Prediction Market

A decentralized demo prediction market project on Sepolia:

• users buy/sell YES/NO shares through an AMM in the smart contract
• market outcomes are resolved by an admin
• the frontend displays live data from a local SQLite database populated by the indexer

Repository Contents

• contracts/ — Solidity contracts and Foundry scripts (deploy/seeding)
• backend/ — TypeScript event indexer from RPC to SQLite
• frontend/ — Next.js 16 UI + API routes reading from SQLite

Additional documentation:

• backend/README.md — backend indexer: env, run, tests, troubleshooting
• frontend/README.md — frontend: env, local run, Docker flow

Architecture

Data flow:

1. The PredictionMarket contract emits events (MarketCreated, SharesBought, SharesSold, MarketResolved, WinningsClaimed).
2. The backend indexes chain events and writes them to SQLite (/data/app.db).
3. The frontend reads aggregated data from the same SQLite via server-side APIs (/api/markets, /api/markets/[id], /api/markets/[id]/activity, /api/markets/[id]/prices, /api/portfolio/[address]).
4. The UI renders markets, details, price chart, activity, and portfolio.

In Docker, both services (frontend, indexer) share the same app-data volume:

• indexer mounts it read-write and writes the database
• frontend mounts it read-only and only reads

Key Components

• contracts/src/PredictionMarket.sol:
  • buy/sell shares
  • resolveMarket (after resolutionTime, admin only)
  • forceResolveMarket (demo path, no time check, admin only)
  • claimWinnings
• backend/src/indexer.ts:
  • backfill + polling new blocks
  • upsert into markets, trades, resolutions, claims, pool_snapshots
• backend/src/snapshot.ts:
  • on-chain pool sync (yesReserve/noReserve/totalCollateral)
• frontend/lib/queries.ts:
  • SQL queries for frontend API routes
• frontend/hooks/*:
  • market data, price history, activity, trading, portfolio

Run Flow (Docker)

1. Create .env from template:

cp .env.example .env

2. Fill in required variables:

• MARKET_ADDRESS
• USDC_ADDRESS
• RPC_URL
• WALLETCONNECT_PROJECT_ID
• PRIVATE_KEY (used by Foundry scripts and demo resolve API by default)
• CONTRACT_DEPLOY_BLOCK (optional; default 10696829)

docker-compose.yml maps canonical variables to NEXT_PUBLIC_* for frontend build/runtime, so values are defined once in root .env.

3. Start the full stack with one command:

docker compose up --build -d

Health Check

docker compose ps
docker compose logs --tail=100 frontend indexer

Expected state:

• frontend — healthy
• indexer — Up
• UI is available at http://localhost:3000
• health endpoint: http://localhost:3000/api/health

Stop

docker compose down

Full cleanup with volume removal (destructive):

docker compose down -v