Decentralized Models

All current decentralized models share one thing in common; they use a liquidity pool to create and modify odds. Centralized bookies offer 20-30 lines per game and they will take a $50,000 bet happily on any of these. However, the decentralized models have very low limits even on the biggest games. If someone wants to bet $50,000, they will get bad odds from the automated markets the liquidity pools operate on. There just isn’t enough liquidity to support the potential winnings on large bets with the split liquidity model. Adding lines will split the liquidity in the pool, so they can only offer a small set of lines or terrible betting limits. Neither of these are attractive to the customer.

A few decentralized competitors are operating on these split liquidity models. Polymarket, a Web3 based peer-to-peer information markets platform, uses the split liquidity model to allow betting on a wide array of topics, not just sports. Augur, another Web3 sports book, uses a centralized platform to settle odds, but has a religious obsession with decentralization on every other front. It is hosted on IPFS which for now comes with several detriments, one of which being it loads once every 10 refresh attempts, each of which take a couple minutes to resolve to know if it’s time to try a new refresh or if the site has loaded finally. SportsX solves most of the limiting factors of the sports books mentioned thus far by adding a greater degree of centralization. They are growing steadily, but their growth is currently and will continue to be limited by their split liquidity operation.