Pre-Game
Pre-Game Market Overview 🏈
Unlike perpetual trading, sports betting markets are divided into Pre-Game Markets and Live-Game Markets. LEVR's Pre-game Market is structured around several core principles, ensuring a streamlined and predictable betting process:
Focus on Token Purchases: During this phase, bettors are limited to purchasing tokens only as leveraged positions. Selling tokens is not an option in the pre-game market.
Inherent Leverage in LEVR Tokens: Each LEVR token represents a bet and inherently carries a leverage factor, ranging from 2x to 5x.
Staggered Token Emissions: The pre-game market is characterized by the complete release of all relevant game tokens. However, the emission of pre-game tokens is staggered over several phases within the pre-game market period referred to as “epochs”. Each epoch represents a different pricing period in odds during the pre-game market.
Real-Time Token Price Adjustment: In tandem with the staggered emission process, LEVR utilizes oracles to continuously assimilate pregame odds from major sportsbooks, dynamically updating the prices of pre-game tokens. Once a token is purchased, its price remains constant for the holder.
Counterparty AMM Framework: This phase operates under a Counterparty AMM Model, with the MVP Vault acting as the counterparty to all bets.
No Liquidations: Liquidations only occur during live-game markets and are based on the live-game odds feed.
Maximum Duration of 24 hours: LEVR Pre-Game Markets are designed to open 24 hours before the live game starts. Pre-game Markets may open later given a few caveats that will be outlined below.
At the outset, LEVR will focus on moneyline markets, which are predicated on the simple outcome of team wins and losses. In a moneyline pre-game market, bettors buy into positional markets based on their assessment of which team is likely to win.
The Pre-Game Market Window 🪟
Pre-game markets open a maximum of 24 hours before the game starts to give bettors an ample time window to participate in the pregame betting market. However, a pregame market may open closer to the start of its corresponding live-game market (<24 hours) given a few caveats:
Lack of Price Feed Consensus - LEVR’s pre-game odds require a minimum aggregation from the three largest sportsbooks per betting market to minimize oracle manipulation, akin to how PerpDEXs aggregate price feeds from multiple CEXs for a single trading asset. The pre-game market will not open until this minimum price aggregation threshold is met.
Insufficient Bet Volume - LEVR pre-game markets require sufficient off-chain pre-game bet volume to open. Once this betting interest threshold is met in traditional sportsbooks, LEVR will open its pregame markets.
Multiple Games in 24-Hour Window - If a team is playing two games within a 24-hour window, the pregame market of the second game may only be initiated after the first game has concluded. There can only ever be one LEVR betting line open per team at any given time. This delivers the most precise odds for the pregame markets, reflecting the outcome of the most recent game.
Pre-Game Market Example 🗃️
In the pre-game market, LEVR's protocol ensures balanced betting opportunities. If odds for a particular market are heavily skewed towards one side*, the protocol may not create a market for it. This measure maintains a fair and engaging betting environment, preventing markets with excessively one-sided odds.
*For Beta testing only the system is limited to a min/max of 20/80 favorable odds.
There are two pricing mechanisms for LEVR’s Pre-Game Markets.
Initial Token Price 🏷️
The Initial Price of a token, upon minting, is based on an aggregated set of real-time pre-game odds provided by TheRundown. In determining the initial token price for each market, LEVR employs a specific formula that converts the given betting odds into token prices. This formula is grounded in the fundamental principles of betting odds and market dynamics. Simply put, it translates the probability implied by the odds into a corresponding token price, providing a clear and intuitive starting point for each bet. This direct translation ensures that the initial token prices are both fair and reflective of the actual betting landscape.
The LEVR protocol sets a value between 0 and 1 for odds using the formula below.
O= Opening Odds / N = normalized protocol vig
The lowest price a token can be minted for is $0.20.
The highest price a token can be minted for is $0.80.
These token prices are subject to slight fluctuation and adjustment during the pre-game markets, as influenced by supply and demand dynamics. Given that tokens are emitted at different stages throughout the pre-game market, prices for the same token can fluctuate to reflect the changing off-chain pre-game odds.
Once you buy a token, that specific price is locked for you. You may buy the same token for a different price later at other stages of the pre-game market.
Adjusted Token Price 🔖
However, LEVR pre-game markets are still subject to supply and demand mechanics.
If more people bet on one team, the token representing that team generally will increase in price. This is because increased demand for the token indicates higher confidence in that team's victory, leading to a higher valuation of the token in the market.
In LEVR's pregame markets, each market operates under a default cap, ensuring well-balanced trading activities. When the initial liquidity that was injected into both sides is fully exhausted on one side, the AMM market temporarily halts, creating a pause for subsequent action. At this juncture, liquidity becomes limited to the side that still possesses available liquidity until the next epoch. During this epoch, the price oracle intervenes, injecting additional liquidity into both sides of the market at the prevailing rates. The market then finds its equilibrium as users take up opposing positions, allowing the AMM to facilitate potentially limitless volume within the confines of balance parameters. This innovative mechanism ensures the AMM can manage significant volume, simultaneously regulating market dynamics and upholding the principles of fair play.
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