FansUnite: The Protocol for Betting ERC20 Tokens
In the sports betting industry, where bettors are primarily concerned with competitive pricing and having their transactions safely processed, trust is paramount. These user concerns have led to a gradual consolidation of betting transaction volume with a few established operators. These operators are able to leverage their disproportionate share of market information to efficiently price markets and further entrench their position as market leaders. This consolidation has several negative consequences for consumers, including reduced choice for bettors, discouraged new market entrants and stifled innovation.
Blockchains are able to facilitate trust in financial transactions between arms length parties. The advent of smart contracts made it simple to hold funds from various parties in escrow and disburse them programmatically based on a given outcome. These developments will soon transition the gaming industry from trust in operators to trust in the programmatic execution of code; however, one chief obstacle remains in the way of a disintermediated sports betting solution on Ethereum — the handling of real-world information.
The Ethereum Virtual Machine (EVM) is effectively a walled garden; a closed ecosystem in which all operations are controlled by the ecosystem operator, with no access to external data. Smart contracts have no ability to access information from the outside world without the use of trusted intermediaries known as Oracles. This represents a significant hurdle to decentralized applications (DApps) in sports betting, as sporting event data must somehow be ported on-chain.
Numerous DApps have attempted to create sports betting tokens on Ethereum, but none have provided a solution that successfully disintermediate sports betting from relying on centralized external data providers or balances access to market information. These projects all propose proprietary and application-specific implementations that fragment network effects and duplicate developer efforts. These platforms each independently post event and market information to the Ethereum blockchain, resulting in a large duplication of similar requests that clogs the network.
FansUnite solves these observed deficiencies with a free and token-agnostic protocol for decentralized sports betting. We propose a solution that allows for applications to utilize and accept bets in their own currencies, while still leveraging a public library of smart contracts, standardized data structures, and a network of independently operated oracles incentivized to provide low-latency sports data. Furthermore, we achieve an efficient marketplace by providing developer tools to aggregate market information of all DApps on the protocol. The protocol provides equal access to market information and encourages competitive pricing amongst operators. As such, the protocol encourages new market entrants who are better able to predict markets and offer lower fees. This protocol is a necessary step towards unifying developer efforts behind a community governed and disintermediated sports betting solution on the Ethereum blockchain.
