This is one of the common misconceptions that we hear from crypto enthusiasts who are not familiar with sports betting when we mention that we are building a sports betting platform on the blockchain. Prediction markets are never going to replace sportsbooks. This is in no way trivializing the potential impact of prediction markets or their overall utility; however, we thought it was important to emphasize the many reasons that sports bettors need a blockchain platform tailored specifically to their needs.
Slow Resolution
Bettors want to bet, plain and simple. Once a match is concluded and the result known, bettors want to be able to collect their hard earned winnings and wager on the next hot tip. With fully decentralized approaches, such as that used by peer to peer exchange Wagerr, bettors have to wait for consensus to be reached by a majority of masternodes. Wagerr’s own whitepaper admits that their target time for payouts to occur is 90 minutes. Bettors know that this is an eternity when compared to existing options where funds are available to bet within a few minutes. Prediction markets, such as Gnosis and Augur, are even slower. Even with Gnosis taking a Hybrid Oracle approach utilizing a “Centralized Oracle” that basically uses one trusted data feed, events are not resolved until after a 12 hour dispute period — unacceptable for regular bettors.
Because we’re focused on sports betting specifically, we’re able to employ more resources to ensure that our Hybrid Oracle approach is correct the first time. Our approach utilizes consensus between no less than five preordained trusted data sources, all recorded on the smart contract you submit your bet to at the time you enter your bet. These premium feeds resolve within minutes after an event, and once a consensus is reached the bet smart contract automatically resolves and funds are distributed to bettors. This approach minimizes the likelihood of an error being processed, while still allowing resolution of events to happen within minutes rather than hours under the other proposed systems. In the unlikely case there is an error — we suffer the consequences, not the bettor. Bettors are able to challenge results they feel are incorrect by placing a small stake at risk equivalent to the greater of FansUnite Tokens equivalent to $10 (USD) or 5% of the disputed amount. If they are proven right after a review process, then tokens are awarded to all incorrectly resolved bets from our platform supply pool.
Lack of Options
Bettors want the full spread of markets and betting variety that they are used to. Peer to peer platforms and prediction markets both envision a system where individuals set their own markets, and this may work fine for popular leagues and basic bet types on single events like moneyline, spread and totals bets. Unfortunately for experienced bettors, this is highly unlikely to provide an acceptable selection when it comes to the array of leagues or bet types including multi-event bets that they’re used to. Individuals setting the lines would have to pick the exact combination of games and bet types you want and offer up a line that was agreeable in order to have that bet matched — this is highly unlikely to occur with any type of regularity. Not offering parlays, accumulators, teasers and all the other bet types that punters enjoy is a serious oversight to sports bettors who want the types of action that they are accustomed to.
As we are operating as a full sportsbook, we are able to guarantee a much deeper selection of leagues and a full array of bet types and multi-event accumulators and parlays. We know how important it is to bettors to have an exciting selection of bet types, with operations like 5dimes showing how you can gain market share just by offering more markets and betting options than the competition. Peer to peer operations and prediction markets will surrender bettors in markets that they do not cover, and lose a percentage of serious bettors who want more exotic bet types in the markets that they do cover.
Liquidity
Bettors will take their business where they know they can get their money down. Betfair rose to prominence on the back of its strong liquidity and ease with which bettors had their bets matched, but this liquidity does not come easy. You need deep pockets and a value proposition that directly speaks to seasoned bettors, this is another area we feel has been trivialized by our perceived competition. As cryptocurrency is still finding its footing with the majority of the population, it’s fair to question whether users of prediction markets such as Gnosis and peer to peer exchanges like Wagerr will struggle to have their bets matched. If this is the case, as one would likely expect without a significant pool of bettors initially, then they will also struggle to gain any type of traction with bettors. Without liquidity, they will struggle to offer bets at reasonable prices and a vicious cycle begins to take shape where fewer bettors means fewer bets on offer and a struggle to fill bets at reasonable prices.
This is why we guarantee liquidity, by participating as a traditional sportsbook and facilitating liquidity by taking the other side of all bets. We do this while utilizing machine learning to set lines that include only a 1% margin, besting our competitors pricing while still offering superior liquidity and choice. We guarantee bets are taken exactly as the bettor wants, when they want, with no hassle and the lowest fees.
Closing Thoughts
FansUnite is a platform built by sports bettors for sports bettors, and this knowledge of the space earned through years of operating a virtual sportsbook tailored to bettors is a key differentiator between us and our competitors. We are maintaining the experience of betting that bettors are accustomed to because this is compulsory when trying to win a significant market share of sports bettors — we do this while still facilitating trustless betting and providing bettors with the additional security and transparency afforded by blockchain technology.
Prediction markets have fantastic utility and an array of uses that we have yet to even fully comprehend; however, to blindly surmise that in their current form they will appropriately service the specific needs of sports bettors is misguided. Peer to peer markets have been proven to be a successful and efficient model, but only with extraordinary liquidity — liquidity that is unlikely to exist on a new platform in a nascent space like cryptocurrency.
Our approach is designed from top to bottom with the bettor in mind, with our aim being to provide a product that doesn’t require concessions on the part of the bettor in order to adopt. The concerns surrounding resolution time, selection of markets and liquidity mean that they will struggle to effectively service this segment — and FansUnite will remain a far more appealing option to sports bettors until they do.
