By using the same Thales AMM architecture detailed in the Origins of Overtime page and adapting it to mutually exclusive outcomes of Home Win, Away Win and Draw that are priced by live on-chain odds feed from Chainlink and also fully collateralized with USD, Overtime Markets is able to provide the worlds first permissionless, decentralized and fully on-chain Sports Markets AMM!
How does the Sports AMM works?
The workflow of the Sports AMM is divided in three parts:
- Market creation - Each Sports Market (single market per game) is a dedicated Positional Market smart contract
- AMM trading - The Sports AMM contract offers on-demand liquidity of tokenized HOME, AWAY and DRAW positions across all games
- Market resolution - The Sports AMM contracts allow traders with winning positional tokens to exchange them for USD
Positions on Overtime for soccer/football matches are only for regular time (90 minutes + additional time). Playoff or knockout games that are tied at the end of regular time and go to extra time/penalty shoot-out will result in a draw (X).
So if you purchase a HOME position for a soccer/football match that goes to extra time, the winning position for that market is DRAW, even if the HOME team ends up winning the match during extra time.
This is the starting phase when markets are created from games offered by the Chainlink end-point. The games are organized in
sportIdswhich represent league competitions of given sports, not only the sport in general. The current list of supported leagues include:
- NCAA Men's Football (American football)
- NFL (American football)
- MLB (Baseball)
- NBA (Basketball)
- NCAA Men's Basketball
- NHL (Hockey)
- WNBA (Basketball)
- MLS (Soccer)
- EPL (Soccer)
- Ligue 1 (Soccer)
- Bundesliga (Soccer)
- La Liga (Soccer)
- Serie A (Soccer)
- UEFA Champions League (Soccer)
- Formula 1 (Motorsports)
- FIFA World Cup (Soccer)
- ATP Tennis (Tennis)
- CSGO (eSports)
- Indian Premier League (Cricket)
- EuroLeague (Basketball)
- T20 Blast (Cricket)
- PGA Tour (Golf)
Market creation starts by fetching games for each
sportIdeach day from the end-point. The fetched games are stored on-chain and then the market's contracts are created from every fetched game. Each game is a dedicated positional market smart contract with two or three available positions depending on the possible outcomes of the sport in question.
The Thales Protocol DAO reserves the right to enable trading for various sports one by one as the product matures and becomes more battle tested.
Each Sports Market is open for trading immediately after it is created with the Sports AMM contract offering on-demand liquidity. This liquidity is open for trading up until the moment the game in question starts. At that moment, the AMM stops offering liquidity for that market.
The Sports AMM supports each market by offering the following tokenized ERC20 positions:
AWAYtokens - for two-outcome positional markets (e.g. basketball)
DRAWtokens - for three-outcome positional markets (e.g. soccer)
For Formula 1 Head-to-Head matchups, one driver is defined as the
HOMEteam and the other is the
Each tokenized position is priced by using the on-chain Chainlink odds feed fetched from robust bookmaker APIs. Additionally, there is also a pricing premium on top called Skew Impact that serves as an incentive to keep the AMM liquidity balanced between all positions. The Skew Impact makes "overbought" Positional Tokens from a certain market more expensive, keeping the AMM in balance and unexposed to market exposure risk.
Since the odds of a certain result range between 0% and 100%, the Positional Tokens of Sports Markets are priced between 0.00 USD and 1.00 USD by the Sports AMM.
Example: Chainlink odds feed reports that the odds of a HOME WIN of a certain game is 30%. This means that the AMM will offer
HOMEERC-20 tokens for sale priced at ~0.30 USD (depending on Skew Impact which can go to max +5% premium). If the end result of the game in question resolves as a HOME WIN, every
HOMEtoken will be redeemable for 1.00 USD, meaning that everyone who purchased HOME tokens for 0.30 USD in the trading phase earned 0.70 USD of profit per token.
Each Sports Market has native liquidity caps (or limits). The AMM will offer on-demand liquidity under the following conditions only:
- The Sports AMM's risk is below a currently set threshold in USD. - The AMM can only allow exposure to the market resolution (game result) below the currently set threshold. If the threshold is reached, the AMM stops offering liquidity for that sports market.
DRAWpositions have odds reported between 5% and 95%. - The AMM does not support liquidity if the position in question is priced below $0.05 or above $0.95.
Bonuses are added to positions that are underbought, providing traders with an incentive to take these positions and go against the crowd. If users are piling on the same side of a market (team A) then the other position (Team B) will be awarded a bonus of up to 10%. A 10% bonus on a position with a quote of 0.5 USD will pay out at the rate of a 0.45 USD quote.
HOME tokens are given a 6% bonus in this market since AWAY tokens are overbought
Each market is resolved by Results Data provided by Chainlink Sports Feeds.
- HOME WIN - Each holder of HOME WIN tokens can redeem their tokens for 1.00 USD per token.
- AWAY WIN - Each holder of AWAY WIN tokens can redeem their tokens for 1.00 USD per token.
- DRAW - Each holder of DRAW tokens can redeem their tokens for 1.00 USD per token.
- CANCELLED GAME - Every token is redeemable for the amount per token coinciding with the last reported odds for the game in question.
For Tennis markets, walkovers will be treated as canceled matches, while retirements during matches or disqualifications will be treated as a win for player going to the next round.
- H1 WIN- If a Handicap is surpassed by the Favorite, holders of H1 tokens can redeem their tokens for 1.00 USD per token.
- H2 WIN- If a Handicap is not surpassed by the Favorite or the Underdog wins, holders of the H2 token can redeem them for 1.00 USD per token.
- OVER WIN- If the total points scored in the match is OVER the projected Total points, holders of the OVER token can redeem them for 1.00 USD per token.
- UNDER WIN- If the total points scored in the match is UNDER the projected Total points, holders of the UNDER token can redeem them for 1.00 USD per token.
REMEMBER! Markets for soccer/football games resolve after regular time. If tied at the end of regular time, DRAW is the winning position, even if a team goes on to win in extra time.
For additional Technical Details around Sports Markets AMM contracts, visit the following link: