The Parlay AMM is open for Liquidity Provisioning
THALES stakers have another opportunity to LP by providing collateral to the Parlay AMM!
Ever since Overtime has opened up the Sports AMM for Liquidity provisioning on Optimism and Arbitrum, THALES stakers have swarmed to overtimemarkets.xyz to get in on the action. Traders are seeing a huge APR by providing collateral for the Sports AMM that is used to back trades on Overtime’s individual sports markets. This success means it’s time for another opportunity for stakers by enabling the Parlay AMM for Liquidity Provisioning.
In conjunction with the release of the Parlay AMM, we’re ecstatic to announce a hike in the maximum quote for a parlay ticket from 50x to a whopping 69x! But the excitement doesn’t stop there. Overtime is also upping the ante on the Parlay leaderboard rewards by a staggering 150%, allowing the top 10 Parlays on both chains to rake in even more OP & ARB. This is live now and will carry over into the next round as well.
In the spirit of celebration, we’re also thrilled to announce the launch of a social campaign alongside this release. We invite our loyal users, followers, and newcomers to join the hype on Twitter. The campaign, powered by Postmint, is designed to reward the best performing social media accounts with $ARB tokens and is starting tomorrow. Let’s spread the word together, make some noise, and who knows — you might be one of our winners!
You can thank TIP-142 for allowing THALES stakers on both Optimism and Arbitrum to begin contributing collateral (sUSD on Optimism and USDC on Arbitrum) to Overtime’s Parlay AMM. If you haven’t started staking yet, then this is one more reason to get to it!
A Quick Breakdown of Overtime’s LP Mechanics
We’ve already broken down the details of providing liquidity for the Thales AMM here and for Overtime’s Sports AMM here, but here’s quick summary if you need a refresher:
What is Liquidity Provisioning?
Many protocols, including Thales and Overtime Markets, require capital to act as a market maker for users. It can be difficult to acquire and maintain enough capital to ensure coverage for all trades on a platform, so protocols allow users to deposit their funds (in the form of stablecoins) in exchange for a share in trading fees. This is known as Liquidity Provisioning (LP-ing).
Traditionally LP-ing has been done for asset trading platforms such as Uniswap where users deposit equal parts of two different assets. These funds are subject to impermanent loss due to fluctionations in the price of the paired assets, making the act of LP-ing sometimes difficult to manage and predict. But with Overtime’s focus on sports markets instead of asset trading, providing liquidity to the Sports AMM and Parlay AMM is a totally different ballgame.
How does it work for the Sports AMM vs the Parlay AMM?
In the case of Overtime, funds deposited into the Sports AMM for liquidity provisioning are used to cover positions bought for individual sports markets so that successful traders can claim their winnings. This has been incredibly beneficial for depositors as you can effectivity become “the house” and gain exposure to the more consistent performance that come with market making for sports positioning.
Collateral deposited by users is added to the liquidity pool and is used by the Sports AMM to mint outcome tokens and deposit USD into individual game market smart contracts. By allowing user funds into the liquidity pool, Overtime creates even deeper on-demand liquidity for traders.
You can check out TIP-99 for the details, and view the stats for Overtime’s Sports AMM on our Dune Dashboard here.
Providing Liquidity for the Parlay AMM
The Sports AMM and Parlay AMM do similar jobs in different ways. With the introduction of Parlay AMM LP-ing, traders now have access to an even juicer proposition as parlay tickets stack many singles positions into one. Finally a way to profit from all those losing Parlays!
Once a trader creates and purchases a parlay, the Parlay AMM then calculates the total payout amount using individual odds from each position. It then hedges by creating a personal collateral pool which is equal to the total payout for the user’s collection of positions and uses it to purchase outcome tokens for the inverse implied probability of these positions.
For example, if I create a parlay with a HOME win for the Astros vs. Dodgers game, as well as AWAY win for the Bayern Munich vs. FC Augsburg match, then the Parlay AMM will purchase AWAY tokens for the Astros/Dodgers game, as well as DRAW and HOME tokens (since soccer matches can include DRAW outcomes) for the Bayern/Augsburg match. This way, as long as the trader doesn’t win every leg of a parlay the Parlay AMM is favored to make a profit.
How to provide liquidity for the Parlay AMM
The process of providing liquidity is the same for Parlay AMM as it is for the Sports AMM. You can find all the steps to provide liquidity in Overtime’s Documentation (https://docs.overtimemarkets.xyz/overtime-market-guide/providing-liquidity-for-the-sports-amm), with the following three main points to consider:
Allowance is based on staked THALES
- The amount you can deposit is based on the THALES you have staked. The “thalesstakedmultiplier” is currently at 0.2, so for every 5 THALES you’ve staked you can deposit 1 USD.
- Staking allowance is specific to each chain, so staked THALES on Optimism don’t impact your allowance on Arbitrum, and vice versa.
Weekly Rounds
- User deposited USD will be used to collateralize the Parlay AMM on a 7-day round basis.
- When a round ends the Parlay AMM’s performance from all markets in that round is summed up, and profits are allocated to all liquidity providers proportional to their share of the pool.
Deposit and withdrawal mechanics
- Participants can deposit at any time during a 7-day round, with funds utilized starting with the next round from the time of depositing.
- Funds roll over to the next round automatically until a withdrawal is signaled. Participants can signal a withdrawal at any time during a round.
- The funds that are signaled for withdrawal will be unlocked at the start of the next round from the time of signaling.
- The maximum amount that can be deposited into the Parlay AMM is 200,000 sUSD on Optimism and 200,000 USDC on Arbitrum, with a maximum of 100 users allowed per chain. The pDAO can increase these limits as caps gets closer to being filled.
Conclusion and Disclaimer
It’s important to remember that providing liquidity exposes you to various risks including potential losses due to users winning against the Parlay AMM on any given round, as well as smart contract security risks. Also be aware that the past performance of the AMM cannot predict future performance. Make sure you understand all the risks before depositing.
The launch of our social media campaign perfectly aligns with the excitement brewing, offering a unique opportunity for our community to get rewarded in a fun and interactive way. With the increase in the max quote from 50x to 69x and the parlay rewards amplified by 150%, the Postmint campaign couldn’t have kicked off at a better time! We are eager to see your imaginative posts and impressive parlay flex cards!
Continuing to champion the spirit of innovation, Thales protocol and Overtime persist in fostering a dynamic and creative environment. We’re dedicated to ensuring that decentralized finance and open markets are globally accessible and transparent. For any inquiries or if you wish to engage with our thriving community, please join the Thales Discord.
Relevant links:
👉 Overtime’s AMM liquidity providing documentation
👉 Overtime’s liquidity-providing page
About Overtime
Overtime is the first fully decentralized sports platform. Overtime allows users to trade seamlessly with our Sports AMM and Parlay AMM so there is always a position to be taken on your favorite games. Born out of Thales protocol, Overtime keeps pushing the mission of gamifying DeFi by bringing real-life sport events to the blockchain.
Follow us, join our community, and start playing now!
Website : https://overtimemarkets.xyz/#/
Discord: https://discord.gg/thales
Twitter: https://twitter.com/OvertimeMarkets
Documentation: https://docs.overtimemarkets.xyz
