A Sports Betting Protocol for all ERC20 Tokens - fansunite.io · Betting Exchange Fees Resolution...
Transcript of A Sports Betting Protocol for all ERC20 Tokens - fansunite.io · Betting Exchange Fees Resolution...
White PaperFansUnite - The Protocol for Betting ERC-20 Tokens on Ethereum
This document contains proprietary information. Written consent is required for distribution or duplication of any portion contained herein. All rights reserved: 2018—FansUnite Limited.
Version 2.0
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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1.0 - Executive Summary
FansUnite is paving the way for a diverse ecosystem of DApps, enabled by the free and decentralized
provisioning of sports data. The FansUnite Protocol and the underlying market data offer many use
cases, which are only limited by the ingenuity of participating developers and businesses.
The FansUnite Ecosystem roadmap will primarily focus on the release of the FansUnite Protocol,
and the first decentralized application to be released on the Protocol, the FansUnite Sportsbook.
The FansUnite Protocol consists of a library of publicly available smart contracts, developer friendly
tools, and a token economy that incentivizes network participation of independent Oracles to
provide low-latency and accurate sports data. These three facets of the FansUnite Protocol address
shortcomings in the existing sports betting landscape and represent key developments in facilitating
a disintermediated betting infrastructure.
The first application to be built atop this protocol will be the FansUnite Sportsbook. The FansUnite
Sportsbook has been designed to incentivize widespread adoption by bettors by implementing a
historically low 1% margin and providing a social platform to facilitate collaboration amongst bettors.
FansUnite hopes to showcase the type of compelling applications that are possible in a distributed
and developer-driven ecosystem. The FansUnite team is excited to introduce a more profitable,
transparent and social betting ecosystem that delivers on FansUnite’s mandate to continue improving
conditions for bettors globally. For more information on the FansUnite Sportsbook DApp, please refer
to the DApp White Paper.
The FansUnite Protocol has been designed to fulfill the following:
Enable fully decentralized applications (DApps) that are not reliant on centralized entities
by sourcing event and player data from a network of independently operated and
incentivized Oracles;
Allow DApp developers to raise funds in and utilize their own Ethereum-based tokens on
their platform while still using the FansUnite Protocol for market creation, bet submission,
resolution and payout. Allowing for DApp developers to potentially conduct their own
tokensales encourages adoption by a wide array of DApps and increases the potential
volume of tokens bet on the protocol.
Provide transparent access to all market data on the Protocol, which is currently the
domain of major sportsbooks. This data is highly valuable and is currently a closed store of
betting transaction data. The current practice of siloing data creates a major discrepancy
in pricing power of a given market between major sportsbooks and small to midsize
sportsbooks. Full access to the transparent betting data available through the Protocol
changes this dynamic by providing equal access to all operators and bettors, fostering
innovation, price efficiency and new market entrants.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Create infrastructure that reduces the dependence on, and redistributes value from, sports
data monopolies like SportRadar to a network of independent Oracles providing sports data.
Eliminate unnecessary duplication of work and restore network effects by releasing an efficient
and decentralized sports betting solution on Ethereum, providing a free application-agnostic
protocol that any DApp can utilize.
Encourage adoption by existing operators and reduce technical barriers to entering the
cryptocurrency and blockchain-based sports betting market by providing a library of smart
contracts, the FansUnite.js package, the provision of player and event data by a network of
Oracles, and KYC (Know Your Customer) compliant services. Immediate benefits to operators
and applications built upon the FansUnite Protocol includes a significant reduction in cost
by using smart contracts instead of payment processors and by leveraging a decentralized
network of Oracles instead of paying for costly data feeds.
Streamline redundant use of Ethereum network resources by:
Providing a standardized library of team and event information on IPFS with standardized
identifiers on-chain for any DApp to utilize; and
Utilizing an “off-chain relay on-chain settlement” system inspired by 0x (link). Messages
are passed from the bet backer to a bet relayer who, upon checking and accepting the
parameters of the bet, then posts the bet along with the original signed cryptographic
hash on-chain.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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1.0 -
2.0 -
3.0 -
4.0 -
5.0 -
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Issues in Sports Betting
Unfair Value Capture
Requirement of Trust
High Fees
Movement of Money
Integrity
Competitive LandscapeCentralized
Asymmetric Market Information
Fail to Facilitate Adoption
Isolated Token Economies
Non-Compliant
FansUnite ProtocolDisintermediated
Application Agnostic
Trustless
Efficient
Community Governed
Regulatory Compliant
Technical ArchitectureSmart Contracts
InterPlanetary File System
JS Library
Event Listing and Oracle Network
Technical ProceduresMarket Creation
Minimizing Duplicate Events
Custom Markets
Bet Submission
Messaging System
Token Escrow Calculation
Partial Matching
KYC / AML Implementation
Event Resolution
Oracle Staking & Reward
Oracle Consensus
Oracle Reputation
Bet Grading
Bet Resolution Library
Table of Contents
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Technical Procedures (ctd.)Incorrectly Graded Wagers
Dispute Process
Withdrawal Allowance
Contingency Reserve Fund
FansUnite TokenGovernance
Betting Exchange Fees
Resolution Dispute Staking
Contingency Reserve Fund
Oracle Staking
FansUnite Roadmap
Business PlanMarket Factors
Corporate Structure
Token Supply & Distribution
Use of Proceeds
Team
Summary
Appendices
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Copyright © 2018 FansUnite Limited. All Rights Reserved.
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1.0 - Issues in Sports Betting
These entities are able to more efficiently price markets than small competitors...stifling competition and discouraging new market entrants.
The sports betting industry is founded upon intermediaries charging fees
for facilitating liquidity amongst bettors. The FansUnite Protocol and its use
of the Ethereum blockchain holds the key to disrupting this long-standing
equilibrium. One of the primary concerns of bettors is the assurance that
their transactions are safely processed and honoured. As such, bettors favour
established operators with a good track record of paying out wagers and
governed by gaming authorities. This is a natural and necessary tendency
in a system where trust is required to conduct transactions between two
parties. Unfortunately, this pull towards established
sportsbooks has resulted in the gradual consolidation of
disproportionate amounts of market data amongst the
dominant operators in the space. The resulting oligopolistic
sports betting landscape has allowed these entities to
sequester value away from other market participants.
Mergers between industry leaders like Ladbrokes and
Gala Coral (subsequently, in March 2018, Ladbrokes
Coral Group PLC was acquired by GVC Holdings PLC), or
Betfair Group PLC and Paddy Power PLC, only expedites
the consolidation of market data and further reinforces
the need for a change to encourage competition and
innovation. This consolidation of market data causes
several problems for the sports betting industry which we
outline below.
Unfair Value Capture
The siloed data structure in the existing sports betting market results in
large data oligopolies (i.e. major sportsbooks) having the ability to out-price
competitors due to their volume of available market information. These
major sportsbooks are able to more efficiently price markets than smaller
competitors. This competitive advantage allows the major sportsbooks to
indirectly force smaller competitors to adjust to their lines or be arbitraged
into illiquidity, stifling competition and discouraging new market entrants.
The utilization of a public blockchain to transparently store betting transaction
data provides a solution to the data disparity by providing all network
participants, bettors and operators alike, with equal access to market data.
/ 1
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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/ 2 / 4Requirement of trust
The existing betting market sees bettors
entrusting operators with their personal
information and funds, with the hope that
prior good behaviour implies that bets will
be honoured, funds paid out and personal
information protected. The utilization of
blockchain and smart contracts on Ethereum
allows for bettors to hold funds in their own
wallets, maintain control of their personal
information, and place their trust in a code-
governed environment rather than a centralized
entity who is a party to the betting transaction.
Movement of Money
The FansUnite Protocol can also solve another
contentious issue for bettors - lack of control
over funds and delays with transacting their
own assets Bettors would prefer to have
control of their assets at all times and be
able to transact said assets quickly. Deposits
and withdrawals instead often take days,
with many bettors still relying on electronic
fund transfers (EFTs) and wire transfers. By
leveraging a cryptocurrency, bettors are able
to instantly deposit and withdraw assets.
/ 3High fees
As stated above, the disparity in market
information results in few operators possessing
the necessary data to efficiently price markets.
As these smaller operators do not have the
data required to efficiently price markets, their
only alternative is to offer higher margins so as
to not have poorly set lines that will be taken
advantage of. By offering transparent and
readily accessible market information on the
blockchain, and incorporating tools as part of
the FansUnite.js developer library, the FansUnite
Protocol will make this information readily
accessible. Further, the FansUnite Protocol will
level the playing field for operators and allow
more efficient price discovery, encouraging
further competition on price. Clearly, such
a result would benefit the existing betting
market which has seen massive mergers create
insurmountable obstacles for new market
entrants, ultimately depriving bettors of choice
and price.
/ 5Integrity
Another unfortunate byproduct of this
system of siloed transactional data is that it
is impossible to capture a holistic view of any
given betting market. Recent events such as
the Wimbledon match fixing scandal1 have
highlighted that match fixing concerns are
valid at even the highest levels of competition.
The legalization of sports betting in the United
States has resulted in a standoff between
sportsbook operators and professional
leagues who feel entitled to compensation
for the increased pressure and cost to police
the integrity of the games played in their
respective sports. By providing a global and
transparent liquidity pool, the FansUnite
protocol provides a ready made solution
to all stakeholders in the integrity debate.
Suspicious betting activity is markedly easier
to spot in a system where global market data
is available to regulators, no longer able to
be hidden amongst activity spread across
numerous operators.
“Wimbledon first-round men’s doubles tennis clash reported over ... -
ABC.” 11 Jul. 2018, http://www.abc.net.au/news/2018-07-11/wimbledon-
tennis-match-reported-as-suspicious/9968896. Accessed 20 Jul. 2018.
1
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2.0 - Competitive Analysis
The sports betting industry is widely considered to be an industry ripe for disruption by blockchain
technology. Blockchain facilitates trust in financial transactions between arm’s length parties. The
advent of smart contracts on Ethereum made it simple to programmatically disburse funds based
on a given outcome, an obvious parallel to betting. As such, it is not surprising that we have seen an
abundance of decentralized applications attempt to create sports betting solutions on the Ethereum
blockchain.
Unfortunately, these projects seem to misunderstand why a decentralized and disintermediated
sports betting future is both beneficial and inevitable. Consequently, these proposed platforms miss
key value propositions that we feel are integral to a long-term solution for sports betting on the
blockchain. We outline some of these shortcomings and and summarize their approaches below.
CentralizedNumerous projects continue to purport that
they are facilitating decentralized betting
simply by utilizing smart contracts to resolve
wagers. Smart contracts actually operate like
walled gardens - closed ecosystems in which
all operations are controlled by the ecosystem
operator, with no easy access to external data.
This represents a challenge to sports betting
DApps who need to port event data from the
real world on-chain. Outlined below are the
various proposed solutions by competitors:
Bethereum and Decent.bet each propose
systems that rely on “trusted Oracles” for
external sports data, centralized data feeds
no different than those used by existing
sportsbooks. By still utilizing these data
providers for event creation and bet resolution
these platforms fail to eliminate central points
of failure and mitigate their own overarching
ability to dictate results.
Betrium propose that event organizers should
create and resolve their own events. This
approach exposes bettors to risks associated
with bad actors and negligence by these third
parties. Betrium also states that bets are only
placed on-chain at the conclusion of an event,
which defeats the entire purpose of utilizing a
blockchain betting solution.
Better Betting proposes that sportsbooks
either resolve their own bets or rely on
some form of consensus, but then provide
no implementation details and allude to
outsourcing resolution and arbitration to a
third party.
MeVu does outline a decentralized solution,
though their proposed solution oversimplifies
the complicated issue of a network reaching
consensus on an outcome. They focus on
operating a purely peer to peer model and
propose that bets initially be resolved by the
parties involved. In the case of a dispute, events
are then queued to be resolved by a consensus
of mvu token holders who manually vote on the
correct outcome over a period of 8 to 16 hours.
This solution is likely to prove slow, ineffective
and contrary to a bettor’s desire to see winning
funds returned quickly. Additionally, MeVu’s
outlined proposal offers no contingency in the
case of a lack of respondents or an otherwise
unsatisfactory quorum being reached by the
dispute process.
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Wagerr proposes a decentralized Oracle
network on a fork of the PIVX blockchain. Their
approach, while not fully detailed in terms
of technical implementation, is theoretically
suitable for the provisioning of peer-to-peer
betting. Unfortunately, since conducting their
token generation event in June 2017 they have
failed to deliver on any milestones in their
roadmap, delivering only a forked copy of the
PIVX wallet. The team has since ceased giving
updates on development progress.
Asymmetric Market InformationNone of these platforms attempt to create
a sports betting solution for any DApp on
Ethereum to utilize. Without the participation
of a significant number of DApps on Ethereum,
there will be no democratization of market
data for the shared benefit of the network. This
ultimately means that these platforms will fail
to encourage new market entrants and foster
innovation. In addition, the implementations
proposed do not allow for the easy aggregation
of betting data.
Better Betting utilizes separate bet smart
contracts for every event between two parties.
This is inefficient as an operator who wanted to
aggregate market information on a particular
league would have to obtain the individual bet
contract addresses for every wager on every
event within that league.
Bethereum states that every bet will be
recorded on its own smart contract, which
is highly inefficient from both a network
perspective and an organizational perspective
for future queries or aggregation.
Betrium only places market information on-
chain after the conclusion of an event, which
means that this market information would not
be transparently available to operators to use
for the shaping of efficient market prices.
MeVu utilizes a slightly more efficient approach,
placing all wagers into a wagers smart contract,
though this is still difficult to aggregate any
meaningful segmented market information
from.
Fail to Cater to Traditional OperatorsThe betting exchange or sportsbook approach
of the proposed platforms will not appeal to
traditional operators as a potential partner.
The proposed approaches simply will not work
without achieving sufficient liquidity across a
wide array of markets. Without liquidity, bettors
are unable to see their bets matched and their
wagers accepted. Ultimately, obtaining the
required liquidity for users of the proposed
platforms to have their desired bets accepted
under a pure betting exchange approach seems
unlikely as we struggle through the adoption
phase of cryptocurrency.
These proposed platforms create a closed
ecosystem of misaligned incentives, rather
than the inclusive approach of the FansUnite
Protocol. Potential partnership incentives are
misaligned between traditional operators and
the proposed platforms, as the majority of net
benefit would be to the platforms who would
likely require the use of their token. Any other
approach would simply devalue the tokens of
the proposed platforms significantly. Moreover,
these traditional operators would depreciate
their brand through the use of another
operator’s token. Importantly, the proposed
approaches do not allow traditional operators
to create or utilize their own native tokens. As
such, traditional operators will not be able to
maintain or enhance their brand and reach.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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However, the FansUnite Protocol encourages
adoption by incentivizing traditional operators to
become partners free to utilize and/or conduct
a token sale for their own native token while
enhancing their brand, or adopt an existing
token. FansUnite believes that these significant
differences will dampen the appeal of the
proposed solutions to traditional operators,
while encouraging mainstream adoption of the
FansUnite Protocol.
Isolated Token EconomiesThese platforms claim to be building
infrastructure that will be used by partners and
other operators who will port to or whitelabel
their platforms. Unfortunately, none of their
economies allow for an alternative token -
like that of a potential partner - to be used as
currency. The lack of support for alternative
tokens significantly undermines these platforms
appeal as a protocol for other DApps to build
atop of, and consequently hurts their chances of
establishing themselves as a universal solution.
The proposed platforms result in the creation
of isolated but similarly functioning betting
ecosystems, all with similar data structures,
event information and smart contracts being
separately and inefficiently stored on the
Ethereum blockchain.
Lack of Regard for Regulatory ComplianceThese platforms universally disregard the
importance of providing a regulatory compliant
offering, both with regards to financial
regulatory bodies such as the requisite security
commissions, gaming authorities and gaming
legislation such as Know Your Customer (KYC),
Anti-Money Laundering (AML), or obtaining
appropriate gaming licences. The likelihood of
mainstream adoption is significantly reduced by
the failing to comply with necessary legislation.
Further, the failure of these proposed platforms
to comply with applicable legislation renders
it impossible for traditional sportsbooks to
condone or utilize these platforms to gain
exposure to a new market of cryptocurrency-
based bettors. Furthermore, KYC/AML
regulations and gaming licensors exist to
defend the public interest by ensuring bettors
are of age, the origin of funds are known and
that operators are of necessary standard. These
are all principles that FansUnite supports.
Bethereum Better Betting
Decent.bet Betrium Wagerr MeVu FansUnite
Decentralized No No No No Yes Yes Yes
Accept any ERC20 Token
No No No No No No Yes
Facilitate Traditional Operators
No Yes No No No No Yes
Solidity Proof of Concept
No No Yes No No Yes Yes
Regulatory Compliant Approach
No No No Yes No No Yes
Further, it is one of our mandates to ensure that FansUnite meets or exceeds disclosure
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3.0 - FansUnite Protocol
FansUnite wants to address the concerns cited above and address the issues currently plaguing the
sports betting industry. The Protocol achieves this goal by creating a fully disintermediated system
for sports related DApps to build atop of. The FansUnite ecosystem will allow applications to raise
funds in and utilize their own application-specific tokens for betting, while leveraging the FansUnite
Protocol’s smart contracts, blockchain recording, and decentralized approach to sourcing sports
data.
The Protocol achieves the following:
Copyright © 2017 FansUnite Limited. All Rights Reserved.
Lowers the technical threshold of developing decentralized sports betting and sports data
applications by providing core smart contract infrastructure and developer tools;
Facilitates adoption by traditional operators by solving obstacles like Know Your Customer (KYC)
/ Anti-Money Laundering (AML) compliance that otherwise preclude them from taking bets in
cryptocurrency;
Make more efficient use of Ethereum network resources by:
Reducing duplicate information being stored on-chain by standardizing event, league
and team information;
Vastly reducing network traffic by utilizing an “off-chain relay on-chain settlement”
strategy similar to 0x’s approach for decentralized exchanges;
Remove central points of failure from the Protocol so it can function autonomously and be
community-governed;
Provides transparent market information to all network participants by architecting the Protocol
to allow for easy aggregation of all market data run through our Protocol; and
Produce a free and open protocol geared towards enabling an ecosystem of sports betting and
sports data DApps on the Ethereum blockchain.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Disintermediated.Long-term blockchain betting and data
solutions must embrace decentralization and
embed it into all facets of their offering. The
result is a robust system that is able to function
autonomously, independent of a controlling
entity or any centralized data providers. It is
only by implementing a fully disintermediated
architecture that we are able to redistribute
value away from data monopolies and to
network participants. FansUnite decentralizes
the provisioning of sports data by building a
protocol that distributes responsibility over data
provision, bet resolution and dispute resolution
to a network of independently operated
Oracles.
Token Agnostic.The FansUnite Protocol is intended to serve
as an unbiased and agnostic building block
for sport-data reliant DApps. Developers are
encouraged to not only build atop of but also
improve the underlying protocol itself. A portion
of the reserve pool will be allocated towards
community developer incentives that will be
tied to contributions to the code base. History
has proven that community-backed open-
source projects triumph over enterprise-driven
counterparts because the capacity of any one
central entity is finite. By allowing any Ethereum-
based token to be transacted on our protocol,
we increase our appeal to both developers
and operators who are still able to fundraise
via a token sale and continue to leverage their
existing brands. Such an approach provides
maximum flexibility and choice to potential
future users of the protocol.
Trustless.Smart contracts are uniquely suited to serving
as trusted arbiters for transactions, as the
contracts can hold tokens in escrow and
automatically transfer payouts based on a given
input. Unfortunately, the utilization of smart
contracts to execute wagers does not equate
to a fully trustless system as the parties are still
reliant on, and have to trust in, the source of the
data that is used to arbitrate the bet. In the case
that this data is sourced from a centralized data
feed paid for or provided by the controlling
entity, this represents no real departure from
the centralized system of sports betting
today. FansUnite solves this by incentivizing
an independent network of Oracles to provide
the data that is used to resolve bets. As such,
the FansUnite Protocol will be able to provide
truly “trustless” betting by distributing the
responsibility for arbitrating bets out to a
network rather than a source chosen by the
controlling entity.
Efficient.The FansUnite Protocol significantly reduces the
recording of duplicate data on the blockchain
and mitigates the need for individual operators
to each upload their own event data for
identical events. FansUnite achieves this by
creating consistent shared processes for all
Protocol participants dictating the efficient and
organized storage of league, team, and event
data. These unique structures’ identifiers will be
stored on-chain with tertiary details stored on
IPFS. For implementation specifics surrounding
these standardized structures and the uniform
Core Aspects
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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nomenclature that will be used to catalogue
and access this data, please refer to section
5. FansUnite will also implement an “off-chain
relayer on-chain settlement” model similar
to 0x to decrease the number of transactions
and eliminate the need for books to store and
update rapidly fluctuating information like line
movements on-chain.
Community Governed.Any long-term blockchain betting and data
solution should implement tools that encourage
beneficial behaviours and which allow for
self-governance. On-chain decentralized
governance is still a heavily researched
subject and is an important component of
the FansUnite Protocol. Governance will be
implemented using an existing solution l such
as Aragon or Harbour. All necessary steps will
be taken to ensure the community is able to
determine the Protocol direction and roadmap.
Our token economy has been devised around
the premise that Oracles must be properly
incentivized to act in the best interests of
the Protocol. In spite of this, the network will
still need to be able to exercise discretion in
defining acceptable Oracle standards, adapting
to remove malicious actors on the network,
and determining the future roadmap for the
Protocol.
Regulatory Compliant.Regulation is an important foundational
requirement in the sports betting industry
and any successful protocol must respect
applicable legislation in order to obtain
widespread adoption. Although we feel
strongly about facilitating decentralization,
we also believe there is a social responsibility
to prevent underage gambling, money
laundering, gambling addictions and adhere
to gambling laws in each jurisdiction. With this
in mind, Know Your Customer (KYC) and Anti-
Money Laundering (AML) solutions must be
implemented into the protocol. There are many
identity protocols that are under development,
such as uPort or Civic, and depending on the
maturity of their technology at the time of
implementation, we will partner with a solution
that makes sense. Properly validated addresses
will have to be whitelisted with the applicable
betting contract in order for it to accept any
transactions from such address. We attempt
to find a middle ground between bettor
anonymity and compliance by utilizing a third
party product to perform KYC and AML checks.
Regulatory authorities would have the ability
audit samples of users from these third parties,
while operators would only be privy to whether
users were whitelisted in their jurisdictions or
not.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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4.0 - Technical Architecture
The FansUnite Protocol is comprised of the following:
4.1 - Smarts ContractsThe primary feature of the FansUnite Protocol is the use of the blockchain to facilitate decentralized
betting between two parties that is secure, transparent and fair. The Ethereum blockchain is used as
a distributed database to store the required information necessary to settle a bet. Smart contracts are
also used to escrow tokens to cover each party’s risk, guaranteeing sufficient tokens for all winning
parties can be paid out.
Further, if blockchain-based betting is to be fully decentralized, a single point of truth cannot be used
to provide the outcome of an event. The FansUnite Protocol will utilize a network of independently
operated oracles to provide the data that will ultimately grade a bet. These oracles will be incentivised
and rewarded for providing fast and accurate data, with the reward based on the betting volume of
that specific event. These oracles will, through smart contracts, stake FAN tokens, earning or losing
reputation dependent on whether their data is ultimately correct or not.
A dispute system will also be developed using smart contracts. This will allow bettors to challenge the
result provided by the oracle network if they believe an event was resolved incorrectly. FAN Tokens
are required to be staked to initiate a dispute. For more information see Section 5.5.1.
4.2 - InterPlanetary File System (IPFS)InterPlanetary File System (IPFS) is a peer-to-peer distributed file system. Storage on IPFS is
significantly cheaper than storing on the the Ethereum blockchain and allows the Protocol to record
metadata about participants, events and leagues that are not critical to grading a bet. Data on IPFS
is referenced by a unique cryptographic hash that will be stored on the blockchain. The additional
metadata will be a resource for developers to create content rich DApps.
Solidity Smart Contracts
InterPlanetary File System (IPFS)
Developer Tools - FansUnite.js Javascript Library
Event Listing and Oracle management DApp
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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4.3 - Developer Tools - FansUnite.js Javascript LibraryA JavaScript library (FansUnite.js) is being created which is an abstraction layer to easily interact with
the underlying smart contracts. The JavaScript library will aid in fostering and accelerating adoption
of the protocol.
4.4 Event Listing and Oracle Network DAppThe large diverse oracle network will allow for a fully decentralized system. To facilitate initial adoption,
a DApp is being released that will let anyone easily create an oracle, manually stake, provide data and
earn a percentage of Ethereum-based tokens that is wagered through the Protocol. Additionally, this
DApp will list all the created events/markets and allow for operators to create new events/markets.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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5.0 - Technical Procedures
5.1 - Event and Custom Market CreationEvery bet must reference one or more events (or a custom market) as the outcome of events is used
for grading the bets. The event schema has been designed to accommodate all sporting events and
is defined in Table 1.
Critical parameters required to grade all the various bet types are recorded on the smart contract.
Additional parameters that help describe the event are stored using IPFS and cryptographically
linked to the event on the smart contract.
Events can be created by sending transactions directly to the smart contract. However, to drive initial
adoption and reduce friction for operators and non-technical users, a DApp will be released utilizing
our abstraction layer (FansUnite.js), that will allow for easy interaction with the smart contracts.
5.1.1 - Minimizing Duplicate EventsOperators are encouraged to use events that have already been created, thus reducing their cost
while simultaneously minimizing strain on the Ethereum network. The event listing DApp will display
all events already created, helping operators minimize the likelihood of creating duplicate events.
The long term goal is for all parties on the Protocol (bettors, operators & oracles) to always agree
on the exact same event. Additional functionality will be built into the event smart contracts to
reduce the likelihood of duplicate events. This additional functionality will be achieved by creating a
unique ID hashing specific parameters such as participant IDs and event start time and preventing
a duplication of that ID from being stored.
5.1.2 - Custom MarketsIn order to satisfy all markets that a traditional bookmaker offers, the Protocol will allow for custom
markets to be created. Custom markets traditionally will fall into one of the following categories:
Binary outcome - Wether a given outcome does or does not occur; and
Multiple outcomes - Which outcome out of a list of outcomes occurs.
Custom markets can be associated with sporting events, but it is not necessary. The creator of the
custom market will also have to provide the possible outcomes.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Parameter Data Type Constraint Description
participantIds bytes32 (array) required List of all participants IDs competing in the event
minPeriods uint required The minimum number of periods of an event
maxPeriods uint required The maximum number of periods of an event
startTime uint required Time and date of when the event begins
extraPeriodsBeginAt uint optional The period at which extra time / overtime begins
shootout boolean required An indicator for whether the event can potentially end in a shootout if the score is equal after the maxPeriods
draw boolean required An indicator for whether an event can potentially end in a draw
homeParticipant bytes32 optional The participant id of the home team
leagueId bytes32 optional The ID of the league of which the event is part of
sportId bytes32 optional The ID of the sport of which the event is part of
Table 1: Event Schema Definition
5.2 - Bet SubmissionDecentralized bookmaking shares many characteristics with decentralized trading. As such,
components of the FansUnite Protocol are inspired by the 0x project. Bookmakers offer betting odds
on a plethora of markets and events, with odds that constantly change depending on the amount
that is wagered on each side. With the current state of Ethereum, storing these changing odds on
the blockchain is costly and inefficient. Inspired by 0x, a messaging system using off-chain relaying
and on-chain submission/settlement will be implemented that will allow for bookmakers to offer
traditional markets and their associated dynamic odds and betting exchanges to display all offers
prior to submitting them to the blockchain. All bets are ultimately submitted to the betting smart
contract and tokens are automatically escrowed.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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5.2.1 - Messaging SystemThe messaging format outlined in Table 2 allows for any Ethereum-based token to be wagered and is
applicable for both traditional bookmaking (such as Bet365) and betting exchanges (such as BetFair).
For any bet to occur, it requires a Backer and a Layer. In traditional bookmaking the customer is the
Backer (bets that an outcome will occur) and the bookmaker is the Layer (bets that the outcome
will not occur). Betting exchanges allow for anyone to be the Layer or Backer. The ability to service
both use cases is important for the long term success and adoption of trustless decentralized sports
betting.
Traditional BookmakingThe process for a bookmaker to accept a bet is outlined below:
Backer (bettor) and Layer (bookmaker) approves the betting contract to access their balance
of the token they want to wager;
Backer creates a message (message format shown in Table 2) and signs the order with their
private key;
Backer broadcasts the message to the Layer;
Layer receives the message and confirms that the parameters are consistent with their
offerings; and
If the parameters match, then the Layer submits the message to the betting contract.
This approach allows bookmakers to offer a traditional experience with each bet ultimately being
submitted and settled on the blockchain. Gas fees will be incurred by the bookmaker, thus not
requiring the customer to pay additional gas fees and hold Ether (ETH).
Betting ExchangesThe process for a betting exchange to facilitate a bet is outlined below:
The Betting Exchange cites a fee schedule and the address they will use to collect transaction
fees;
Backer creates a bet, sets the backerFee and layerFee to values that satisfy the Betting
Exchange’s fee schedule, sets the feeRecipient to the Betting Exchanges desired receiving
address and signs the bet with their private key;
Backer transmits the signed bet to the Betting Exchange;
The Betting Exchange receives the bet, checks that the bet is valid and that it provides the
required fees. If the bet is invalid and does not meet the Betting Exchange’s requirements,
the bet is rejected. If it is satisfactory, the Betting Exchange posts the bet for layers to accept;
If the parameters match, then the Layer submits the message to the betting contract;
Layers receive an updated version of all available bets; and
Layer matches the Backer’s bet by submitting it to the betting smart contract.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Parameter Data Type Constraint Description
backer address required Ethereum address of backer
layer address required Ethereum address of layer
backerToken address required Ethereum address of the ERC20 token that the backer is staking
layerToken address required Ethereum address of the ERC20 token that the layer is staking
feeRecipient address optional Ethereum address of Betting Exchange that is charging the transaction fee
betContractAddress address required The betting smart contract address
backerFee uint optional How many FAN tokens the backer will pay the feeRecipient (betting exchange)
layerFee uint optional How many FAN tokens the layer will pay the feeRecipient (betting exchange)
backerTokenStake uint required How many ERC20 tokens the backer is staking
layerTokenStake uint required How many ERC20 tokens the layer is staking
period uint required The period at which the bet ends at, such as 1st period, 1st half, or full game.
eventId bytes32 required Event ID hash
betType uint required Type of bet, such as moneyline, spread, total points or team total points.
participantId uint optional Participant ID (required for moneyline, spread and team total bet types)
points uint optional Required for total points and team total point bet types
overUnder uint optional 1 = over, 0 = under
expiration uint required Time at which the offer expires
resultIfDraw uint required Identifies whether a draw results in a win, loss, or push
VRS
uintbytes32bytes32
required Elliptic Curve Digital Signature Algorithm (ECDSA) signature of the above arguments
Table 2: Bet Messaging Format
Copyright © 2018 FansUnite Limited. All Rights Reserved.
21
5.2.2 - Token Escrow CalculationThe number of tokens that is required to be escrowed into the smart contract when a bet is made is
equivalent to the exposure that that address is subject to. For a sports book operator who often lays
both sides of a bet, it is not necessary to escrow tokens to match every wager. As long as they have
escrowed enough tokens to cover their exposure, all parties are guaranteed to be paid out.
A running total of each party’s exposure will be calculated and recorded on the smart contracts. If
a party is attempting to lay a bet and the total tokens escrowed into the betting contract is below
their total exposure, the additional tokens needed will automatically be escrowed from their wallet.
If their wallet does not have the required tokens or allowance, then the bet will not be accepted and
any actions associated with that account is halted.
Please see Appendix 1 for Token Exposure calculation.
5.2.3 - Partial MatchingWith betting exchanges, bettors may not always want to lay/back the entire offer which would result
in offers being partially matched. The ability to allow for partial matching is a critical function for
betting exchanges. The FansUnite Protocol allows for partial matching by requiring the addition of
a parameter to the smart contract which indicates the desired amount that the layer is wanting to
match (layerTokenAmount). The betting smart contract will automatically update the amount of
tokens remaining and allow for multiple offers to be matched until the offer has been satisfied or
expired.
Additional functionality common with betting exchanges is the ability to cancel the remainder of
a partially matched bet and the ability to change the offering odds to attract layers to match the
remaining stake. Both these functionalities will be implemented in the betting smart contract. The
original backer will have to send a transaction to the smart contract indicating they want to cancel
or change the odds on the remaining offer and will be required to pay the appropriate gas.
5.2.4 - KYC / AML ImplementationAlthough idealistically we support personal freedom and betting anonymity, we also believe there
is a social responsibility to prevent underage gambling, money laundering, and gambling addiction
by adhering to gambling laws in each jurisdiction. Know Your Customer (KYC) and Anti-Money
Laundering (AML) will be implemented into the Protocol. There are many identity protocols that are
under development, such as uPort or Civic, and depending on the maturity of their technology at the
time of implementation, we will decide which solution makes sense. Properly validated addresses
will have to be whitelisted on the betting contract in order for it to accept any transactions.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
22
5.3 - Event ResolutionA network of incentivized oracles are employed to provide the requisite event data for market
resolution. To foster initial adoption, a DApp is being created which allows anyone with the required
stake of FAN to become an oracle and manually input event data for an event. Tech savvy developers
can send event data directly to the smart contract or use our abstraction layer to programmatically
send their results. The format of the event data depends on the parameters initially set for the
event.
5.3.1 - Oracle Staking and RewardOracles stake FAN tokens to be eligible to provide event data that is ultimately used to grade wagers.
If an Oracle provides data that is part of the consensus and the data is deemed as the correct result,
the FAN tokens staked by the oracle are returned and the Oracle earns a reward proportional to the
amount they staked, their reputation and the timeliness of the data provided. Oracles that provide
data that is not part of the consensus and ultimately deemed as incorrect, will lose their FAN token
stake and their reputability score will decrease. The tokens that were staked will be transferred to
the Contingency Reserve Fund which is used as a final failsafe to pay out wagers that were graded
incorrectly, for more see Section 5.5.3. The risk of losing tokens incentivises the Oracles to act
appropriately and provide accurate results. As betting volume increases, the total number of oracles
and the number of tokens staked will increase and the network will become more distributed.
It is not clear what level of incentivization grows the network efficiently. Too much incentivization
adds unnecessary tax to the Ethereum network, while too little incentive might result in a quorum
that is not resistant to false-positives. Our approach is to optimize the incentivization so to maximize
the average and minimize the variance of the reputabilities distribution of the whole pool of Oracles.
For this purpose, to each Oracle will be associated with a reputability score which reflects the
accuracy of the information provided by the Oracle with respect to the quorum in past resolutions.
For further details on the calculations relating to stake requirement, time incentivization and Oracle
quorum selection, please review Appendix 2.
5.3.2 - Oracle ConsensusConsensus is not determined solely via majority vote. The Oracles’ votes will be weighted by their
reputability score. This prevents a batch of bad actors with low reputation scores or a short history
of providing data from prevailing over a smaller but more reputable batch of good nodes. For more
details on the consensus weighting calculation, please review Appendix 3.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
24
5.3.3 - Oracle ReputationTo each Oracle will be associated a reputability based on the proportion of correct and incorrect
data (as defined by agreement with consensus) is provided. To incentivize oracles to provide correct
information, incorrect information will be weighted more in the reputability calculation. Figure
2 shows how the oracles are incentivized to maintain high reputability scores: oracles with low
reputation will, in the long run, have lower, if not negative, ROIs. For oracles with high reputability the
variance around the mean ROI is minimized and a steady gain is realized in the long run. Please see
Appendix 4 for more information pertaining to the Oracle reputation calculation.
5.4 - Bet GradingFor each unique address, a Protocol betting smart contract will record the following:
Token Balance - The total number of tokens that the account has escrowed and/or won; and
Exposure - The total number of tokens that the account is potentially liable for (see Section
5.2.2);
Once consensus has been reached by the selection of Oracles, the outcome of the event is determined
and the event will be flagged as resolved. Parties will then be able to send a transaction to the smart
contract that would grade their bet and update the token balance and exposure for the parties
involved in that bet. The smart contract will contain all the logic to correctly determine the rightful
winner based on the bet type, event parameters and the data provided by the Oracle consensus.
5.4.1 - Bet Resolution LibraryBets, in their simplest form, fall into one of the following three types:
Boolean - The outcome occurs or does not occur;
Differential - The difference between two values and whether it was greater or less than; and
Totals - The summation of values and whether it was over or under.
Common smart contract libraries will be used to perform routine operations such as grading wagers.
The use of only one Bet Resolution smart contract library ensures that bets are graded identically
and transparently across the entire protocol. Library deployments will be structured in a way that
maintains the ability to upgrade them. This is important as Solidity is still a relatively immature
language and future solutions may be more efficient. Additionally, maintaining the ability to upgrade
will allow for more sophisticated bet types to be implemented as the platform matures and new bet
types arise. Deployment of new libraries will be governed by token holders as discussed in Section
6.1.1.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
25
5.5 - Incorrectly Graded WagersThe FansUnite Protocol allows parties to grade bets and update token balances at the moment
Oracles reach consensus. This approach emphasizes speed of bet resolution, which is critical for
sports bettors. However, there may be scenarios when the results for an event are wrongfully reported
and bets are incorrectly graded. A dispute process will be used to handle incorrectly graded bets.
Parties will be subject to a withdrawal allowance that will reduce the severity of bad actors and a
Contingency Reserve Fund will be used as a last resort fail-safe to guarantee rightful winners are
made whole.
5.5.1 - Dispute ProcessBetting parties have a window of 48 hours to initiate a dispute. After this 48 hour window, the event
will be deemed final and the oracles stakes will be returned. To initiate a dispute, the disputer or
disputers must suggest a result they believe to be correct and stake a total amount of FAN tokens
equal to the current oracle reward for that event. Any bets that have not yet been graded on that
event will be temporarily halted from being graded until the dispute has been resolved to prevent
others from wrongfully claiming bets. Once a dispute has been initiated, a new selection of oracles
will be notified to provide results for the event. The staked FAN tokens from the disputers is used as a
potential reward for the new selection of oracles. Consensus is reached using the same methodology
described in Section 5.3.2.
If the consensus from the new selection of oracles is equal to the suggested result from the disputers,
the dispute will be deemed successful and the following will occur:
Disputers stakes are returned;
Reward for the event is distributed to the new selection of oracles;
The initial Oracle selection will lose their stakes for providing incorrect results. These stakes
are transferred to the Contingency Reserve Fund;
The initial oracles will lose reputation; and
Parties that were involved with the incorrectly graded bets will be able to regrade their bets
which will update their token balances and exposure.
If the consensus from the new selection of Oracles equals the same results from the original
consensus, the dispute will be deemed as unsuccessful and the following will occur:
Disputers stakes are distributed to the new oracles as a reward;
Reward from the original oracle selection remains;
Original oracle selection does not lose any reputation; and
Disputers lose reputation.
Alternatively, if the consensus from the new selection of Oracles does not equal the results from the
original consensus and also does not match the result suggested by the disputers, the dispute will
also be deemed as unsuccessful. The result from the new selection of Oracles will be considered the
correct result and will be used to grade the wagers.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
26
5.5.2 - Withdrawal AllowanceOnce the event has exceeded the 48 hour dispute time-frame, the entire winnings/initial stake can
be withdrawn from the betting smart contract. Prior to the 48 hour dispute time-frame, the number
of tokens that can be withdrawn from a winning bet will be calculated based on token withdrawal
allowance function, please see Appendix 5.
Although the bettor is unable to withdraw the entire amount of winning tokens prior to the 48-
hour dispute time-frame, they can still continue to bet their winnings. If at any time a dispute arises,
the party will be subject to additional exposure and will be required to have a token balance that
is greater than or equal to their exposure. The betting smart contract will automatically escrow
additional tokens if the the owner has provided the required allowance and that the owner also has
enough tokens in their wallet. A party must always have a token balance greater than their exposure
in order to participate in the network.
5.5.3 - Contingency Reserve FundThere is the case that a party withdraws a portion of tokens from a bet that was disputed and
ultimately regraded and the party is unwilling or unable to escrow additional tokens to cover their
exposure. A Contingency Reserve Fund (CRF) will be used to make wrongful parties whole in this
scenario. The CRF will be initially seeded and further contributed to by loss stakes from oracles that
provide incorrect data.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
27
Copyright © 2017 FansUnite Limited. All Rights Reserved.
27
6.0 - FansUnite Token
The FAN token will serve the following purposes:
Decentralized governance on Protocol decisions;
Betting exchange transaction fees;
The required token for staking by Oracles;
Resolution dispute staking;
Contingency Reserve Fund; and
Incentivise Oracles to provide accurate and low latency sports data.
6.1 - GovernanceDecentralized governance is an integral part of the longevity and success of the Protocol. Token
holders will have a proportional vote on development updates.
6.1.1 - Protocol UpgradesPeriodic upgrades and improvements to the smart contracts powering the underlying logic of the
Protocol are necessary. Ethereum smart contracts are immutable and once deployed, the code
cannot be changed. However, several smart contracts can be combined and structured in a way that
allows for the underlying logic to be upgraded. Upgrading must be done in a fair and transparent
way that doesn’t negatively impact stakeholders. As such, a voting system will be implemented to
decide how and when new code will be implemented and deployed.
On-chain decentralized governance is still a heavily researched subject. While governance is an
important component of the Protocol, it is also not part of our core business and we will lean on the
expertise of a partner organization such as Aragon or Harbour for proper implementation.
Community governance will be undertaken in phases with a gradual roll-out of functionality to the
Community. These phases will be announced at a later date.
6.2 - DApp Transaction FeesThe protocol allows for DApps to charge fees in FAN tokens. DApps can cite their own fee schedule
using any sort of method they choose, such as a flat rate or a rate dependent on the volume wagered.
Although the Protocol allows for fees, DApps aren’t required to charge transaction fees.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
28
Copyright © 2017 FansUnite Limited. All Rights Reserved.
28
6.3 - Resolution Dispute StakingFAN tokens are required to be staked to initiate a dispute if one of the wagering parties believe
that the Oracle network reached an incorrect consensus. Staking is used for a potential reward for
Oracles who provided the correct data and for the prevention of frivolous disputes.
