BTC / USD contracts are cryptoderivatives designed to track Bitcoin's price. Each BTC / USD contract has an expiration date and two share tokens—one LONG share and one SHORT share. The contract is denominated in ETH, and together each set of LONG and SHORT shares is worth 1 ETH.
Veil uses Augur, a popular prediction market and forecasting protocol built on Ethereum, to represent and settle BTC / USD contracts. Specifically, each BTC / USD contract is an Augur scalar market, meaning that the payout distribution between LONG and SHORT shares is not winner-take-all like many prediction markets.
BTC / USD contracts expire at 5pm PT each Friday. When they expire, holders of LONG shares and holders of SHORT shares can exchange their shares for a portion of the ETH escrowed in the contract. The allocation for each type of share is based on the final Bitcoin price and the bounds of the contract. See below for examples using this scheme.
Here is an example BTC / USD contract. Adjust the bounds and final BTC price value and see how the payout changes.
Augur-based BTC / USD contracts are experimental products. If you have further questions or feedback about these contracts or Veil's trading platform, don't hesitate to reach out to our team on Twitter at @veil or via email at email@example.com.