Should GnosisDAO Sponsor Prode Markets?
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title: Should GnosisDAO Sponsor Prode markets?
status: Phase-1
type: Funding
created: 2022-08-19
Simple Summary
Prode is a decentralized betting platform built using Reality.eth and Kleros and currently deployed on Gnosis Chain. Unlike other projects like Omen or Azuro where 1-question markets are created and supported by liquidity providers, Prode focuses on betting pools in which users bet on multiple outcomes and compete against each other for the highest prize. This is a very popular type of sports betting scheme that has been played across the world for many decades. Prode is the Argentinian name for it, but it is also known in other cultures, sometimes with big variations, as, for example, “Polla”, “Porra” or just “betting contest/pool”.
Prode was officially launched 2 weeks ago after 4 months of intense work and without any external funding. To bootstrap the first markets and kickoff adoption of the platform, the Gnosis DAO could sponsor the most attractive markets in exchange for some of the creator’s fee rights of the markets chosen. Additionally Gnosis DAO could provide funding to the Prode team to support the project’s development and advertising.
Motivation
- Increase adoption of Gnosis Chain. We noticed that the onboarding of new users is an issue, because getting xDAI on Gnosis Chain for the first time is confusing and sometimes not very straightforward. There’s also a lot of competition among sidechains and L2s, and Gnosis Chain is not the most popular one.
- Attract users and market creators to Prode. In the type of prediction markets Prode focuses on, users usually look for markets with potentially big prizes (a bit like a lottery). Initially, this is hard to achieve, because the dapp traffic is low and therefore there are no market creators advertising their market pools, and vice versa. One of the strategies to overcome this is to start creating markets ourselves and fund them with juicy prizes.
Specification
Total requested amount: 200k xDAI:
- 100k for sponsoring markets.
- 50k for the team.
- 50k for marketing.
Funds Allocation Details
Sponsor the following markets (total funds requested for sponsoring markets: 100k xDAI):
- FIFA World Cup Qatar 2022. 25k xDAI. Creator fees (5%) go to GnosisDAO. Breakeven*: 500k xDAI.
- T20 Cricket World Cup 2022. 10k xDAI. Creator fees (5%) go to UBI Burner to support the UBI price and attract its community and supporters.
- F1 Grand Prix Japan & Brazil. 2.5k xDAI each. Creator fees (5%) go to GnosisDAO. Breakeven*: 50k xDAI each.
- League of Legends World Cup 2022. 5k xDAI. Creator fees (5%) go to GnosisDAO. Breakeven*: 100k xDAI.
- Age of Empires Red Bull Wololo 2022. 5k xDAI. Creator fees (5%) go to GnosisDAO. Breakeven*: 100k xDAI.
- CS:GO market (TBD). 5k xDAI. Creator fees (5%) go to GnosisDAO. Breakeven*: 100k xDAI.
- NBA or NFL market (TBD). 10k xDAI. Creator fees (5%) go to GnosisDAO. Breakeven*: 200k xDAI.
- Upcoming 30 matchdays of the English Premier League. 30k xDAI evenly split into each matchday market. Creator fees (5%) go to each subsequent matchday market.
- Upcoming 10 matchdays of the Argentinian football league. 5k xDAI evenly split into each matchday market. Creator fees (5%) go to UBI Burner to support the UBI price and attract its community and supporters.
*The breakeven point refers to the market pool size needed to recover the funds. It could be lower if significant royalties are generated or greater if a lot of users bet in the markets through referral links. A bet placed after entering the market through a referral link will split the creator fees in halves: 50% to creator and 50% to referral.
Team funding (50k xDAI). Although the team has been self-funding the project for the past 4 months and will continue to do so in the short term, this extra funding will allow the team to start working full-time on the project for the next 6 months. Prode is currently being developed by 3 devs from the Kleros community. Additionally, this funding would be enough to hire 2 interns for communication purposes and contract free-lancing design services for the front-end and Prode’s NFTs.
Marketing funding (50k xDAI). Sponsoring markets alone is not enough to attract users to Gnosis Chain and Prode. The 50k USD requested will be used as follows:
- ~15k xDAI will be used to partner with sports influencers/streamers/casters in order to promote Prode and its markets.
- ~15k xDAI will be spent in traditional online advertising services.
- Based on what is learned in the upcoming months, 20k xDAI will be used in 2023 Q1 to (1) sponsor strategic markets and (2) explore markets we haven’t considered yet.
Rationale
Prode markets tackle a prediction market niche that is currently unattended in the blockchain industry. On the other hand, most decentralized prediction markets platforms, which focus on single-event predictions, struggle to sufficiently incentivize liquidity providers. Prode markets don’t have this problem, because the prize pool is bootstrapped from bettors themselves. However, until Prode gets more popular and its market creator-bettor ecosystem consolidates, sponsoring key markets could help adoption greatly.
A bettor who is not familiar with Gnosis Chain and Prode might not be attracted to the platform if the prize pools are low. If attractive markets such as the FIFA World Cup market gets a 25k USD funding, this would be a huge incentive for new users to join the network.
2022 Q4 will be a time of very popular sport events. This is a huge opportunity to gain traction. Some examples:
- According to FIFA €136Bn Betting Turnover and no suspicious betting behaviour at Russia 2018, 150 bn USD worth of bets were made during the World Cup 2018 held in Russia. We should try to capture some of this for the World Cup 2022.
- Cricket is a very popular sport in Australia, India, Pakistan and England, which constitute very big and diverse markets. Australia in particular is the biggest gambling country in the world according to Countries That Gamble The Most - WorldAtlas. In october the cricket world cup will happen.
- Esports have experienced a huge growth in the last decade and so have prizes and bets around its tournaments. People following esports - usually young, techy gamers - are a good fit for crypto/online bets, because they will deal better with the UX friction dapps have. There are some big tournaments coming and we should make the most of them.
- While big events attract a lot of users, they happen only a few times a year at most. It’s also important to incentivize smaller markets that can be played on a regular basis and thus create engagement in the long run. Football leagues are a good opportunity to test this out.
Implementation
Once this GIP gets approved, the ownership of the creator contracts of the markets mentioned above will be transferred to the Gnosis DAO address on Gnosis Chain. Afterwards, the Gnosis DAO can fund the markets directly by calling fundMarket(“”){value: sponsoredValue} in each market.
5% of the pools’ xDAI, including the funds sponsored, will be rewarded to the creator address when the market closes. Additionally, if bets positions get traded in a secondary market, the creator address (GnosisDAO) will receive 1.5% of trades as royalties.
The 100k USD requested for development and marketing will be sent to the Prode’s multisig, which will administer the funds, on Gnosis Chain: 0x0029ec18568F96AFE25Ea289Dac6c4703868924d.