TIP-232: Reduce odds boost for liquid THALES to 1%

id	Title	Status	Author	Description	Discussions to	Created
TIP-232	Reduce odds boost for liquid THALES to 1%	Vote Pending	Padzank (@padzank)	Reduce odds boost for liquid THALES to 1% while keeping staked THALES at 2%	https://discord.gg/thales	2024-10-16

Simple Summary

Reduce odds boost for liquid THALES to 1% while keeping staked THALES at 2%

Abstract

Betting with liquid THALES tokens grants users 2% better odds compared to using USDC and WETH. Recently, betting with staked THALES (sTHALES) was also developed with the same bonus as liquid THALES. With collected data, the 2% provides a significant edge to advanced traders for a long term performance.

This TIP proposes to reduce the odds boost of liquid THALES betting from 2% to 1%, while keeping the staked THALES (sTHALES) boost at the maximum 2%.

This change will motivate sharp traders to align better with the protocol if they want the best terms possible for trading.

Motivation

The launch of Overtime V2 came with the support of the THALES token as trading collateral. Trading with THALES is set to have 2% better odds for traders compared to nominal odds when using USDC and WETH. This had the effect of aligning Overtime traders more with the foundational Thales Protocol. However, the 2% boost provides a significant edge for sharpest traders, which have completely pivoted to using THALES for betting ever since. The data shows that this edge is enough to provide the sharp traders constant long term success against the treasury provided THALES liquidity.

With allowing this max odds boost only for staked THALES as collateral has several layers of better alignment. It incentivises Overtime users to stake THALES, motivating them to participate in Thales Protocol governance while getting weekly yield in more THALES and pure stablecoins from fees. Staked THALES tokens are non-transferable and you can only use them for trading on Overtime to win more staked THALES. If you want to unstake your THALES, you have to wait for a 7 days cooldown, during which you cannot trade. When betting with liquid THALES, user's wins are instantly liquid and users are not aligned with the protocol.

Specification

This TIP entails the Thales Protocol DAO to reduce the odds boost for liquid THALES collateral from 2% to 1%, while keeping the 2% boost only for staked THALES betting (sTHALES).

Implementation

TBD

Copyright

Copyright and related rights waived via CC0.

Are you in favor of this proposal?