FutarFi

FutarFi is a futarchy-inspired prediction market platform built on the Hedera EVM network. It allows users to create and participate in markets that predict the outcome of proposals or performance metrics. Participants purchase tokens representing their stance in a market. At the end of the market, the outcome is evaluated against predefined criteria. The winning side receives rewards proportional to their positions, while the losing side can claim tokens proportional to the market treasury, ensuring fair distribution and maintaining liquidity.

FutarFi combines Dutch auctions to fairly seed liquidity, order book trading for continuous and transparent price discovery, and verifiable price oracles (Pyth) to provide reliable reference values. By tying financial incentives to accurate predictions, FutarFi promotes data-driven, economically rational decision-making rather than subjective voting, creating a transparent and measurable governance framework for decentralized systems.

FutarFi is built on Hedera EVM using Solidity smart contracts deployed with Foundry. The frontend uses Next.js with Viem and Wagmi to interact with smart contracts, manage auctions, handle orders, and process claims. The backend is implemented as a Trusted Execution Environment (TEE), which securely tracks market states, executes resolution logic off-chain, and triggers on-chain settlements.

Markets start with a Dutch auction to seed liquidity, followed by an order book allowing continuous trading of market tokens. The Pyth oracle is queried at market creation to provide an objective initial reference price. Each market issues unique tokens representing positions, which remain fully isolated from other markets to prevent reward dilution and maintain predictable risk. Upon market resolution, the TEE determines the winning side by comparing performance metrics against the initial reference. The winner purchases OPTIONS tokens, which are distributed proportionally to the holders of the winning market, while the losing side retains the ability to claim tokens proportionally from the market treasury, ensuring equitable capital distribution.

The system is fully EVM-compatible, allowing standard Ethereum tooling and composable DeFi integrations. By combining secure off-chain computation (TEE), verifiable on-chain settlement, and market-driven incentives, FutarFi achieves a tamper-proof, transparent, and economically rational governance mechanism.