Idea for determining the tracking price in a decentralized futures market

[pythonista]

As I understand it, both Mastercoin and Bitshares aim to support builtin trading on the price of other assets such as stocks, currencies, bitcoin etc. They take different approaches to solving the problem of tracking the asset's price and encoding it into their blockchains. Mastercoin will rely on trusted feeds, whilst Bitshares says that the true price is implicit in the difference between the ask & bid price give by the traders.

Both methods have their problems - Mastercoin's trusted feeds can be corrupted, precisely because the system is not truly decentralized. Bitshares' system is open to price manipulation by the traders.

Some people have suggested a voting system that allows users to vote on what the tracking/outcome price is, but havent solved the problem of how to make sure the voters truthfully give the real asset price. Here is my solution to this problem, and I hope it is useful to both the different teams. The solution is to incentive voters to vote truthfully.

For a prediction market, before trading can take place a market needs to be opened, which requires users spending at least N coins to confirm a proposed market statement idea. This is analogous to "crowdfunding" a market idea, and maintains the quality of market statements.

Miners can encode a vote for the outcome price/result inside their mined block. The market will be closed/resolved when at least N blocks have been mined that included a vote for that market's outcome. Casting a vote inside a mined block puts at risk 1 coin, and when all N votes are cast the miner will receive his "vote coin" back plus a share of the initial N coins spent to create the market. This happens as long as the miner's vote was in the majority when the votes are counted up. If a miner's vote was in the minority (because he made a false vote), then he loses his initial vote coin as well as any other rewards from making that block.

The benefit of miners casting the votes for the market outcome/price is that you can't be sure who will find the block and therefore cast the vote, so you don't know who to bribe to cast a false vote in order to manipulate the market. Each individual voter can only assume that everyone else will act rationally and vote truthfully, so he will be inclined to do the same.

I hope this idea is useful - I want to see decentralized trading on the price of other assets using crypto as soon as possible.

Does anyone have any comments?