The problem EvenOdds solves

Overview:

Our concept integrates traditional fantasy league bookmaking with the decentralised world. Our implementation reduces risk for bookmakers by dynamically updating odds in real-time as users play along and stake their claims. In traditional bookmaking, the bookmaker has to continuously monitor the odds, and stakes placed on the odds to reduce the risk and balance their "vig" or payout. This portal automates the process of changing odds to balance bets.

Problems and Solution:

• Traditional centralised book-making and fantasy leagues are plagued by opaque stakes with no insight into how the odds are calculated, what the bookmaker's cut (vig) is and how the payout is calculated. This is circumvented by employing the use of blockchain to store the entire staking history on-chain along with how the odds shift to ensure transparency in the system.
• Bookmakers run the risk of high-value losses due to probabilistically unlikely stakes winning and the bookmaker having to pay out more in winnings than the value residing in the pool of all the stakes. Traditionally this is prevented by bookmakers continually changing and shifting the odds to make some options more lucrative than others so that the spread of stakes over all the options is relatively stable. This is done because, in long run, the vig exacted by bookmakers on stakes forms a large part of their risk-free income. This is implemented in our application in an automated way. The odds are shifted after even a set number of stakes proportionally to the value of stakes placed on them so that the balance of the spread over all the options remains relatively stable and the vig is maximised. A function is used to proportionally and transparently shift the odds on-chain so that there is full fairness in the process.
• In traditional bookmaking, shifting odds and corrupt bookmakers also fraudulently give lesser payouts and winnings than the actual amount, this is also avoided by our solution by being on-chain.

Challenges we ran into

• The biggest challenge was to come up with a robust and fair algorithm to calculate and adjust the odds for the stakes without letting the probability get rigged or let it spiral into a diverging function. We solved the issue by taking a moving proportion approach. Along-side this, instead of letting the odds change in a very interlinked manner, we reduced the dependence of their nature and thereby reduced the possible loss of revenue due to smaller odds by making sure that only one odds that has a disproportionately large number of stakes on it is adjusted with the other odds changed in proportion. This approach was taken by reading quite a few papers on market-making dynamics and bookmaking.
• Integrating the smart contract with the app was also a significant challenge that required a large amount of googling to get over.
• We also faced an issue with subdocuments inside MongoDB that were appearing as undefined inside the backend JS code which turned out to be a mongoose deprecated version issue that took a lot of time to solve.