Getting Started on Catnip
This tutorial assumes that you have never used a decentralized app. As you’ll see, the experience is not so different from using any web app. You will just need a standard browser like Firefox or Chrome and a browser extension.
What is catnip?
catnip is a new prediction market site. It’s built with crypto tech but unlike other crypto apps, it’s simple to use and trading is done with a stable coin instead of a volatile cryptocurrency.
catnip is built on top of Augur, a decentralized prediction market platform that runs on Ethereum. catnip is a community powered and open source project. For more context on Ethereum and Augur, see this.
What are the benefits of catnip?
No limits - trade as much as you want!
Zero fees on profit, zero withdrawal fees, and very low transaction fees
Fully non-custodial - you are never trusting anyone else with your funds
Trading can never be halted
How does catnip trading work?
On catnip, you trade using DAI, a digital currency that tracks the US dollar. One DAI equals ~one dollar.
catnip is starting off with just one market that asks “Will Trump win the 2020 U.S. Presidential Election?”
catnip lets you use DAI to buy YES shares also called yTrump tokens or NO shares, called nTrump tokens. You can also trade yTrump for nTrump or vice-versa.
If Trump wins, each yTrump token will be redeemable for 1 DAI (1 USD) while each nTrump will pay out nothing. If Trump does *not* win, each nTrump will be redeemable for 1 DAI (1 USD) while yTrump tokens will pay out nothing.
Under the hood, catnip uses an automated market maker. This means that prices are automatically adjusted, based on supply and demand.
Your first trade…
1. Get DAI and ETH
To trade on catnip, you’ll need DAI and a little ETH, which is used to pay “gas” costs (processing fees) for any transactions on the Ethereum network. Gas costs fluctuate, but lately catnip trades have averaged around 1-2 dollars each.
You can buy DAI and ETH via an exchange like Coinbase or Gemini. Once you have obtained your funds you can move to step 2…
2. Install Metamask browser extension
Metamask basically enhances your browser so that it can speak the Ethereum language. It also serves as a wallet for your funds on Ethereum.
a. Download metamask here.
b. Once installed, click on the fox icon at the right of your address bar. This will open the Metamask flow for creating a new wallet. Follow the steps, and don’t forget to back up your seed phrase in a safe way as it suggests.
3. Transfer ETH and DAI to Your Metamask Wallet
Back on the exchange where you bought your DAI and ETH, withdraw your funds, pasting in your Metamask as the destination address.
You can copy your Metamask address like this:
Note: this will require two separate withdrawal transactions, one for DAI and one for ETH.
4. Connect to catnip
Now, go on catnip.exchange.
Click the blue “Connect Wallet” button. This lets your metamask account interact with catnip.
5. Select outcome and amount to trade
Select which outcome you’d like to buy, yTrump (YES) or nTrump (NO) and plug in how much DAI worth of shares you’d like to purchase.
You’ll see the price per share at the bottom. The more shares you buy, the higher the price per share will be.
This price also signals the implied odds. So if yTrump is trading at .4 that signals ~40% odds of him winning, while if nTrump is trading at .6, that signals 60% odds of him *not* winning.
6. Approve trading
Click the “Swap” button.
If you’re doing this for the first time, Metamask will open asking you to allow catnip to spend your nTrump or yTrump (if it doesn’t open, just click on the fox icon).
This simply means that because you are in full custody of your funds, you have to approve the transfer of your holdings by catnip.
All transactions on Ethereum require a network fee to process, also called “gas,” paid in ETH, the currency of the Ethereum network. Metamask will display the maximum gas cost you will pay. You’ll already have ETH in your wallet from us to cover this and other transactions, so you should be good to go.
Click “Confirm” and wait for the transaction to be confirmed by the Ethereum network. This can take anywhere from a few seconds to minutes, but generally no more than a few minutes. If need be, you can speed up the transaction by paying more gas.
Once the transaction is confirmed, you’ll see a confirmation in the top right of the screen.
7. Make the trade!
Click “Swap” a second time. Now Metamask will pop open — if it doesn’t just click on the metamask icon.
You’ll see something like this:
Click the “Confirm” button, and wait for the transaction to process.
Once your transaction is confirmed, your balances will update.
You’ve now made your first trade on catnip, congrats!
Market Settlement
Once the market settles, holders of winning shares may redeem their winnings on catnip by clicking a “Redeem DAI” button to submit a transaction to claim DAI.
The market doesn’t settle until after January 22nd, but as soon as the outcome is known, traders will likely be able to sell presumptive winning shares for close to one DAI each either directly on catnip or on a market linked to from catnip.
More questions?
For any questions or to join the catnip community, feel free to jump on our Discord.