THESIS PROTOCOL — AI-Powered Prediction Markets on Bitcoin L1

The first prediction market with AI oracle resolution and collateralized outcome-token lending, built on Bitcoin L1 via OP_NET.

What Makes Thesis Protocol Different

1. AI Oracle Resolution — Our AI oracle analyzes real-world data to automatically resolve markets when confidence exceeds 80%. Below that threshold, markets enter a bond-based dispute mechanism.

2. Beat the Bot — AI predicts every market. Users compete against AI, building reputation scores and climbing the leaderboard. Can you outpredict artificial intelligence?

3. CPMM AMM on Bitcoin — Constant Product Market Maker (x*y=k) for binary outcomes, enabling continuous price discovery. Buy/sell YES and NO tokens with instant liquidity.

4. Bond-Based Dispute Resolution — Proposer stakes a bond on the outcome. Anyone can dispute with 2x bond within 100 blocks. Economic security without centralized trust.

5. Collateralized Lending — Deposit YES/NO outcome tokens as collateral to borrow tUSDT. On-chain LTV enforcement and interest accrual.

Architecture

┌─────────────────────────────────────────────────────────────┐
│                        FRONTEND                             │
│   React + Vite + TypeScript                                 │
│   Brutalist UI — Syne + DM Mono                             │
│   Pages: Home, Explore, Market Detail, Create,              │
│          Portfolio, Lending, Leaderboard                    │
├─────────────────────────────────────────────────────────────┤
│                        BACKEND                              │
│   hyper-express API + SQLite + Anthropic AI                 │
│   /api/markets, /api/trades, /api/ai, /api/leaderboard      │
├─────────────────────────────────────────────────────────────┤
│                     SMART CONTRACTS                         │
│   ┌───────────────┐  ┌──────────────┐  ┌────────────────┐   │
│   │ PredictionMkt │  │ OutcomeToken │  │ MarketFactory  │   │
│   │ CPMM AMM      │  │ OP20 YES/NO  │  │ Registry       │   │
│   └───────────────┘  └──────────────┘  └────────────────┘   │
│   ┌───────────────┐  ┌──────────────┐  ┌────────────────┐   │
│   │ OracleResolver│  │ Reputation   │  │ LendingPool    │   │
│   │ Bond disputes │  │ Stats/Streak │  │ Collat. Loans  │   │
│   └───────────────┘  └──────────────┘  └────────────────┘   │
├─────────────────────────────────────────────────────────────┤
│                   BITCOIN L1 (OP_NET)                       │
└─────────────────────────────────────────────────────────────┘

Smart Contracts

Contract	Description	WASM Size
PredictionMarket	CPMM AMM — buy/sell outcomes, resolve, redeem	26 KB
OutcomeToken	OP20 token for YES/NO outcomes	35 KB
MarketFactory	Market registry with active/resolved tracking	20 KB
OracleResolver	Bond-based dispute resolution (100-block challenge)	26 KB
ReputationTracker	User prediction stats, streaks, accuracy	23 KB
LendingPool	Collateralized lending with YES/NO tokens	24 KB

CPMM Pricing

YES_reserve × NO_reserve = k (constant)

Buy YES:  newNoRes = noRes + amount; newYesRes = k / newNoRes; tokensOut = yesRes - newYesRes
Buy NO:   newYesRes = yesRes + amount; newNoRes = k / newYesRes; tokensOut = noRes - newNoRes

Price:    yesPrice = noReserve / (yesReserve + noReserve)
          noPrice  = yesReserve / (yesReserve + noReserve)

API Endpoints

Method	Endpoint	Description
GET	/api/markets	List markets (filter: status, category)
GET	/api/markets/:id	Single market details
POST	/api/markets	Create market + get AI prediction
POST	/api/markets/:id/resolve	AI-powered resolution
GET	/api/markets/:id/trades	Trade history
POST	/api/trades	Record a trade
POST	/api/ai/predict	Get AI prediction
GET	/api/leaderboard	Top predictors
GET	/api/users/:addr/portfolio	User positions
GET	/api/users/:addr/lending	User lending positions
GET	/api/stats	Platform statistics
GET	/api/collateral-token	Collateral token info

Quick Start

Prerequisites

• Node.js 22+
• Testnet BTC (get from OP_NET faucet)

1. Smart Contracts

cd contracts
npm install
npm run build          # Builds all 6 WASM contracts
npx tsx deploy.ts      # Deploy singletons to testnet

2. Backend

cd backend
npm install
cp .env.example .env   # Set MNEMONIC and ANTHROPIC_API_KEY
npm run dev            # Starts on :3002

3. Frontend

cd frontend
npm install
npm run dev            # Starts on :5173

Project Structure

thesis-protocol/
├── contracts/
│   ├── src/
│   │   ├── market/PredictionMarket.ts      # CPMM AMM core
│   │   ├── outcome-token/OutcomeToken.ts   # OP20 YES/NO tokens
│   │   ├── factory/MarketFactory.ts        # Market registry
│   │   ├── oracle/OracleResolver.ts        # Bond-based disputes
│   │   ├── reputation/ReputationTracker.ts # User stats
│   │   └── lending/LendingPool.ts          # Collateralized lending
│   ├── build/                              # Compiled WASM
│   ├── abis/                               # Generated ABIs
│   └── deploy.ts                           # Deployment script
├── backend/
│   ├── src/
│   │   ├── index.ts                        # hyper-express server
│   │   ├── routes/                         # API routes
│   │   └── services/                       # Business logic + AI
│   └── data/                               # SQLite database
├── frontend/
│   ├── src/
│   │   ├── pages/                          # React pages
│   │   ├── components/                     # UI components
│   │   ├── hooks/                          # Custom hooks
│   │   ├── context/                        # Provider context
│   │   └── config/                         # ABIs + constants
│   └── dist/                               # Built frontend
├── shared/
│   ├── types.ts                            # Shared TypeScript types
│   └── constants.ts                        # Shared constants
├── AUDIT.md                                # Security audit report
└── README.md                               # This file

Security

See AUDIT.md for the full security audit report.

Key security properties:

• SafeMath on all u256 arithmetic
• CEI pattern (Checks-Effects-Interactions)
• Owner-only access control on admin functions
• No unbounded loops or floating-point math
• Fee cap at 500 basis points (5%)
• Bond-based disputes for oracle resolution trust
• On-chain LTV enforcement for lending positions

Tech Stack

• Contracts: AssemblyScript → WASM (OP_NET btc-runtime)
• Backend: hyper-express + SQLite + Anthropic Claude API
• Frontend: React + Vite + TypeScript
• Blockchain: Bitcoin L1 via OP_NET metaprotocol

Links

• Website: thesisprotocol.org
• Twitter: @prematrkurtcuk
• GitHub: zacnider

License

MIT

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Built on Bitcoin L1 — Everything that ran on ETH and SOL, now on Bitcoin.