Decentralized sports betting is primed to take hold thanks to the explosion of blockchain adoption, layer 2 fee reduction, and the obvious advantages of a blockchain sports betting platform.
In this article we will discuss why sports betting makes more sense on a transparent peer to peer blockchain and which companies already have platforms that you can use to bet on sports games today.
What is decentralized sports betting?
Decentralized sports betting is built through a series of smart contracts that facilitate market makers and peer to peer betting transactions. Furthermore, they utilize oracles to bring sports data on chain in real time so that they can autonomously make payments to winners. Now in laymens terms.
With decentralized sports betting you don’t have to rely on a bookie to hold your money and make payouts. Instead, coders have built little escrow contracts that can hold people’s money, find out who wins the game, and automatically pay out the winners.
These contracts live on a blockchain so they are transparent and auditable. They are also cheaper to run than a traditional bookie, so they should be able to cut down on the spread normally given to a bookie, thus making it cheaper for all parties.
There are different ways to set up a decentralized sports betting platform, however a common way of doing this is through a paramutuel betting system, or a prediction market.
This share based system allows users to make the odds and anyone to add liquidity to a market.
Let’s take a look at how this works with a real world example that you can use today to bet on sports games.
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Overtime Markets xyz – Positional Sports Betting on Optimism Blockchain
Overtimesports.xyz is a positional sports betting platform that runs on Optimism. It is built by the Thales team which also runs Thalesmarket.io.
Overtimesports.xyz is a positional sports betting market. That means you buy shares in one of the teams playing. Shares are priced between .01-.99 cents. Once the market is resolved (ie: the game is over) the winning shares pay out at a dollar.
Let’s look at an example:
This is a screenshot of a market for the San Francisco Giants vs the Pittsburgh Pirates. San Francisco is favored because to “buy them as the winners” it costs $.74 when to buy the giants it costs .30. So when the game ends if the Giants win, the user that bought 25 shares of the giants at .74 cents each ($18.424) will have those 25 shares automatically close out at $1. So they’ll get $25, a profit of $6.58.
If you chose the underdogs, your earnings would be higher. You would have paid .30 per share. So 25 shares cost you, $7.50. If the Pirates win, they too close out at $1, meaning you would win 25-7 = $18.
The difference in share price is set by market demand. If I were to buy a lot of SF shares, that would signal to the protocol that there is more confidence in the Giants and thus skew the price of a Giants share up. This price skewing makes the Giants less desirable because there is less profit to be made for each winning share.
It’s kind of like Market based odds.
Note: .74 + .30 =1.04, I’m assuming that 4% is where the platform and liquidity provider make their $.
How To Bet on Sports using the Blockchain with Overtimemarkets.xyz
If you’re reading this, I’m going to assume some level of blockchain proficiency and gloss over the basics.
The first thing you have to do is buy some Ethereum, perhaps using coinbase, send that crypto to your metamask or other custodial wallet. Bridge the funds from Ethereum to Optimism.
Once on Optimism, you can use sUSD, DAI, USDC or USDC to place bets.
Connect your wallet to the Overtime dapp. Browser by sport and date. Choose a game, pick the side you want and buy the shares.
Decentralized sports betting platforms can scrape information from an oracle. So the bet settles at the end of the game and your winning stable coins are available to claim.
Built On Thales
Thalesmarket.io, and the Thales token, are the team behind overtimemarkets.xyz. They also have thalesmarket.io where you bet Up or Down on the price of a coin
Example: will ETH be over 2500 on September 30. Up = yes Down = no. You buy shares in what you think. Shares will be priced accordingly, and if you are correct the shares pay out to $1.
The team has crafted some easy to use websites with beautiful front ends. I’ll be watching them and I’m excited to see where overtimemarketz.xyz and thalesmarkets.io end up.
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Decentralized Sports Betting Conclusion
Blockchain and smart contracts have the ability to make sports betting transparent, autonomous and cheaper. Already there are some excellent crypto sports betting platforms like overtimemarkets.io .
Be safe out there. As always, don’t bet what you can’t afford to lose and always check with your local regulations before placing any bets to make sure it is legal in your area. (None of this is financial, legal, or tax advice.)
Thanks for reading!