Crowdpark is an impressive, well-designed prediction market game that’s already attracted 500,000 monthly active users on Facebook, the 11th fastest growing Facebook app in April.
It’s a dynamic betting game with an automated market maker, not unlike Inkling Markets in functionality (or even Predictalot minus the combinatorial aspect). What stands out is the flashy UI, both literally and figuratively. The look is polished, slick, refreshing, and richly drawn. It’s also cutesy, animation-happy, and slow to load. Like I said, Flash-y in every way. The game is well integrated into Facebook and nicely incorporates trophies and other social rewards. Clearly a lot of thought and care went into the design: on balance I think it came out great.
Crowdpark is a German company with an office in San Francisco. In addition to their Facebook game, they have German and English web versions of their game, and white-label arrangements with gaming companies. They launched in English just last December.
Crowdpark’s stunning growth contrasts with decidedly more mixed results on this side of the Atlantic. I wonder how much of Crowdpark’s success can be attributed to their German roots, their product, their marketing, or other factors?
Crowdpark has an automated market maker they call “dynamic betting” that I can’t find any technical details about [1]. Here’s their well-produced video explanation:
They say it’s “patent pending”, though my colleague Mohammad Mahdian did some nice reverse engineering to show that, at least in their Facebook game, they’re almost certainly using good-old LMSR. Here is a graph of Crowdpark’s market maker price curve for a bet priced at 1%:
Here is the raw data and the fit to LMSR with b=20,000.
| risk | to win (CP) | to win (LMSR) |
| 1 | 91 | 91.079482 |
| 2 | 181 | 181.750593 |
| 5 | 451 | 451.350116 |
| 10 | 892 | 892.847929 |
| 20 | 1747 | 1747.952974 |
| 50 | 4115 | 4115.841760 |
| 100 | 7535 | 7535.378665 |
| 200 | 13019 | 13019.699483 |
| 500 | 23944 | 23944.330406 |
| 600 | 26594 | 26594.687310 |
| 700 | 28945 | 28945.633048 |
| 800 | 31059 | 31059.076097 |
| 900 | 32979 | 32979.512576 |
| 1000 | 34740 | 34740.000000 |
Still, there’s a quote buried in the video at 0:55 that caught my attention: “you’re current profit is determined by the fluctuation of the odds”.
There’s only one market maker that I know of where the profit fluctuates with the odds, and that’s my own dynamic parimutuel market, which by coincidence recently went from patent pending to inventor cube delivered. 🙂
With every other market maker, indeed almost every prediction market, the profit is fixed at the time of the bet. Add to that the fact that Crowdpark bought a majority stake in Florida horse racing circuit Saratoga Racing Inc. and plans to operate all bets exclusively through their system, leads me to wonder if they may have some kind of parimutuel variant, the only style of betting that is legal in the US.
Of course, it may be that I simply misinterpreted the video.
[1] The technical exec at Crowdpark seems to be Aleksandar Ivanov. I found a trade press paper on (internal) prediction markets he wrote in 2009 for the Journal of Business Forecasting.