TIP-236: Add futures/outrights to Overtime

id	Title	Status	Author	Description	Discussions to	Created
TIP-236	Add futures/outrights to Overtime	Vote Pending	Danijel	Add futures/outrights as an offering type on Overtime		2024-11-04

Simple Summary

This TIP proposes the framework for adding futures/outrights bet types to Overtime

Abstract

This TIP explains the motivation of adding futures, the considerations needed to be factored in the technical architecture and risk management and motivation behind adding futures betting type.

Motivation

Futures are a standard part of the offering across all web2 sportsbooks. To those unfamiliar with the term, it captures markets that are not about a single game/match/bout but rather about a tournament or season as a whole. Example markets:

• Who will win the Superbowl 2024/2025 season?
• Who will be the MVP of the NBA 2024/2025 regular season?
• Which player will win Wimbledon 2025?

These markets differ from regular markets as they are usually far ahead in the future which offers potential benefits to a sportsbook protocol, but also carries a lot of different risk considerations.

Benefits:

• Futures usually have a lot of options to choose from, thus balancing the LPs exposure, and allows the potential for higher margins
• Popular volume drivers
• Potential to offer collaterals in form of yield accruing tokens which would be a unique web3 perk

Risks:

• Due to their nature and with the current architecture of 100% collaterization, futures would lock collateral for a long time
• As some futures don't have a fix date when those can be resolved, the current architecture of weekly LP rounds would not be applicable
• Futures are generally considered a "special" section in most sportbooks and are usually not parlayable with the rest of the "normal" offering

With the above risks in mind the following architectural changes are proposed to implement futures in the specification section.

Specification

Futures will be created in the same manner as all other markets are created, with a merkle tree representing each future.
The sport IDs of the futures will be known in advance, with each league having a dedicated sportID, e.g. NBA will be "NBA - Futures": 30004, which will not be the same as "normal" NBA sport ID which is 4.

By knowing all IDs which represent futures, the RiskManager contract will ensure that no futures can be parlayed, effectively meaning that futures can only be bet on as singles.

The second contract change to implement futures will be executed in LiquidityProviding contracts, which would assign all futures to the default LP round, meaning that external depositors are not subject to Futures PnL. This is required as futures can not be pegged to a dedicated LP round, as described in the motivations section. It is also more convenient as it effectively means only protocol treasury will be subject to futures PnL while these are iteratively rolled out.

Future outlook

Going forward, we should consider supporting yield accruing collaterals, to have an additional selling point for web3 sport futures.

With futures, users like caching out early whenever possible, this is something to be mindful of as well.

Implementation

https://github.com/thales-markets/contracts-v2/pull/98

Copyright

Copyright and related rights waived via CC0.

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