Thales: The Future of Prediction Markets, Super Bowl Edition

It’s Super Bowl weekend, baby! You know what that means. It’s time to gamble.

Time to step away from the charts and lose your money somewhere else, and there’s no better time to get involved than on the Superbowl.

But you’re a blocmates reader; we know you. You aren’t just going to bet on some random betting app on your phone. You live your life on-chain and, therefore, will be looking to place some bets on-chain as well.

What better place to do it than Thales, one of the best prediction markets in crypto?

If you aren’t already familiar with Thales, then we recommend checking out the complete guide we did a couple of weeks back for the complete breakdown.

But here’s the quick TL;DR.

Thales is a liquidity and settlement layer for prediction markets. The full product suite contains five products, and each product has its own novel AMM catered to making the experience for that specific prediction market superior.

The five products are:

ThalesAMM - Classic crypto derivatives
RangedAMM - Built on top of ThalesAMM and allows for ranged trades between two strike prices
SpeedMarketsAMM - Short term expiry digital options markets.
SportsAMM - Uses Chainlink to price sports positional tokens
ParlayAMM - built on top of sportsAMM to allow for multiple bets

The team at Thales are shippooors through and through. They have shipped a ton of stuff recently and have plenty more in the pipeline. So, in order to keep you guys informed on everything going on, we thought it would be prudent to give you the rundown on what’s happened, what’s coming up, and what to expect further in the future.

Enough chit-chat. Let’s get into it.

The Past six months at Thales

The biggest highlight for Thales these past six months is undoubtedly their flagship product, Overtime Markets. So that’s exactly where we’re going to start.

Overtime Markets

Overtime Markets is essentially a DeFi native way of sports betting. It's a positional market that uses the SportsAMM & ParlayAMM to allow users to purchase various types of positions across a range of different sports.

Over the past few months, Overtime has been growing at a rapid pace. In the month of January alone, it did roughly $7.3M in volume across all 3 chains, with roughly 4.7k users on the platform over the same period.

A major contributor to this growth is the new products and features that the team has been shipping.

Arguably, one of the biggest game changers has been their new social login feature. After their recent Particle Network integration, users can now connect to Overtime via Twitter, email, or any other Web 2 login method, making Overtime very accessible for those beyond the crypto native audience.

Another huge feature was the addition of player props.

For those who don’t know, player props are a way for users to trade on the individual player performance of a specific player in a game. So, say you’re betting on an NFL game, you can take positions on things like passing yards, rushing yards, and other key stats of individual players.

With Overtime, users can make a trade directly with the AMM and receive an ERC-20 token that represents their position. After the game, a Chainlink oracle will feed the real-world data to the protocol, and depending on the result, the user will be able to either redeem their positional tokens or expire them worthless.

To make it even easier for the users, Overtime accepts multiple forms of collateral across the three chains they are on (Arbitrum, Optimism, Base). So whether you have stablecoins or tokens such as OP, ARB, ETH, you can seamlessly open positions on Overtime.

Outside of the new features on Overtime, some noteworthy changes have been made to the THALES token.

$THALES Tokenomics V2

In Q4 2023, there was a governance vote on Thales by the community to decide on what changes to make to the tokenomics to reward THALES holders.

There was a firm consensus on implementing the following changes, all of which were implemented on Jan 17th, 2024.

The most important change was the implementation of protocol rewards. Previously, when Thales was relatively young and immature, all the fees collected by the protocol would be deposited into the safebox contract. The funds there were used as an insurance fund in the event of a hack/exploit, and later on, it was used for buybacks.

Now, a change has been made to redistribute the fees earned through trading activities to THALES stakers. Currently, there is a standard 2% fee on all trades, and AMM liquidity providers get a 20% performance fee on every positive round, which further adds to fee accrual.

Since Thales is on three chains, they are using Chainlink’s CCIP to redistribute the rewards. All the rewards are accrued to a single unified cross-chain pool, and then, using the CCIP, it is equally distributed to stakers across all 3 chains with ease.

Another change made has been to ungate the AMM liquidity pools.

Initially, only THALES stakers could provide liquidity on the different AMMs. This was done to reward the most aligned community members but also to keep a soft cap on TVL as the protocol went through its maturation phase.

