Onchain Sports Betting using UBET Automated Market Maker
Daniel Jiwoong Im, Alexander Kondratskiy, Vincent Harvey, Hsuan-Wei Fu
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The paper underscores how decentralization in sports betting addresses the drawbacks of traditional centralized platforms, ensuring transparency, security, and lower fees. Non-custodial solutions empower bettors with ownership of funds, bypassing geographical restrictions. Decentralized platforms enhance security, privacy, and democratic decision-making. However, decentralized sports betting necessitates automated market makers (AMMs) for efficient liquidity provision. Existing AMMs like Uniswap lack alignment with fair odds, creating risks for liquidity providers. To mitigate this, the paper introduces UBET AMM (UAMM), utilizing smart contracts and algorithms to price sports odds fairly. It establishes an on-chain betting framework, detailing market creation, UAMM application, collateral liquidity pools, and experiments that exhibit positive outcomes. UAMM enhances decentralized sports betting by ensuring liquidity, decentralized pricing, and global accessibility, promoting trustless and efficient betting.