Traditional prediction markets where traders bet on the outcomes of real-world events like a sports game, weather, economic trends etcetera, are heavily centralized and have multiple middlemen involved during the trading process.
Zodiac being entirely based on smart contracts residing on Tezos blockchain, cuts out the middlemen and makes the process entirely decentralized.
A standard prediction market order book is implemented using the smart contracts, which ensures that orders get matched appropriately and traders can withdraw the funds from their unmatched orders.
Prediction markets have been explored on other blockchains like Ethereum, but Tezos adds in several security features that make this prediction market platform safer, which is essential when funds are being locked up in a blockchain and multiple withdrawal streams are in function.
Challenges we ran into
Designing smart contracts was the main hurdle. We had to ensure the security of the locked-up funds and allow safe withdrawal of payouts.