On-chain costs Prediction Markets

On-Chain Cost Prediction Markets

Every blockchain operates on a simple economic truth: blockspace is scarce. Each block can only contain a finite number of transactions, forcing users to bid for inclusion through gas prices. This bidding system turns every block into a micro-auction for computationm a constant balancing act between supply and demand.

Despite being the heartbeat of blockchain activity, this market for blockspace has never had its own financial layer. While tokens, yields, and liquidity have all been financialized, the cost of using the network itself has remained unhedged, unpredictable, and opaque. Hedgehog changes that by introducing the world’s first prediction markets for on-chain costs.

A Market Built on Usage, Not Tokens

Hedgehog isolates the variable that defines the blockchain economy, the cost of transacting and interacting with financial instruments, and transforms it into a tradable market primitive. Instead of delivering or renting real blockspace, Hedgehog mirrors it synthetically, tracking only the price behavior of network activity: gas fees, priority fees, funding rates, and incentives.

These data points become predictive markets, where participants can trade expectations about future costs, whether gas will rise or fall, how MEV pressure will evolve, or when congestion will peak. Each position reflects a live view of blockchain demand and the macro conditions driving it. How It Works

Hedgehog’s on-chain cost markets are cash-settled prediction markets designed around live blockchain data. Each market tracks a specific cost variable — for example, average Ethereum gas price over the next 15 minutes, and lets participants trade on whether it will move up or down within that window.

1. Market Creation

• Smart contracts generate markets tied to time-based cost intervals: hourly, daily, or per-block windows.

• Data oracles continuously feed real-time gas prices and block metrics into these contracts.

2. Position Taking

• Traders can go long or short on a given outcome, for example, “gas will exceed 80 gwei in the next 10 blocks.”

• Paymasters or rollups can use these same markets to hedge exposure, buying positions that profit when gas rises (offsetting their real-world expenses).

3. Continuous Pricing

• As new blocks are produced, the market dynamically adjusts prices to reflect the latest gas trends and pending transaction volume.

4. Resolution & Settlement

• When the time window closes, the market references on-chain cost data to determine the actual outcome.

• Winning positions are paid out automatically, while a small trading fee applies only to profitable positions, ensuring fairness and liquidity sustainability.

Through this mechanism, Hedgehog transforms raw blockchain data into a financial heartbeat, every block generates a measurable, tradable signal about the network’s current and expected activity.