OIP-257: Reduce $OVER Additional Payout Incentive

id	Title	Status	Author	Description	Discussions to	Created
OIP-257	Reduce $OVER Additional Payout Incentive	Vote Pending	Danijel	Reduce $OVER additional payout from 2% to 1% to improve base odds competitiveness and reduce margin pressure	https://discord.gg/thales	2026-02-02

Simple Summary

This OIP proposes reducing the additional payout incentive for betting with $OVER from 2% to 1%.

The objective is to rebalance incentives so Overtime can offer more competitive base odds (USDC/WETH), reduce structural margin pressure, and improve overall market competitiveness—while still preserving a meaningful advantage for users who choose to bet with $OVER.

Abstract

Overtime currently offers a 2% additional payout when betting with $OVER token. While this incentive has been effective in driving $OVER usage, it introduces a structural constraint on pricing:

• A 2% additional payout effectively translates into ~1% less margin on those bets.
• When attempting to match sharp market odds (e.g. Pinnacle) on the base line, the resulting $OVER odds can end up with 30–50% less margin than the sharpest centralized books.
• This materially limits how aggressive Overtime can be on base (USDC/WETH) odds without overexposing the protocol via $OVER.

As a result, Overtime is often forced to keep intentionally worse base odds (by ~1%) to compensate for the $OVER uplift, reducing competitiveness for the majority of users.

Reducing the $OVER additional payout to 1% alleviates this pressure while maintaining $OVER as the best-odds option on the platform.

Motivation

Structural pricing limitation

With a 2% additional payout, the protocol faces a hard constraint:

• If Overtime matches sharp books on base odds:
  • $OVER bets become significantly under-margined
  • Risk exposure increases disproportionately
• To compensate, Overtime must:
  • Price USDC/WETH odds worse than the market
  • Protect against $OVER-driven overexposure

This dynamic directly limits the protocol’s ability to compete on headline odds.

In practice, the 2% incentive forces a tradeoff where:

• $OVER odds are extremely attractive
• Base odds (which drive ~90% of volume) are less competitive

This is suboptimal for both growth and sustainability.

Volume reality: base collateral dominates

Despite successful $OVER tokenomics:

• ~90% of total volume is still placed in USDC/WETH
• Most users prioritize:
  • Familiar assets
  • Simplicity
  • Avoiding exposure to alt tokens

While $OVER has strong adoption among core users, the current structure unintentionally limits onboarding reach to users who are unwilling to acquire or hold alternative tokens.

Tokenomics vs reach

The 2% additional payout has been effective in:

• Encouraging $OVER usage
• Creating a clear “best odds” path
• Supporting token demand

However, it also:

• Caps how competitive Overtime can be on base odds
• Creates friction for new or casual users
• Concentrates pricing risk into $OVER markets

Reducing the incentive to 1% strikes a better balance between:

• Token utility
• Risk management
• Market competitiveness
• User acquisition

Why 1% is sufficient

A 1% additional payout still:

• Provides meaningfully better odds than the broader market
• Keeps $OVER as the best-odds collateral on Overtime
• Results in significantly lower effective margin than sharp books
• Preserves $OVER’s value proposition for price-sensitive bettors

At the same time, it:

• Allows Overtime to price USDC/WETH markets more aggressively
• Reduces forced base-odds handicapping
• Improves competitiveness where most volume exists

Specification

$OVER additional payout change

• Before: +2% additional payout
• After: +1% additional payout

No other collateral incentives are changed.

Scope

• Applies uniformly across all applicable markets
• Does not affect existing tickets
• Takes effect only for new bets placed after activation

Rationale

Base odds competitiveness matters most

Overtime competes in a market where users benchmark odds directly against sharp books.

Improving base odds:

• Increases conversion
• Improves retention
• Reduces perception of “DEX tax”
• Drives higher sustainable volume

Given that the majority of volume is non-$OVER, optimizing base pricing has outsized impact.

Risk concentration reduction

Lowering the $OVER uplift:

• Reduces extreme margin compression on $OVER bets
• Lowers tail-risk exposure
• Improves overall pricing flexibility

This makes it easier to:

• Match market odds when appropriate
• Manage exposure without blunt limits
• Scale volume responsibly

Token utility remains intact

$OVER continues to:

• Offer the best odds on the platform
• Serve as a premium collateral option
• Benefit users who value maximum payout efficiency

This change optimizes, rather than removes, the incentive.

Expected Outcomes

• More competitive USDC/WETH odds
• Reduced need to artificially handicap base markets
• Better alignment with sharp market pricing
• Improved onboarding for non-$OVER users
• Sustained but healthier $OVER usage

Backwards Compatibility

This OIP:

• Does not require contract migrations
• Does not invalidate existing tickets
• Is a parameter-level adjustment only

Implementation

• Update $OVER payout multiplier via governance-controlled parameters
• Frontend copy updates to reflect the new incentive level

Conclusion

The 2% $OVER additional payout has served its purpose, but now materially constrains pricing flexibility and competitiveness.

Reducing the incentive to 1% preserves $OVER’s role as the best-odds option while unlocking:

• Better base odds
• Broader user reach
• Lower risk concentration
• More sustainable growth

This change prioritizes market competitiveness and long-term scalability, without abandoning the $OVER token’s core value proposition.

Copyright

Copyright and related rights waived via CC0.

Are you in favor of this proposal?