House Edge (Fees)
Peerless on-chain betting creates a dynamic supply of WGR in the market as the blockchain 'burns' WGR as bets are placed and 'Mints' WGR to pay out winning bets.This creates a risk for the chain. If bettors win too much the WGR supply will increase devaluing the WGR coin over time. This is no different to a traditional sportsbook that may experience periods where they have liabilities greater than what they take in bets.
To counter this sportsbooks put a margin in the odds so that despite the outcome on events over the long term, they remain profitable. This margin, commonly known as the 'house edge' or 'juice' puts the edge in favour of the sportsbook to generate an income stream over time. Wagerr employs the same model, except in Wagerr's case 50% of the 'house edge' is burned tilting the probability of the blockchain to burn more coins than it mints. You can see this in the below image.
The House Edge Visualised
In the above example a 100 WGR bet at 2:1 (+100) odds creates an overall burn of 1.5 WGR over time. Sports betting has many more variables than a coin flip, Wagerr ultimately needs to be good at finding the 'true odds'. Successfully doing so will produce deflationary pressure with minimal variance.
The odds by default on Wagerr display as "effective odds". That is, the odds shown are what you receive the fee is already built in.
The below image shows the mint and burn process at an ecosystem level.
Last modified 1yr ago
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