6.4 - Contingency Reserve FundFAN tokens are accumulated in a Contingency Reserve Fund (CRF) to pay out successful disputes
where one party decides not to return wrongfully claimed tokens. The reputation system is used to
deter bad actors while the CRF is only used as a fail-safe.
6.5 - Oracle StakingOracles are required to stake FAN tokens to be eligible to provide event data that is ultimately used
to resolve wagers. Oracles earn a reward proportional to the amount of FAN tokens they staked, their
reputation and the timeliness of the data provided. See Section 5.3.1 for more details.
29
Copyright © 2017 FansUnite Limited. All Rights Reserved.
7.0 - Roadmap
April 2018Announce FansUnite Protocol and publish original version of White Paper and Business Case.
June 2018Funds raised allowed rapid expansion of data
science and development teams.
July 2018Launched World Cup proof of concept on Kovan
Testnet, see it here.
Q3 2018Announce major partnerships with professional
sports franchise and international poker brand.
Q3 2018Open-source Smart Contract Repository and JS
Library.
Q4 2018Launch Token Sale.
30
Copyright © 2017 FansUnite Limited. All Rights Reserved.
7.0 - Roadmap
Q4 2018Launch Betting Functionality for Protocol and
take first bets on the FansUnite Sportsbook with
centralized resolution.
Q1 2019Release Oracle Resolution on Test Network in
conjunction with open-source Oracle solution for
nodes to deploy.
Q2 - Q3 2019Release Oracle resolution on Main Network.
Budgeting several months of testing on Testnet
for the Oracle resolution as this is an integral
component for disintermediated betting.
Q4 2018Launch Token Sale.
Q3 2019Release native mobile apps for iOS and Android.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
31
8.0 - Business Plan
8.1 - Market FactorsThe market for this platform is massive. The European Gaming and Betting Association (EGBA)
published a report in 2014 estimating that the current total market size for sports betting globally
exceeds $1 trillion per annum. Furthermore, legal sports betting profits are estimated at just over
$70 billion in 2016, a 20% increase since 2012 1. Numerous other macroeconomic factors suggest
exponential growth for the industry in the near term, including:
US repeal of federal legislation prohibiting sports betting. The US market is estimated to be
worth anywhere up to $70 billion in revenue annually 2.
Improved penetration of smart phones and high-speed broadband connections is allowing
for previously unreachable populations, like those in developing countries such as Africa, to
bet on sports 3.
Improved WiFi and broadband networks increasingly allow for bettors to participate in
lucrative markets for sportsbooks including live in-play betting 4.
Increased accessibility to online gambling attracts younger demographics of sports bettor - a
demographic that is also more likely to adopt and hold cryptocurrency. The average age of a
land-based sports bettor is 45 years, while the average age group of an online sports bettor
is 38 years 4. A third of millennials say they plan to own cryptocurrency in the next 5 years 5.
eSports betting is growing at an unprecedented rate, with Pinnacle stating that they expect
to hit 10 million bets on eSports by the end of this year - it took them from 2010 through 2016
to hit their first million 6. eSports will represent an entirely new demographic of bettors who
may not have historically followed or bet on sports.
“Sports betting report | EGBA.” http://www.egba.eu/
facts-and-figures/studies/6-sports-betting-report/.
“Market for illegal sports betting in US is not
really a $150 billion business.” 14 May. 2018, http://
theconversation.com/market-for-illegal-sports-betting-
in-us-is-not-really-a-150-billion-business-96618.
“Betting industry emerging as a major player in the
mobile money ....” 31 Jul. 2018, http://techtrendske.co.ke/
betting-industry-major-player-mobile-money-industry/.
“Top 4 Emerging Trends Impacting the Sports
Betting ... - Business Wire.” 19 Oct. 2016, https://www.
businesswire.com/news/home/20161019005427/en/
Top-4-Emerging-Trends-Impacting-Sports-Betting.
“Millennials more likely to invest in cryptocurrency,
study finds.” https://www.cointelligence.com/content/
millennials-more-likely-to-invest-in-cryptocurrency-
study-finds/.
“The Rise of eSports Betting & Gambling - Business
Insider.” 9 Jan. 2018, http://uk.businessinsider.com/the-
rise-of-esports-betting-and-gambling-2018-1.
1
2
3
4
5
6
Sports betting in the United States is estimated to be worth
in annual revenue
$ 70B
32
Copyright © 2017 FansUnite Limited. All Rights Reserved.
FansUnite Media Inc.Owner of IP relating to the fansunite.com domain, the free-to-play social betting platform. This
platform will continue to be maintained and updated to serve as an educational platform and
introductory tool for novice bettors.
FansUnite Venture StudioFansUnite is currently building out its’ Venture Studio to fund and develop new DApps specifically
to leverage the FansUnite Protocol. FansUnite has assembled an in-house team of engineers and
evangelists in the Ethereum developer community committed to developing this decentralized
sports betting future we envision.
Oracle ServiceThe Oracle network will provide low-latency and accurate event data, incentivized by a percentage
of the betting volume processed, while utilizing blockchain technology to deliver efficient pricing
and transparent market information. Subject to regulatory approval, FansUnite will offer an Oracles
as a Service option, allowing for token holders to participate in a proportional percentage of Oracle
rewards.
FansUnite LimitedLicensed gaming arm incorporated in Gibraltar which will hold all IP relating to the FansUnite
Sportsbook, as well as, serve as the issuing entity for the sale of FansUnite tokens (FAN).
8.2 - Corporate Structure
Copyright © 2018 FansUnite Limited. All Rights Reserved.
33
Copyright © 2017 FansUnite Limited. All Rights Reserved.
33
8.3 - Token Supply & Distribution
Public Sale - 50%
Partner & Affiliate Incentivization - 20%
Sportsbook Liquidity - 15%
Team Stake - 15%
8.4 - Use of Proceeds
Platform Development - 40%
Business Development - 15%
Legal & Accounting - 10%
Marketing - 25%
Licenses - 10%
Copyright © 2018 FansUnite Limited. All Rights Reserved.
34
A chartered accountant by trade, Darius is a
serial entrepreneur, investor, and sports junkie.
He has previously founded and/or led multiple
businesses in digital, data analytics, and
consumer internet. Darius has been involved
in the sports betting industry since 2008 and
has been the CEO of FansUnite since 2012.
His goal and passion with FansUnite was to
create a community of sports bettors working
together to beat the house. Darius has
extensive experience managing companies,
raising capital, as well as developing overall
vision and business frameworks. Darius
was recently named Canada’s next 150 top
entrepreneurs by the TMX Group.
Duncan is a practicing lawyer and investor,
experienced in mergers, acquisitions and
various other corporate matters. He is Chief
Operating Officer of FansUnite Entertainment
Inc. and a cofounder of FansUnite. Duncan
has over a decade of experience in sports
betting and data analytics, with substantial
involvement in product development,
overseeing daily operations and business
development across several ventures. Duncan
is excited about working with the community
to build a platform that finally levels the
playing field and gives every member a sense
of security when placing a bet.
Darius Eghdami
CEO, FansUnite Entertainment Inc.
Duncan McIntyre
COO, FansUnite Entertainment Inc.
9.0 - Team
Graeme is a Big 4 trained Chartered Accountant
and Masters of Professional Accounting who
has extensive experience scaling finance
departments through explosive growth. His
last role saw him oversee financial reporting,
financial analysis and internal controls at a
radidly growing tech company. His leadership,
business acumen and analytical mind prove
invaluable to our team daily.
Graeme Moore
CFO, FansUnite Entertainment Inc.
Stephen is a veteren in the field of Machine
Learning and studies the efficiency of global
gambling markets and sports data economics.
Stephen ensures the stability of our business
by automating the production of efficient
market prices and creating a gold standard for
oddsmaking under the FansUnite Brand. An
exceptional developer, he is versed in C++, Java,
Elixir and Python having worked at Amazon.
com and Dwave Quantum computers as a
quantum programmer.
Stephen Rothwell
Head Trader, FansUnite
Entertainment Inc.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
35
Mirko is an expert in the field of mathematical
modeling, machine learning and statistical
analysis. His ability to take complex real
world scenarios and distill them down into
relevant and understandable mathematical
models has proven invaluable to our team.
He’s acquired experience in natural language
processing, machine learning and data
science implementing SVMs, Naïve Bayes
and Deep Learning classifiers working on
projects for companies like Best Buy and
Translink. Mirko has an in-depth knowledge
of data science libraries such as scikit-learn,
keras and tensorflow and is also a proficient
programmer who primarily codes in C++ and
Python.
Ryan is a software developer by trade and
has applied his technical expertise to the
sports betting industry for the last five years.
