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We've not fogotten about ~Stacker_Sports

2087 sats \ 11 comments \ @mega_dreamer 21h Stacker_Sports

I know a lot of you lovely sports fans must be wondering why the sports markets have dried up on Predyx.

TL/DR: It's just temporary - we'll be flooding Predyx with sports markets starting next week or so.

And for the curious ones, here's why:

We discovered some major bugs on Multi-option markets. Especially on the NO resolutions of eliminated teams. After the NO resolutions, our market algorithm was undercharging for the existing teams and breaking our bankroll.

The AMM algorithm (LMSR) we use, was never designed to natively handle individual NO resolutions. And we were resolving NO under the assumption that LMSR would handle it. Obviously it was a bad assumption and has costed us money.

The good news:

Thus we had to invent and tweak the native LMSR to handle individual NO resolutions. The good news is that we've figured out how to do it. But this will take a while (4-8 weeks) to implement it. Until then we'll not be able to do any individual NO resolutions for existing and new range markets.

In simple words, the NO holders will have to wait for the final game conclusion, the NO holders will be paid out when we do YES resolution for the winner outcome.

Also there's a strong possibility we might NOT be able do NO resolution at all for the existing 6 sports markets even after the new fix, so please trade accordingly

Existing 6 sports markets :

For the newer range markets that we'll be dropping starting next week or so, technically we'll be able to do individual NO resolutions. But only after we've tested our new fix extensively (which may take 8-12 weeks). Thus please trade accordingly.

We'll make a separate announcement on when it will be possible to do individual NO resolutions on range markets.

Starting next week, we'll be able to set the initial odds at the market inceptions.

Thus. we'll start phasing out annoying liquidity_bot's trading to set initial odds. It was also causing accounting nightmare for us. The liquidity_bot will still perform trades at later stages of the market.

Thank you for your support and patience!

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51 sats \ 8 replies \ @Undisciplined 20h

I’ve never dug into the particular mechanisms that people use for this kind of thing but there was something about the multi market odds that seemed strange to me.

How much the odds rebalance seems to only be affected by their level and the total liquidity across all individual markets.

It seems like the amount of liquidity on each individual outcome should influence how elastic its probability is. For example, the 49ers resolution should be very sticky because of how much has been wagered on both sides of it.

42 sats \ 7 replies \ @mega_dreamer OP 17h

It seems like the amount of liquidity on each individual outcome should influence how elastic its probability is. For example, the 49ers resolution should be very sticky because of how much has been wagered on both sides of it.

Yes your thinking is correct if this was a single binary (YES/NO) markets. The more wager(more shares issued on each side) it has, the less the odds move. Odds also move in relation to liquidity. Odds move in relation to N (no. of shares) and b (liquidity).

Multi or "Range" markets are very deceptive in nature. In a range market when you're placing a NO bet on 49ers, it gives you an illusion that you're trading on that outcome (49ers). But in reality, you're not even betting on that outcome, NO means you're buying YES of all option except 49ers. In a range market, NO is just a convenience YES bet on all other options. That's why the odds are not sticky as you would normally think it should be.

Pro tip: If you really want to move the odds of 49ers, you'd be better off picking top 5-10 teams that you think has better chances than 49ers and placing YES individual bets on them. Better efficiency of your capital.

Mega Pro tip: When you're buying NO of 49ers, you're actually buying YES of all 31 teams. Worse efficiency of your capital.

93 sats \ 3 replies \ @HardMoney 8h

49ers No bet is my DCA

0 sats \ 1 reply \ @Undisciplined 8h

Yeah, I’m definitely hoping I don’t have to divest from it.

42 sats \ 0 replies \ @HardMoney 5h

It seems like it’ll work once the SB plays out. It just won’t resolve once the 49ers are eliminated in the first round of playoffs

0 sats \ 0 replies \ @mega_dreamer OP 50m

We've been thinking in the same direction. A lot of my team members wants to bet against 49ers 🤣

91 sats \ 2 replies \ @Undisciplined 12h

The main reason I don't often buy No shares, is exactly what you said, and I usually do so only when arbitraging a Yes with better odds from another site (or just to irritate @grayruby).

I guess I was just thinking there might be a way to have elements of both worlds in play, where each outcome has it's own liquidity that effects the odds rebalancing.

82 sats \ 1 reply \ @mega_dreamer OP 53m

Ha ha!

Valid point: It's ok to buy NO shares to irritate @grayruby. LMSR allows it ;)

I guess I was just thinking there might be a way to have elements of both worlds in play, where each outcome has it's own liquidity that effects the odds rebalancing.

Yes there is a way to do it. It can be achieved by creating Single/Binary YES/NO markets for each outcome/team. And group together in the UI to disguise it as Multi-option market. That way every option/team->market has its own isolated b and N.

However this approach is very liquidity intensive( much more liquidity will be needed to create such markets).

This type of markets will only work if there is a high volume and high frequency trading, where trader's are waiting like a hawk for arbitrage opportunity between the individual teams/option market. High frequency trading automatically tends to fix the odds variance between the teams market.

Bottom line, we are not there yet, once Predyx reaches such high volume and high frequency trading levels, we will for sure start launching isolated markets like explained above.

Hope this helps.

0 sats \ 0 replies \ @Undisciplined 12m

I feel like there should be a way to internalize those arbitrage opportunities, rather than wait for 3rd parties to do it.

For instance, let's suppose for simplicity that about half of the liquidity is on the 49ers and the rest is spread evenly across all the other teams. If I buy enough shares that the 49ers would move 2% in a single market, they would now only move 1% and every other team would move proportionally to rebalance the cumulative odds.

I'm thinking about it like a physical balancing act, where liquidity is analogous to mass.

51 sats \ 1 reply \ @grayruby 21h

Thanks for the heads up. We haven’t forgot you either!

40 sats \ 0 replies \ @mega_dreamer OP 21h

Predyx 🧡's StackerSports!