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Are there any technical reasons preventing a decentralized prediction market like Augur from eventually being built on top of Monero?

Besides multisig what other Monero development needs to be completed to more easily facilitate Monero smart contracts and sidechains?

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In the future, yes. Check out the Tari announcement. This, alongside the ongoing work at the Monero Research Lab to bring daughter-chains to Monero, is a big step forwards towards Layer 2 capabilities.

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