Now, the AMM pools are open to everyone, so we should see a steadily increasing flow of liquidity into Thales over the coming months.

The next change was to the emission schedule.

As you can see, Thales is already at a decent spot in terms of maturity, and with the new features added, it will only continue to grow. So high THALES emissions are no longer needed as a bootstrapping tool.

The emissions will now be decreasing from 105,000 THALES per week to 40,000 THALES per week. This decrease in emissions will most likely be appropriately balanced with fee rewards that stakers get.

If this isn’t bullish, then I don't know what is.

To top of this tokenomics shift, Thales also receive a grant from the Arbitrum STIP.

500k ARB was pledged to Thales in December 2023, and these tokens were distributed to every aspect of the Thales protocol.

AMM LP loss rebates - 10k ARB
Thales Sports Markets - 10k ARB
Thales digital options - 5k ARB
Thales speed markets - 4k ARB

The distribution described above is what was given out in the first round of rewards, which started on the 27th of December. All the ARB will be distributed to Thales gradually by the end of March 2024, so these ARB rewards will be distributed bi-weekly.

These are, of course, subject to change as new features or products come and also as more users begin using the various products.

The near future for Thales

With so many of the pieces of the puzzle already in place, the next couple of weeks are shaping up to be very exciting for Thales.

Let’s start with the big one. THE SUPER BOWL!

Overtime will be offering the best odds in the industry for the Super Bowl. There will be increased liquidity as well as increased player prop options to give you maximum flexibility over the positions you want to take in this game.

If you’re ready to get started, click here to set up your bets for the Super Bowl.

For the NFL playoffs, there was already 40k ARB allocated to traders, but for the Superbowl specifically, Thales will be chucking in an additional 10k ARB as incentive rewards.

You get all of this, plus the added benefit of not having to do KYC or lengthy registrations like you have to do with a web2 sportsbook. Thales is an absolute no-brainer.

After the madness of the NFL subsides, March Madness will be arriving.

March Madness is a NCAA basketball tournament, and with Overtime, you can make all sorts of bets on the tournament and individual games.

So once the Super Bowl ends, keep an eye out for that. You never know; they might chuck in some extra incentive once again.

Looking ahead in 2024

After these two major events are complete, Thales has some big plans for the rest of the year and beyond.

With regards to Overtime, the ultimate goal is to start now competing with the larger Web 2 sportsbooks. They have already set a strong foundation for themselves and now feel comfortable to aggressively grow off this foundation.

For starters, Overtime is working on a Mobile app. As we know, the majority of the sports betting industry is now on mobile, but Overtime has always been a desktop app.

However, things will change due to their Particle Network integration. They will have a new wallet using account abstraction, which means after logging in (using Web 2 credentials if preferred), there will be a new wallet generated into which users can deposit funds and take sports positions without needing to worry about gas.

With this new wallet, it becomes very easy to implement a desktop app, which will take Overtime’s user experience to the next level.

On top of this, Overtime will be introducing new features, such as live markets and the addition of new leagues and sports.

To go with the new and improved features that will be introduced, there are also some architectural changes being made to the ParlayAMM to make it more gas-efficient.

Initially, the ParlayAMM would guarantee full solvency by buying individual single positions from the SportsAMM. For multi-leg parlays, say 6 legs, this becomes very expensive.

Now, the idea is to lock the potential payout directly into a contract. So, suppose someone puts $5 on a 20x payout parlay. A $100 will be locked in the contract, which will reduce gas costs. Now suppose the first or second leg of the parlay doesn’t hit, this contract can instantly release the funds back to the AMM, which removes any concerns of capital efficiency.

Concluding thoughts

All in all, we can comfortably say Thales is set to take over in the coming months. Unlike most teams in crypto, they decided to play the long game. They’ve been patient in building out their product suite and adding new features to grow to this level.

They have prioritized security and safety over quick growth, and we believe this is going to start paying dividends from now on.

They have a strong community and have been gradually maturing as a protocol. Tons of other protocols have also been built on top of their AMMs, and many more will be coming soon. They are set to have their biggest months in the near future, with the Superbowl and March Madness coming very soon.

So all I can say is, fade these guys at your own peril.