aztec-packages/", tag = "v3.0.0-devnet.5", directory = "noir-projects/aztec-nr/uint-note" }

‎prediction-market/README.md‎

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# Prediction Market Contract
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A prediction market implementation on Aztec using a **Constant Sum Market Maker (CSMM)** for binary outcomes with **full identity privacy**.
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## Overview
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This contract allows users to:
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- **Bet on binary outcomes** (YES/NO) **anonymously** - no one knows WHO placed a bet
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- **Hold fully private balances** - collateral and share holdings are all hidden
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- **Experience dynamic pricing** that adjusts based on market sentiment
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- **Get slippage protection** to prevent adverse price movements
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- **Single-transaction betting** using partial notes pattern
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## Privacy Model
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### What's Private
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| Data | Privacy | Notes |
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|------|---------|-------|
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| Bettor identity | **PRIVATE** | Public function doesn't receive sender address |
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| Collateral balances | **PRIVATE** | Stored as private notes (UintNote) |
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| Share balances | **PRIVATE** | Stored as private notes (UintNote) |
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| Your bet (YES/NO) | **PRIVATE** | Hidden via partial notes |
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### What's Public
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| Data | Visibility | Why |
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|------|------------|-----|
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| Price changes | PUBLIC | Necessary for AMM pricing |
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| Trade amounts | PUBLIC | Affects price movement |
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| That someone bought YES/NO | PUBLIC | Observable from price changes |
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### Privacy Architecture
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The contract uses **partial notes** for private betting (like the [AMM contract](https://github.com/AztecProtocol/aztec-packages/tree/master/noir-projects/noir-contracts/contracts/amm_contract)):
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```
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1. buy_outcome() [PRIVATE]
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|
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+-- Consumes private collateral notes
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+-- Creates change note if needed
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+-- Creates partial note commitment (hides owner)
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+-- Enqueues public call WITHOUT sender address
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v
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2. _process_buy() [PUBLIC]
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|
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+-- Calculates shares based on CSMM pricing
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+-- Updates YES/NO supplies (price changes)
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+-- Completes partial note with share amount
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v
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Shares appear in user's private balance (single tx!)
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```
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Key privacy feature: The public `_process_buy()` function **does not receive the sender address**. It only knows WHAT was traded, not WHO traded.
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## Usage
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### Betting Flow (Single Transaction)
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```typescript
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// Deposit collateral privately
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await market.methods.deposit(1000n).send({ from: myAddress }).wait()
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// Buy outcome privately - single transaction!
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await market.methods.buy_outcome(
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true, // is_yes
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500n, // collateral_amount
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900n, // min_shares_out (slippage protection)
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).send({ from: myAddress }).wait()
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// Your shares are immediately in your private balance!
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const myBalance = await market.methods.get_yes_balance(myAddress).simulate({ from: myAddress })
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```
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### Collateral Management (All Private)
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```typescript
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// Deposit collateral (private)
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await market.methods.deposit(1000n).send({ from: myAddress }).wait()
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// Withdraw collateral (private)
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await market.methods.withdraw(500n).send({ from: myAddress }).wait()
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// Check balance (view private notes)
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const balance = await market.methods.get_collateral_balance(myAddress).simulate({ from: myAddress })
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```
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## Development
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### Prerequisites
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```bash
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# Install Aztec tools
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bash -i <(curl -s https://install.aztec.network)
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aztec-up 3.0.0-devnet.5
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# Install dependencies
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yarn install
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```
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### Building
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```bash
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# Compile the contract
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aztec-nargo compile
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# Post-process and generate TypeScript bindings
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aztec-postprocess-contract
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aztec codegen target -o artifacts
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```
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### Testing
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#### Noir Unit Tests
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```bash
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aztec test
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```
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Tests the CSMM pricing functions:
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- Share calculations at various price points
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- Price calculations and invariants
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- Edge cases
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#### End-to-End Tests
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```bash
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# Start Aztec sandbox (in separate terminal)
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aztec start --sandbox
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# Run tests
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yarn test
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```
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Tests the full private betting flow:
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- Contract deployment
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- Private deposit/withdraw
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- Private buy_outcome (single tx with partial notes)
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- Price movements
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- Balance privacy
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## Constant Sum Market Maker (CSMM)
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### Core Invariant
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```
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price_YES + price_NO = 1
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```
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### Pricing Formula
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```
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price_YES = yes_supply / (yes_supply + no_supply)
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shares_out = collateral_in / current_price
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```
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### Example
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```
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Initial: YES=5000, NO=5000, price_YES=50%
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Alice buys 1000 collateral of YES:
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- Shares received: 1000 / 0.50 = 2000 YES
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- New YES supply: 7000
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- New price_YES: 7000 / 12000 = 58.3%
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```

‎prediction-market/jest.config.js‎

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export default {
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testEnvironment: 'node',
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transform: {
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'^.+\\.(t|j)sx?$': ['@swc/jest'],
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'^.+\\.mjs$': ['@swc/jest'],
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},
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extensionsToTreatAsEsm: ['.ts'],
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moduleNameMapper: {
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'^(\\.{1,2}/.*)\\.js$': '$1',
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},
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transformIgnorePatterns: [
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'node_modules/(?!(@aztec|ohash|fake-indexeddb)/)',
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],
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testMatch: ['**/tests/**/*.test.ts'],
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testTimeout: 120000,
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verbose: true,
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};

‎prediction-market/package.json‎

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{
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"name": "prediction_market_contract",
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"type": "module",
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"scripts": {
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"clean": "rm -rf target artifacts",
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"ccc": "aztec-nargo compile && aztec-postprocess-contract && aztec codegen target -o artifacts",
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"test": "jest",
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"test:watch": "jest --watch",
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"test:noir": "aztec test"
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},
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"devDependencies": {
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"@jest/globals": "^29.0.0",
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"@swc/core": "^1.3.0",
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"@swc/jest": "^0.2.0",
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"@types/jest": "^29.0.0",
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"@types/node": "^20.0.0",
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"fake-indexeddb": "^6.2.5",
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"jest": "^29.0.0",
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"tsx": "^4.21.0",
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"typescript": "^5.0.0"
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},
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"peerDependencies": {
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"typescript": "^5.0.0"
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},
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"dependencies": {
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"@aztec/accounts": "3.0.0-devnet.5",
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"@aztec/aztec.js": "3.0.0-devnet.5",
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"@aztec/pxe": "3.0.0-devnet.5",
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"@aztec/test-wallet": "3.0.0-devnet.5"
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}
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}

‎prediction-market/run-tests.sh‎

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#!/bin/bash
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set -e
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echo "=== Prediction Market Contract Tests ==="
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echo ""
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# Check if sandbox is running
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if ! curl -s http://localhost:8080/status >/dev/null 2>&1; then
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echo "Error: Aztec sandbox is not running!"
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echo "Please start it with: aztec start --sandbox"
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exit 1
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fi
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echo "1. Cleaning previous builds..."
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rm -rf target artifacts
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echo ""
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echo "2. Running Noir unit tests..."
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aztec test
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echo ""
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echo "3. Compiling contract..."
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aztec-nargo compile
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echo ""
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echo "4. Post-processing contract..."
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aztec-postprocess-contract
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echo ""
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echo "5. Generating TypeScript bindings..."
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aztec codegen target -o artifacts
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echo ""
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echo "6. Installing dependencies..."
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bun install
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echo ""
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echo "7. Running end-to-end tests..."
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bun test
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echo ""
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echo "=== All tests passed! ==="

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