He’s played a pivotal role in many early stage
startups taking on the role of project manager,
technical lead and software developer. Ryan is
well versed in many programming languages
such as python, PHP, Javascript, C#, Solidity
and has launched full stack solutions for many
companies. He’s a longtime proponent of
decentralization and blockchain technology.
Mirko Miorelli, PhD.
Data Scientist, FansUnite
Entertainment Inc.
Ryan Cimoszko
Technical Lead, FansUnite
Entertainment Inc.
Eric is a blockchain academic who wrote
his Computer Science Masters thesis on
Equity Crowdfunding with distributed ledger
technology. He is particularly interested in
functional programming having experience
with Haskell and Erlang and how they
contribute to scalable, maintainable
applications. Eric’s prior work experience saw
him oversee a team charged with building
several proof of concept builds at a leading
blockchain consultancy. His leadership and
ability to architect scalable solutions that
leverage distributed computing are highly
applicable to our use-case.
Eric Ren
Solidity Developer, FansUnite Entertainment Inc.
Manan is an open-source and decentralized
applications enthusiast who has been
developing Ethereum DApps professionally for
over a year. He is highly proficient with Solidity,
operating as Blockchain Development Team
Lead in his prior role, and his passion for concise,
scalable code is evident in his programming.
He is proficient in Python and Golang and has
a diverse array of knowledge spanning cloud-
based services and dev-ops.
Manan Mehta
Solidity Developer, FansUnite
Entertainment Inc.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
36
Jon is a former Chartered Accountant
turned web developer, he has experience
programming in PHP, Javascript and Python.
He has worked on countless features at
FansUnite spanning API development, natural
language processing with chat bots and
mobile app development.
Jon Ingoldby
Developer, FansUnite
Entertainment Inc.
Mark-Daniel was previously a cryptocurrency
analyst with a focus on market research,
fundamental and technical analysis. He has
advised multi-national VC firms looking
to expand their business reach through
cryptocurrency mining, blockchain enterprises
ICOs and STOs. Mark-Daniel has been hired by
numerous small businesses and cryptocurrency
enthusiasts to engage in market research and
provide investment analysis.
Mark-Daniel Hughes
Market Development,
FansUnite Entertainment Inc.
Justin is a digital marketing and social media
specialist with a focus in sports, tech, finance
and entertainment. Justin has devised
and implemented creative, innovative and
relatable marketing and media campaigns
for companies ranging from small startups to
multi-national corporations, including many
in the gaming space. He delivers quantitative
results, drives online video views, oversees
partnerships, generates leads and sales
conversions. His experience as former Executive
Director of Communications at Fox Sports
Net, as well as his extensive background with
social media influencer marketing will prove a
huge boon to the promotion of FansUnite.
Justin Simon
Marketing Lead, FansUnite
Entertainment Inc.
Shafin Diamond Tejani is one of the most
respected entrepreneurs and philanthropists in
Canada. Shafin launched his first company, an
online dating website, from his University dorm
room at the age of 19. Since then, through his
venture Victory Square Labs, he has launched
over 40 startups in 21 different countries,
employing over 350 people and generating
over $100 million in annual revenues. In 2014,
Shafin was named Angel Investor of the Year
by Angel Forum. In 2015, Shafin was named the
Ernst & Young Canadian Tech Entrepreneur of
the Year. In 2017 Shafin was named Person of
the Year at the BC Technology Impact awards.
Shafin is also British Columbia’s Top 40 under 40
winner and the recipient of the Prime Minister’s
Volunteer Award. Shafin is extremely excited
about FansUnite and bringing his expertise in
growth marketing and scaling companies to
the platform.
Shafin Diamond Tejani
CEO, Victory Square Technologies
Advisors
Copyright © 2018 FansUnite Limited. All Rights Reserved.
37
Peter Kroll is recognized as a pioneer in
the cryptocurrency security space, with
his greatest contribution to the field of
cryptocurrency-based security being the
invention of the first bitcoin paper wallet at
bitaddress.org. Peter is a serial entrepreneur
and computer science major at Wilfrid
Laurier University. He has over 9 years of
sports betting industry experience, working
with Pinnacle as a developer, team leader
and development manager. As a veteran
of the sports-betting industry, a long time
technologist, and an open-source contributor
to the cryptocurrency community, Peter’s
ability to provide insight on both operational
and technical aspects of the Protocol is
immeasurable.
Matt Lockyer wrote the Ethereum ERC-998
standard for Composable Tokens and his
work on Token Curated Registries (TCRs)
has been published on a16z’s crypto reading
list. Matt founded and operates the NFTy
Magicians - a group of over 300 blockchain
developers - as a pendant to the Ethereum
Foundation. He currently advises projects on
their smart contract architecture and token
engineering processes with a background in
full stack development, computer science,
UX research, public speaking and university
lecturing.
Peter Kroll
Fmr. Development
Manager, Pinnacle Sports
Matt Lockyer
Fmr Head of Blockchain,
Vanbex Group.
Ryan played in the NFL for eight seasons,
winning a championship in Super Bowl
XLIII with the Pittsburgh Steelers. He is the
Managing Director of Techlete Ventures, an
alternative asset management company that
invests in venture capital, private equity and
digital asset opportunities. Ryan also currently
serves on the Athlete Advisory Board for the
NFLPA (NFL Players Association) One Team
Collective, helping businesses incorporate
sports sports strategies to drive growth.
Ryan Mundy
NFLPA Advisory Board
Partner, Techlete Ventures
Chris founded one of the industry’s most
popular domestic and international gaming
brands, DeepStacks. Ten years later, the
World Poker Tour acquired DeepStacks and
Chris was brought on as Executive Director
of WPTDeepStacks, the premier mid-major
poker tour in the world. Chris is responsible
for the rebranding and successful relaunch
of the World Poker Tour’s European tour
division as well as the expansion of WPTDS
operations throughout North America. Under
his leadership, WPTDS received the American
Poker Award for 2017/2018 “Mid-Major Circuit
of the Year.” His extensive knowledge of
the gaming industry and experience in
working with some of the most respected
organizations in the world will prove
invaluable with our efforts to partner with
established operators throughout Europe
and North America.
Chris Torina
Executive Director, World Poker Tour DeepStacks
Copyright © 2018 FansUnite Limited. All Rights Reserved.
38
Peter is an entrepreneur, investor and
consultant, and has over 25 years’ experience
in the technology industry. These include
enterprise software and hardware, security,
gaming, payment processing, e-commerce,
business development, strategic sales, channel
and partnership, cloud brokerages, robotics,
and augmented reality. Further, Peter is actively
involved in the technology sector, advising
companies on sustainable growth and scaling
commercialization activities.
Gary is an entrepreneur, executive leader, and
mentor and was the Chief Revenue Officer
for Canada’s first publicly traded blockchain
company, BTL Group Ltd (TSXV: BTL). He
is currently CEO of the Sports Technology
Group and has previously co-founded and
successfully exited multiple start-ups in
the technology space. As a creative and
entrepreneurial CEO, he has built teams
that have grown direct and indirect license
revenue channels on a global basis. He is
an accomplished business executive that
has cultivated key stakeholder relationships,
worked with a boards of directors,
shareholders and founders.
Peter Smyrniotis
CEO, Blockchain Assembly
Gary Boddington
Chief Commercialisation Officer, BTL Group Ltd.
Ron is a founding partner of Segev LLP. Segev
LLP has one of the leading iGaming legal teams
in the world. Ron is a specialized iGaming
lawyer and assists online gaming, social
gaming, skill games, sportsbooks, daily fantasy
sports, esports, v-sports, live-dealer, and other
gaming and betting clients worldwide with
their commercial, IP, transactional, licensing,
regulatory and compliance needs. Ron has
more than a decade of experience in the
iGaming sector and is widely sought as an
expert speaker on the topic. Ron is also a
General Member of the International Masters
of Gaming Law and has been published in
American Gaming Lawyer, Canadian Gaming
Lawyer, iGaming Business, and other leading
publications. Ron Segev is one of the top
iGaming lawyers in the world and he and
his team will guide FansUnite through all
applicable regulatory issues.
Ron Segev
Partner, Segev LLP
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39
10.0 - Summary
FansUnite - The Protocol for Betting ERC20 Tokens on Ethereum.
The sports betting and sports data industries have long been dominated by centralized entities
who charge high fees for the privilege of accessing their data or their liquidity in order to place a bet.
While the advent of the Internet significantly improved conditions for bettors, it also served to further
entrench large data monopolies atop the sports betting landscape. These monopolies successfully
leverage their disproportionate share of market information to efficiently price markets and out-
compete new market entrants, stifling innovation. Blockchain has the potential to significantly aid
the sports betting and sports data industries by facilitating equal and transparent access to market
data.
