BTC-Denominated, BTC-Settled Markets for Verifiable Cryptographic Outcomes
A Bitcoin-only prediction market protocol where markets resolve on the future state of cryptographic "capsules" anchored to Bitcoin. The system enables:
- Auditable markets without disclosure (capsules expose public keys, keep private keys encrypted)
- Deterministic resolution via machine-checkable predicates over Bitcoin-observable facts
- Decentralized attestation through threshold Schnorr signatures from bonded witnesses
- BTC-only settlement using Taproot escrow and payout paths
No smart-contract platforms. No stablecoins. No external oracles.
| Documentation | Description |
|---|---|
| Protocol Specification | Full protocol documentation |
| Design Review | Open questions and technical analysis |
| Original Paper | Canonical protocol specification |
| Changelog | Version history |
| Contributing | How to contribute |
┌─────────────────────────────────────────────────────────────────────┐
│ BITCOIN BLOCKCHAIN │
│ OP_RETURN Anchors │ Taproot Escrows │ Witness Bonds │
└─────────────────────────────────────────────────────────────────────┘
│
▼
┌─────────────────────────────────────────────────────────────────────┐
│ PROTOCOL LAYER │
│ Capsules ──── Markets ──── Predicates ──── Witnesses │
└─────────────────────────────────────────────────────────────────────┘
| Component | Purpose | Documentation |
|---|---|---|
| Capsules | Cryptographic containers with verifiable key origin | Spec |
| Bitcoin Anchoring | OP_RETURN commitments for timestamping | Spec |
| Markets | YES/NO bets on capsule state predicates | Spec |
| Escrow System | Taproot-based conditional payouts | Spec |
| Witness Network | Decentralized oracle with threshold signing | Spec |
Current Phase: Research & Specification
| Milestone | Status |
|---|---|
| Protocol specification | In Progress |
| Design review | In Progress |
| Reference implementation | Not Started |
| Testnet deployment | Not Started |
| Security audit | Not Started |
| Mainnet | Not Started |
Five critical questions require resolution before implementation:
- Q1: ZK Genesis Proof Trust Boundary - How do we verify proofs came from constrained environments?
- Q2: Witness Economic Model - What incentivizes witness participation?
- Q3: UTXO Stability - How do we handle reorgs affecting escrow deposits?
- Q4: Winner Identification - Critical MVP blocker - How do we track who staked what?
- Q5: Information Asymmetry - How do we prevent capsule holders from manipulating outcomes?
See Resolution Tracker for current status.
| Repository | Description |
|---|---|
| mcp-memvid-state-service | Memvid state service MCP |
| mcp-predictive-market | Predictive market MCP |
| mcp-bitcoin-cli | Bitcoin CLI MCP |
- Read the Protocol Overview
- Review Open Questions
- Open a Discussion to propose solutions
- Read the full Specification
- Review Security Analysis
- Check Implementation Checklist
- Review Trust Model
- Examine Attack Cost Analysis
- Check Open Questions for known gaps
See CONTRIBUTING.md for guidelines.
Ways to contribute:
- Propose solutions to open design questions
- Improve specification clarity
- Add test vectors
- Review for security issues
- Build reference implementations
MIT License - See LICENSE for details.
Built on Bitcoin. Inspired by the need for trustless, BTC-native prediction markets.