A new application based on Uniswap V4 Hook, Mirror Market (mirrormarkets.io), has emerged.

This is a new concept: the Conviction Market.

Before introducing it, let's first review another popular application that is very similar to this new concept: prediction markets and its typical case in the crypto ecosystem, Polymarket.

Polymarket has been one of the hottest applications bridging crypto and traditional ecosystems in recent years. It allows users to vote on future events by betting real money. When the outcome of the event is finally revealed, players who bet correctly are rewarded, while those who bet incorrectly lose all their stake.

In the mechanism of Polymarket, there are several key points:

- There must be a final conclusion for every event prediction. This conclusion is objective and provided by an oracle.

- The oracle plays a crucial role, as it determines which outcome ultimately prevails.

- The final settlement for users' bets has a clear time point, which is when the event result is revealed.

- In the application, each initiation of a prediction for a new event requires the initiator/participants to provide seed liquidity. Without liquidity, the initiation of that event cannot succeed.

Now back to the topic of today's article: the Conviction Market, Mirror Market.

As the name suggests, the so-called Conviction Market does not express a prediction of the outcome of an event, but rather expresses confidence in the various different options within an event.

Since it bets on confidence, it is not directly related to actual results. Therefore, in such a market, for two possible outcomes of an event, A and B, the following situation may completely occur:

The final objective result is A, but in the conviction market, B prevails. That is, the public clearly has more confidence in B and believes in B more.

This point has a distinct difference from the first characteristic of Polymarket.

So, this market seems to me more like an application reflecting public opinion using real money.

In current polls, participants are not responsible for the outcomes, and their responses may be swayed by emotions or influenced by the atmosphere, so often the results do not truly reflect public opinion.

For example, in the polls conducted before the last US presidential election, there were surveys showing the following situation:

Many voters participating in the poll actually supported Trump internally, but due to the prevalent political correctness in the US, they were unwilling to express their true thoughts publicly, so they provided answers in the poll that were contrary to their true feelings.

If participants had to put their money where their mouth is, would it somewhat change this situation?

Since this market expresses confidence and does not have a direct relationship with actual results, it does not require an oracle.

This point has a significant difference from the second characteristic of Polymarket.

Additionally, since it is not directly related to actual results, it does not have a clear time point for final settlement. It is a perpetually existing market. Even when the final outcome of the event is revealed, this market still exists, as it continues to express the public opinion of actual participants.

In the Mirror Market, the option that ultimately “loses” will see its funding pool gradually deplete over time. Users holding the “losing” option will be able to recover almost zero of their principal from this pool.

This is the “penalty” that Mirror Market imposes on participants holding the “losing” option.

This point has a significant difference from the third characteristic of Polymarket.

Mirror Market employs a clever liquidity mechanism designed using the Uniswap V4 Hook. In this mechanism, there is no need to provide initial seed liquidity for the market. Anyone who buys any option in the event contributes a piece of liquidity.

This is the innovative point and convenience of the Hook mechanism.

This improves the efficiency of liquidity supply and enhances the convenience of market deployment.

This point has a distinct difference from the fourth characteristic of Polymarket.

This point could even be used to improve Polymarket's current liquidity supply mechanism.

Mirror is the core token of the project, representing the profit-sharing rights enjoyed by holders. In the future, all transaction fees and revenues from each market on the platform will belong to the Mirror token.

This newly emerged “Conviction Market” seems, from the current perspective, not to show much market potential or market value.

However, I remain very optimistic about the emergence of such applications.

I carefully read the document released by the team, and a pure geek vibe hit me.

I really liked this sentence on the official website:

“The most important protocols in DeFi didn't come from product roadmaps. They came from people who asked dangerous questions and shipped the answer before anyone could say no.”

The most important protocols in DeFi do not come from product roadmaps, but from those who ask dangerous questions and provide answers before anyone says “no.”

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