OIP-244: Update Free Bet Logic to One-Time Use

ID	Title	Status	Author	Description	Discussions To	Created
OIP-244	Update Free Bet Logic to One-Time Use	Vote Pending	@danijel	Modify free bet structure so the buy-in is not recycled to user after first use	Discord	2025-06-03

Simple Summary

This OIP proposes a change to the Free Bets system on Overtime: after a free bet is used, only the net winnings are paid out to the user, while the buy-in amount is returned to the protocol rather than being recycled to the user’s free bet balance.

Abstract

Currently, when a user places a bet using a free bet (e.g., 10 USDC), if the bet wins, the net winnings (i.e., anything above the 10 USDC) are paid out to the user, and the original free bet amount is returned to their free bet balance for reuse. If the bet loses, the free bet amount is forfeited and sent to the liquidity providers. This proposal changes only the winning case: after a win, only the net winnings will be sent to the user’s wallet, and the original free bet value will be returned to the protocol for future user acquisition. Losing bets will continue to behave as they do now — the free bet is forfeited.

Motivation

The current model allows users to reuse free bets repeatedly, significantly increasing protocol costs. Shifting to a one-time use model:

• Reduces the cumulative cost of each incentive.
• Aligns with industry-standard sportsbook promotions.
• Creates urgency and encourages thoughtful use by recipients.
• Enables more efficient capital rotation for growth.

This change is more sustainable and aligns better with long-term marketing and user acquisition strategy.

Specification

• The FreeBetsHolder contract logic will be updated as follows:
  • If a user wins a bet using a free bet, they receive only the net winnings, and the original free bet amount is returned to the protocol.
  • If a user loses the bet, the free bet amount is forfeited to the protocol (unchanged from current logic).

Rationale

• Sustainability: Prevents indefinite recycling of incentives, reducing free bet liabilities.
• Consistency: Aligns with common sportsbook practices for promotional offers.
• Efficiency: Allows the protocol to reallocate unused capital for new users and campaigns.

Test Cases

1. Free Bet - Win Case (New Logic)

Given:
A user is allocated a free bet of 10 USDC.

When:
The user places a bet using the free bet and wins.

Then:

• Only the net winnings (e.g., payout - 10 USDC) are transferred to the user's wallet.
• The original 10 USDC free bet amount is not returned to the user's free bet balance.
• The 10 USDC is retained by the protocol for future user acquisition.

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2. Free Bet - Loss Case (Unchanged)

Given:
A user is allocated a free bet of 10 USDC.

When:
The user places a bet using the free bet and loses.

Then:

• The free bet is lost (forfeited to the liquidity providers).
• The user receives no payout.
• The user’s free bet balance is not recharged.

Implementation

A small logic update is required in the FreeBetsHolder.sol contract to skip re-crediting the buy-in amount after a win. Existing free bet balances will retain current behavior; the change applies only to free bets granted post-upgrade.

Copyright

Copyright and related rights waived via CC0.

Are you in favor of this proposal?