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Offline xxeyes

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Sports Betting DAC based on BitsharesX
« on: October 02, 2014, 10:29:22 PM »

I'll preface by saying that I don't really watch sports or gamble (unless you consider trading cryptocurrencies gambling).  Nonetheless, it occurred to me that a fork of BitsharesX might work as a sports betting DAC.  The only change would be the names of the assets and the marketing.  Each chain would be a professional sports league like the NHL, NBA, NFL, etc. and the "assets" would be each team in the league.  Just as the assets in BitsharesX track the relative value of their non-digital counterparts, the team "assets" of NHLshares for example might be expected to dynamically track an abstract valuation of each team relative to the others.  If marketed accordingly, users should expect team valuations to increase/decrease relative to the others based on how the teams are performing in the league.  Users can buy in and trade valuation between teams throughout the series, realizing profits or losses based on how their team picks do.  It could get quite interesting with high volume trading and dramatic swings in team valuations based on the results of key games.  Furthermore, in this fantasy world with cross chain trading, you could even go long and short on various teems between different sports.

Since the peg is working for bitassets, it seems this could work too based on the same principals.  Such a DAC could be a popular gateway into the Bitshares ecosystem.

I don't have the knowledge/skills to make this project a reality (even though it is just a clone of BitsharesX), I just thought it was simple enough to work and wondered if others think it has potential (or if the idea has already been considered/debated).

Offline Chuckone

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Re: Sports Betting DAC based on BitsharesX
« Reply #1 on: October 02, 2014, 11:00:52 PM »
So basically it would be a sport pool (whichever sport) where you put *dynamic* bets -meaning you can change your "bets" along the way by buying or selling a team asset, and the value of that bet change depending on the valuation of each team, or what the people think the odds are-

Wow, that's interesting!!

You could hold and hope your team win, or trade actively for each game along the way...

But what happens with the assets of each team when the season is done? Would something like the PTS dump after a snapshot would happen, so holding too long on a winning team wouldn't be that good since everybody gets out when the season is done?






Offline xxeyes

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Re: Sports Betting DAC based on BitsharesX
« Reply #2 on: October 02, 2014, 11:10:08 PM »
You're right, sports "pools" is a better term.  Yes, I suspect there would be something akin to the PTS dump after a snapshot when the season ends, then it would slowly build back up in preparation for the next season.  Values would probably peak at some point before the end of the final game in a series, then drop off quickly once the game is decided definitively.  Timing your buys/sells would just be part of the fun, I guess.
« Last Edit: October 02, 2014, 11:23:23 PM by xxeyes »

Offline biophil

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Re: Sports Betting DAC based on BitsharesX
« Reply #3 on: October 10, 2014, 10:33:41 PM »
So basically it would be a sport pool (whichever sport) where you put *dynamic* bets -meaning you can change your "bets" along the way by buying or selling a team asset, and the value of that bet change depending on the valuation of each team, or what the people think the odds are-

Wow, that's interesting!!

You could hold and hope your team win, or trade actively for each game along the way...

But what happens with the assets of each team when the season is done? Would something like the PTS dump after a snapshot would happen, so holding too long on a winning team wouldn't be that good since everybody gets out when the season is done?

I've thought about this some. They ran a World Cup betting pool (Germany really came through for me!) over on NHZ and it got me thinking that you could probably do sports betting pools almost totally autonomously, probably even without feeds (though you'd need to put some thought into preventing manipulation).

So suppose we've got two teams: the Satoshis and the Larimers, and they're competing for the championship. I could go into the Sports Betting DAC and create a betting pool for this championship, which would be composed of two assets: SATOSHI and LARIMER. Unlike an ordinary asset creation, the DAC controls 100% of the shares of these assets, and puts them up for sale on the open market. Bettors come in and buy shares of either SATOSHI or LARIMER, and the DAC puts all the bets in a common pool. If the Larimers win, the DAC pays out the pool proportionally to holders of the LARIMER asset, and since the game is over, all SATOSHIs and LARIMERs vanish because we don't need them any more.

Here is the fun part: The more shares people purchase, the higher the price of the next share goes. There is a lot of design leeway here; I have no idea what the best price growth curve would look like. Would buying a LARIMER increase the price of a SATOSHI? (I think not, but haven't thought through it all the way). Should the price increase be linear? superlinear? Should it have a time-varying component? All good questions. The upshot of letting shares increase in price over time is that there should be a mad rush at the beginning to buy shares since people know they will get more expensive as time goes on.

I said above that this shouldn't require a feed: The trick to this is you never close betting. Betting stays open throughout the game and even afterwards. How will the DAC know which team won? Well, if people bought more LARIMERs than SATOSHIs, then the Larimers must have won. If the pool is large enough, it would take a huge whale to buy so many of the "wrong" team asset that the DAC would conclude it had won. You'd have to design some clever way for the DAC to "know" that it should shut the pool down and make payouts; maybe you could measure average market activity and make payouts when the moving average share transaction volume has dropped below some threshold.


Offline Crashland

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Re: Sports Betting DAC based on BitsharesX
« Reply #4 on: October 12, 2014, 09:17:44 PM »
I have only a limited understanding, but this sounds to me like a possible implementation of the TruthCoin idea. A sportsbook concept is essentially a binary prediction market. Assets can be created, such that instead of being pegged to a real-world commodity, they can be pegged to the likelihood of a certain event occurring. The likelihood of an event occurring has a fixed range, between 0% and 100%.

Looking at TruthCoin though, to me the specifications look way more complicated than it needs to be, with introducing a whole nother 'proof-of-work' CashCoin, and VoteCoins,...etc. I'd like to see if this could be implemented more easily in the bitshares framework with DACs. There are still many considerations and pitfalls to avoid (make sure the right consensus is always reached, and winners can always cash out), but just reading through that TruthCoin whitepaper it seems to me that this could be done much more elegantly.

The DAC of course could reward people for taking positions through transaction fee dividends.

Also because the asset has a fixed range, it would be possible to implement in such a way that holding extra arbitrary collateral would not be required. Long and short positions would have inverse costs. (If a trade agrees on a 0.3 price, then the long trader needs to risk 0.3 of whatever currency and the short trader needs to risk 0.7. Neither the long nor short position would be able to lose more than their original investment.)

This concept of course could be applied to any prediction market, not just sports. Politics are always popular, like a decentralized version of Intrade.
« Last Edit: October 12, 2014, 09:19:45 PM by Crashland »

 

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