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.


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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.


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1.0 -

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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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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


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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.

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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.


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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:


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.

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Efficient Use of Network


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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


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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.


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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


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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.


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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.


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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.


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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.


20

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


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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.


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.

23


Simplified Oracle System


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.


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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.


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.


27


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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.


28


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


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


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.


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


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


33


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%


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.


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.


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


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


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


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.



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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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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.


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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.


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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


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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.


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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.

a sports betting protocol for all erc20 tokens - fansunite.io · betting exchange fees resolution...

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