TIP-226: Front-running protection through cancellation

Voting ended over 1 year agoSucceeded

id	Title	Status	Author	Description	Discussions to	Created
TIP-226	Front-running protection through cancellation	Vote Pending	KirilA	Implementing feature to prevent front-running	https://discord.com/invite/thales	2024-09-20

Simple Summary

This TIP enables feature on the Thales protocol to prevent front-running or regular positions on invalid odds.

Abstract

This TIP adds a feature that would allow pDAO to prevent front-running or betting with invalid odds. In case users have already bet on invalid odds, the pDAO is able to react and cancel tickets before the LPs are irreversible drained with invalid odds.

Motivation

The existing system does not allow any mitigation of tickets created with invalid odds. The Overtime V2 markets offering is increasing each day. More games, leagues and market types are offered, making the whole system more complex and harder to monitor. Sharp odds are crucial for fair betting for both users and LPs. Some of the market types and games may experience delayed response from bookmakers which exposes the LPs for users to take advantage of invalid odds. Especially this is the case for live-betting where the nature of the games can rapidly rebalance the odds (e.g., soccer). The delay in such cases can be easily front-run by users.

The live trading is still in beta version with daily improvements towards reducing any exposure or front-running. In that process by adding this feature, pDAO can validate inconsistencies and revert the bets by cancelling the tickets without harming both the users and the LP providers. There are multiple sources (one, two and three) that are allowing us to detect invalid odds exposure and inspect if any front-running has occured.

Invalid odds

Here is a short classification of invalid odds.
For live-betting:

Front-running: placing bet based crucial event of game before odds have updated (penalty kick, goal, disallowed goal etc.)
Stale odds: if odds are not refreshing or technical error

For pre-game odds:

Odds which provide risk-free position inside OTM (Out of the Money).
Invalid team labeling usual in friendly games (e.g. Manchester United instead of Manchester United Under-23)

Examples of invalid odds:
A user has placed a bet within 5 seconds of a significant in-game event (penalty, goal/point scored) where odds have not been updated on-time due to technical error (e.g., delayed bookmaker update).
Flipped odds for games due to techical errors. The odds of the home team are swapped with the odds of the away team.

Example of similar approach from Pinnacle:

Misspellings, typographical errors, teams changing names, and incorrect leagues are not grounds for bets to be voided, as long as it is clear based on the context what the intended fixture was.
If a fixture is offered with an incorrect number of rounds or periods or with a non-standard duration for the sport without it being indicated, all bets on that fixture will be voided.
If there is an obvious error in the odds or limit of a market, bets on that market may be voided. If for any reason a bet is accepted after a fixture has begun (other than clearly indicated Live In-Play betting) bets will have action unless a material advantage has been gained. Pinnacle reserves the right to deem the bet void if it determines that an advantage has been gained.

Usage

The use of this feature is only in the case of tickets taking advantage of invalid odds.
When applied, an evidence is generated through timestamp comparisson of the voided tickets and the invalid odds occurance.

Specification

The Overtime system is updated with allowance for pDAO to cancel tickets at any time before they are claimed (in case of winnings).
The ticket is cancelled which means the user gets the fully invested amount back, while the LPs are safe from being drained with invalid odds.

Implementation

Adding cancel method in Tickets
Enabling canceling ticket through main SportsAMMV2 using pDAO
Code PR: https://github.com/thales-markets/contracts-v2/pull/82

Copyright

Are you in favor of this proposal?

Off-Chain Vote

Yes

6 TC-NFT100%

0 TC-NFT0%

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Timeline

Sep 26, 2024Proposal created

Sep 26, 2024Proposal vote started

Sep 28, 2024Proposal vote ended

Mar 05, 2026Proposal updated

Title

Status

Author

Description

Discussions to

Created

TIP-226

Front-running protection through cancellation

Vote Pending

KirilA

Implementing feature to prevent front-running

https://discord.com/invite/thales

2024-09-20

Motivation

Invalid odds

Here is a short classification of invalid odds.
For live-betting:

Front-running: placing bet based crucial event of game before odds have updated (penalty kick, goal, disallowed goal etc.)

Stale odds: if odds are not refreshing or technical error

For pre-game odds:

Odds which provide risk-free position inside OTM (Out of the Money).

Invalid team labeling usual in friendly games (e.g. Manchester United instead of Manchester United Under-23)

Example of similar approach from Pinnacle:

Misspellings, typographical errors, teams changing names, and incorrect leagues are not grounds for bets to be voided, as long as it is clear based on the context what the intended fixture was.

If a fixture is offered with an incorrect number of rounds or periods or with a non-standard duration for the sport without it being indicated, all bets on that fixture will be voided.

If there is an obvious error in the odds or limit of a market, bets on that market may be voided. If for any reason a bet is accepted after a fixture has begun (other than clearly indicated Live In-Play betting) bets will have action unless a material advantage has been gained. Pinnacle reserves the right to deem the bet void if it determines that an advantage has been gained.

Usage