FansUnite is focused on bringing this vision to reality by providing the following:
a public library of smart contracts and standardized data structures that lowers technical thresholds
for developer and traditional operator adoption;
a token economy that incentivizes independently operated Oracles to provide low-latency data;
and
a free and token-agnostic protocol encourages adoption by allowing platforms to raise funds in
and utilize their own tokens.
By providing the necessary infrastructure for a disintermediated sports betting ecosystem on the
Ethereum blockchain, we will be able to successfully restore network effects, reduce duplicate
developer efforts, and democratize market information to all network participants. FansUnite will
provide a level playing field to new market entrants, encouraging new decentralized applications
and provide increased choice for bettors.
Copyright © 2017 FansUnite Limited. All Rights Reserved.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
40
Appendices
1.) Token Escrow Calculation
Exposure can be defined by the following formula.
Where represents the set of possible outcomes, e.g. {win, draw, lose}, and and are
defined as:
(2)
(3)
(1)
and are the betting volume and the total payout for outcome , respectively. Equations (2) and
(3) depend on the bet amount bet on the possible outcome by a bettor and from the
odds Of the possible outcome . The total number of bettors is denoted as and is the
outcome with the maximum payout, i.e.,
(4)
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41
2.) Oracle Stake and Reward Calculation
When participating in the resolution of an event, an oracle will have to stake an amount of tokens
inversely proportional to its reputability probability , i.e.
where is the reward for providing correct information and is a numerical coefficient which
tunes the penalization level for the low reputation oracles. The reward amount will be determined
once the betting volume for the event is known as
(5)
(6)
with the number of oracles and representing the percentage of the total betting volume
rewarded to the pool of oracles. From Eqs. (5) and (6) it is easy to see the ROI for an oracle
providing the correct information is equivalent to its reputability percentage. Since the reward
amount is fixed by Eq. (6) for an event, low reputability oracles will be required to stake more.
The number of oracles in the quorum is selected using the Kolmogorov-Smirnov (KS) test
between a sample from the oracles reputability distribution and the whole distribution itself. To
show how this works in practice, in the left panel of Figure 1 we assume the reputability distribution
to be normal in the interval [0, 1] with mean 0.95 and variance 0.3.
In the right panel of Figure 1, we plot the KS statistic between the full reputability probability
distribution (left panel) and distributions of varying sample size . The band represents the 95% CI
for the KS statistic and has been obtained using repeated simulations. A very low KS statistic means
we cannot confidently reject the null hypothesis, i.e., the hypothesis the two distributions are the
same. From Figure 1 we see that the KS statistic converges as we increase the sample size. Although
the more oracles, the better, at ≈ 100 we already have a reasonable convergence and the -value
is large enough so that we cannot confidently reject the null hypothesis. Based on the results of
Figure 1, for the next simulations we choose = 100 as the minimum number of oracles.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
42
3.) Oracle Consensus
4.) Oracle Reputation
Once the number of oracles and the volume of the event are set, the stake amounts are
determined using Eqs.(5) and (6). To investigate the possible ROI of an oracle, consider that the total
betting volume for March Madness in 2017 was estimated to be around 10 billion USD, meaning
roughly 140 million USD per game. Considering that the last games probably had more volume
than the first, we can assume a varying betting volume per game between 100-200 million USD.
Setting the amount of rewards to be split between the oracles to be of 0.25% of the total betting
volume of the game, and setting = 2 and = 100, in Figure 2 we show the ROI in USD for oracles
with different reputabilities. The curves have been obtained via Monte Carlo simulations and the
bands represent the 95% CI around the mean.
Consensus is not determined solely via majority vote. The oracles’ votes will be weighted by their
reputability score. This prevents a batch of M particularly bad oracles to prevail on a smaller batch of
N < M of very good ones. If we have two possible outcomes o = A,B, and oracles vote for either o = A
or o = B, a consensus score is calculated for both groups of oracles as
(7)
The consensus is then reached if any of the two scores is more than a threshold which can be set,
for example, at 80%.
To each oracle will be associated a reputability. The reputability probability Pi for an oracle i is
calculated as the ratio between the number of correct information Ci provided by the oracle itself
and the total number of times served as an oracle Ni. For the calculation of this ratio, only a limited
number Ni of the most recent previous resolutions will be considered and Pi will be updated after
each resolution. To incentivize oracles to provide correct information, incorrect information Ii will
be weighted more in the reputability calculation. Specifically, the reputability probability can be
calculated via
(8)
where ≥ 1 is a weight which tunes how much the reputability of incorrect oracles is penalized.
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Figure 1: Left panel – Assumed reputability probability distribution for the whole oracles’pool. Right panel
– KS statistic between the probability distribution in the left panel and different distributions sampled
randomly from the latter with varying sample size No. The colored band represents 95% CI around the KS
statistic value.
Figure 2: Possible ROI for stakers with different reputability as a function the number of games served as
oracles. The solid lines represent averages, while the bands are the 95% CI.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
44
5.) Token Withdrawal Allowance
Prior to the 48 hour dispute time-frame, the number of tokens that can be withdrawn from a
winning bet is calculated using the function:
(9)
There are numerous possible applications on the FansUnite Protocol, with a sportsbook and betting
exchange being amongst the most obvious. Below, we examine, in layman’s terms, the sports
book and betting exchange implementations. However, there are many decentralized applications
possible in this developer-driven ecosystem, which is limited only by the ingenuity of developers.
Sports Betting
Event CreationCheck smart contract event listing for existing unique eventId (eventId is
standardized hash of league info, participant info, date)
If event does not already exist, submit new event to league smart contract
Event will be added to list and is now available to be used across all DApps
on the protocol, uniquely identified by a standardized hash within a known
league smart contract address.
Bet CreationSportsbook operator lists events pulled from smart contract listing and the
bet types available on their application
Odds by a sportsbook operator can be set internally, however, odds are able to
be shaped from full market information of betting transactions made to that
point on the protocol, creating an efficient marketplace that is fair to all market
participants. With significant enough volume on the protocol, this process may
even be automated to further reduce cost to operators.
User selects a bet and submits betslip - this submits the bet details along with
a cryptographically secured hash of the original bet parameters including
amount, odds, event details. As this hash must be submitted by the relayer (in
this case the book) this ensures no subsequent tampering of the bet.
6.) Example Implementations
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Bet submission is checked for event details and odds are compared to available
odds on operator’s backend. If odds match the operator’s offered odds at the
time and event details are correct then the bet is submitted on-chain along
with cryptographically secured hash sent by bet layer.
Bet ResolutionQuorum is reached by oracle network (refer to White Paper for technical
details over implementation of this consensus mechanism - link) and the
result is posted to the event within a smart contract. This result triggers the
marking of this event as resolved.
Winning bettors are now able to claim their winnings by posting to this smart
contract and are checked against the array of winning bets and paid out.
DisputeIf the quorum reaches an incorrect result, an actual winning bettor would go
to claim their winnings and see that their claim wasn’t honoured - they would
then initiate a dispute and stake an amount of tokens. When the minimum
dispute quota is met, this causes the event to be flagged as disputed, and a
new quorum of oracles is selected to regrade the event.
Betting Exchange.
Event CreationCheck smart contract event listing for existing unique eventId (eventId is
standardized hash of league info, participant info, date)
If event does not already exist, submit new event to league smart contract
Event will be added to list and is now available to be used across all DApps
on the protocol, uniquely identified by a standardized hash within a known
league smart contract address.
Market CreationA bet layer would select an event on the betting exchange front-end and
submit their desired bet parameters to the exchange service. A cryptographic
hash of the bet parameters and the public key of the bet layer is created.
If the event parameters and fee requirements of the exchange are met, this
offer is listed on the exchange front-end to be matched by a bet taker.
Copyright © 2018 FansUnite Limited. All Rights Reserved.
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Betting Exchange ctd.
Bet Creation
The bet is posted on chain once a bet taker matches this bet and accepts the
wager and the original hash from the bet taker is unencrypted to ensure the
bet parameters are what was originally set.
Bet ResolutionQuorum is reached by Oracle network (refer to White Paper for technical
details over implementation of this consensus mechanism - link) and the result
is posted to the event within a smart contract. This triggers the marking of this
event as resolved. Winning bettors are able to claim their winnings by posting
to this smart contract and are checked against the array of winning bets and
paid out.
DisputeIf the quorum reaches an incorrect result, an actual winning bettor would go
to claim their winnings and see that their claim wasn’t honoured - they would
then initiate a dispute and stake an amount of tokens. When the minimum
dispute quota is met, this causes the event to be flagged as disputed, and a
new quorum of Oracles is selected to regrade the event.