USE CASE: local elections in a small town N.
In a small town N. local elections take place ones in four years. Election race started a year and a half before. Every political party tries to convince the electorate that it’s program is the best, and locals become real political experts for this period.
Adam, Scott and all their company of childhood friends like discussing elections and betting on its result. But they never do it officially because only one bookmaker accepted such bets and his odds were so small that no one wanted to bet. The bookmaker knew that he could attract more clients by increasing odds, but he couldn’t afford it. In his business, he faces very high transaction costs and everyday risk of chargebacks, so he needs to insure by keeping odds on the low level.
This year the bookmaker made a cardinal decision to integrate into his business the PROOF OF TOSS protocol. Thanks to that he became insured from chargebacks, and transactional costs decreased dramatically. He offered more beneficial odds, and all local bettors became his clients. It turned out that in the small town N. there are very many people who like betting.
Let’s see how does wager on the local elections look like this year.
Event: Local elections-2019 in N.
Date and time the event starts: 2019, October, 20 at 8:00 a.m. UTC
Wager: Who will take most of votes and will be a leader of a local parliament?
Possible outcomes: The Green party, The Democratic party, The Farmers party.
Odds: 6.5 : 2.5 : 3.0
The Wager is published on the 20th of October, 2018, 10:00 a.m UTC
Betting closes at 8:00 a.m. UTC on 10th of October, 2019
– 3500 participants bet on the winning of The Green party. They place a total of 28 000 TOSS on this outcome.
– 14000 participants bet on the winning of The Democratic party. They place a total of 90 000 TOSS on this outcome.
– 8000 participants bet on the winning of The Farmers party. They place a total of 45 000 TOSS on this outcome.
Total = 163 000 TOSS (BetSum)
In order to ensure all payouts the operator needs to block collateral in the amount of 1 802 780 TOSS
Collateral = Bet sum x (odds-1) + 0.5% x (Bet sum x odds)
Once the event ends, the operator confirms that The Democratic party won the elections.
All participants who placed their bets on the winning of The Democratic party receive prizes equal to Bet * Operator’s odds.
For example, Adam placed 5500 TOSS on the winning of The Democratic party and received 5500 * 2.5 = 13 750 TOSS.
Operator receives the remaining collateral and all bets that lost.
Collateral return = Bet sum for the Incorrect outcomes*(odds -1) + 0.5% (Bet sum)
DISCLAIMER: all cases are taken as examples and have no connection to real people or events
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