Ever since I read the article Bitcoins, Blockchains, and the next stage of online betting back in May 2017, I got sold on Crypto instantly seeing how this could be a real gamechanger revolutionizing the Sports Betting Industry. I followed this market closely for the past 4 years and came up with a model I believe could work a couple of months back using liquidity pools similar to Uniwap. (See Post). last week, Augur released Augur Ultra which seems to do exactly this...
Most crypto Sports Betting projects right now are a copy of the model traditional bookmakers are doing but with no KYC / Deposits (See Sportbet.one Guide | Wagerr Guide |Wink.org" Guide along with some exchanges like Sportx.bet and degens.com who work like Betfair but have high juice and very little liquidity. The problem with all of these is that they remain semi-centralized and don't fully solve the main issue of being able for Sports Bettors to get better odds on average. Until this day, there is no competition to my betting broker Sportmarket Pro which still accounts for 99%+ of my own betting activity and nearly always offers the best odds with good betting limits not banning winning players.
Basically, what is needed to have something that is an improved version of the centralized Sportmarket Pro, is a decentralized way to add events to bet on also properly settling them. Once that is in place, allow anyone in a user-friendly way to act as the bookmaker providing liquidity on 2 or more sides with dynamic odds that automatically move based on an automated market maker model or allow players to put in a 1-sided trade on the bet they want.
Similar to how Uniswap changed the game for Exchanges, something like this could do the exact same for Sports Betting.
Augur is a crypto project that has aimed to make a prediction market on Ethereum having their REP token as a tool to provide their own decentralized market creation & oracle solution. This model has not gotten very much traction as Ethereum is slow with high fees along with a lack of users and liquidity being not that user-friendly so far. Last week, They released a completely separate product aimed toward Sports Betting (Not linked to the REP Token) called Augur Turbo which uses almost the exact model I wrote about months ago.
They use Chainlink as an oracle solution for Market creation and Settlement while allowing anyone to provide liquidity running on the Polygon 2nd layer solution for Ethereum. The Augur Turbo website is hosted on IPFS. 1.5% of volume goes to Liquidity providers while claiming earnings requires a 0.05% Fee for the Chainlink oracle Operators.
I have been testing it out these past days taking some bets in the process with the main conclusion that the idea itself is great but the execution so far is rather poor causing a lot of confusion and needing a lot more options to make it work. It also looks like those who provide liquidity have no clue what they are doing which makes it possible to bet some crazy high odds on Augur Turbo.
Things that need improvement
These all are just things based on my initial impression...
1. Remove No Contest Option: So each of the matches has a 'no contest' option:
Regular bookmakers & exchanges have a void function where funds are returned in case the match doesn't meet certain requirements. This "No contest "option is forced upon those that provide liquidity while it is totally neglectable in terms of chance of winning which forces them to give higher odds on the 2 valid options. It also makes everything incompatible with the existing sports betting market in order to hedge or arbitrage bets and so.
2. Improved User Interface
As someone who generally finds Betfair already confusing, Augur Ultra is next level showing 0.32$ -0.65$- 0.03$ odds type not calculating the 1.5% fee in them. It should look and feel very similar to what all the Sports Bettors are used to with options to view everything in Decimal, Fractional, or American depending on the user choice.
3. Custom Liquidity Providing:
Right now as liquidity provide liquidity, you pretty much need to act as a 100% bookie with no Juice and a forced offering of a 'No Contest' of at least 1% getting 1.5% of the volume as a reward with the risk of losing part of your capital if Sports Bettors beat the odds. If you are the first to provide liquidity on a certain event, you pretty much can choose what odds you want to provide. If you add liquidity later on, you are forced to provide similar to the odds that are available at that moment.
If someone provides 10$ of liquidity at crazy odds and removes it, the next one seems to be forced to provide liquidity at the same odds which totally breaks the entire model.
To fix this, they should remove the 1.5% and allow anyone to create their own liquidity with as much juice as they want or even provide just on 1 side based on the bet that they actually want to get accepted. All these different liquidity poos should be automatically linked to the ones who want to place giving them the highest available odds first.
Those are 3 key things that in my view need to be improved in a model I believe could really work as a way to do decentralized betting in a way that shakes up the existing Sports Betting Industry. I'm the first in row to deploy some capital acting as a bookmaker in this way but Augur Turbo in this regard is totally useless right now. I am taking advantage of some of the crazy odds that are offered over there though. You can literally bet Utah Jazz @ 1.50 odds there while Pinnacle has 1.21 odds which is crazy.
I really was surprised to see Augur releasing a product that experiments with betting and liquidity pools as I am sold on this idea as a concept. The execution is a total mess though and it feels like there are a lot of changes and tweaks needed still to get it to a sweet spot where it is actually usable. Until that point, I will try to take advantage of some of the clear mistakes these markets still have. I will closely keep following this project and bring reports on it as the development continues.