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Exchange FAQ

Frequently asked questions about all things related to betting and prediction markets.

What is the difference between a prediction market and a betting market?

Betting markets are straightforward markets where contracts based on predefined odds of different outcomes occurring can be traded
  • Prediction markets are markets where contracts that are contingent on the occurrence of events in the future can be traded
  • Betting markets are straightforward markets where contracts based on predefined odds of different outcomes occurring can be traded

What is a prediction/betting exchange?

An exchange offers a platform for participants to trade the outcome of uncertain events, whether that be sports, politics or current affairs.
Here’s how an exchange differs from a sportsbook - instead of taking a position against a bookmaker or ‘The House’, an exchange allows participants to take positions against each other by either buying or selling (sometimes referred to as ‘backing’ or ‘laying’).
Additionally, participants aren’t limited to the odds set by bookies, and have the option to back multiple different outcomes.

Using an exchange versus a bookmaker

When betting against a bookmaker, you can only take a position on the odds they offer. This includes their margin - sometimes as high as 20% - meaning they price markets in their favor with unfair odds.
Compared to a bookmaker, an exchange offers better implied odds because it is a peer-to-peer platform where participants have the ability to both buy and sell (or ‘Back’and ‘Lay’). Peer-to peer platforms result in more competitive odds because markets are driven by supply and demand.
When you deal with a bookmaker, they are the only seller. Therefore, they can artificially fix prices at uncompetitive rates at which no other sellers are willing to step in.
However, with an exchange, there are arbitrage opportunities (risk-free profits) to sell or buy positions when prices go above or below the fair price. So, the market effectively ‘rewards’ clever participants for keeping prices competitive by trading fluctuations in markets over time – just like on an asset exchange.
This means you generally have a much higher expected value (EV) when trading on a exchange, as compared to taking a comparable position against a bookmaker.
Exchanges gives bettors more freedom and better price/odds. They also won’t restrict your account just because you’re winning, unlike traditional bookmakers.
Another key difference between exchanges and bookmakers is that users can also ‘sell’ positions (also referred to as ‘laying’). This allows the participant to profit if they believe the outcome won’t occur.

What markets and events are available?

Aver currently supports a long list of markets and events, which will continue to grow over time.
Sports:
  • European Soccer Leagues
  • Cricket
  • Mixed Martial Arts
  • NBA Basketball League
  • NFL Football League
  • Tennis
Events:
  • Popular Current Affairs
  • Political and Economics Markets
  • Crypto Token Price Predictions
  • NFT Floor Price Predictions
You can browse the list of active markets on the Aver Mainnet application.
If you are interested in suggesting markets not actively traded currently, you can make a suggestion to the community via Twitter or Discord

What are 'Backing' and 'Laying'?

What does the term 'Back' mean and why would I place a 'Back' trade?
To 'back' is to trade or speculate that an outomce will happen. For example, if you back Manchester United to win their match, you're betting that they will win. You would profit from Manchester United winning.
What does the term 'Lay' mean and why would I place a 'Lay' trade?
To ‘lay’ is to trade or speculate that an outcome won’t happen. For example, if you lay Manchester United to win their match you’re betting that they will not win. You would profit from either the other team winning OR a draw occurring.

How do odds (or prices) work?

There are three types of odds participants can use when trading on the exchange:
Probability This is the default odds format on Aver Exchange. With Probability odds, a contract trades between 0 and 1 where a unit of the contract represents a $1 pay-out if correct.
Probability Odds Pay-out Formula: Stake/Probability Odd = Pay-out
For example, a coin flip contract may trade at 0.50 (Probability Odds) because it has a 1-in-2 chance of being correct. If you stake $1 on heads and the market resolves to that outcome, your payout would be $2.
Using the formula above: $1/0.50 = $2
Decimals Whenever you see odds displayed in numeric form (i.e. 9.00), with a value greater than 1, this is a decimal odd. Decimal odds allow you to easily calculate your pay-out if the market resolves to the outcome you backed.
Decimal Odds Pay-out Formula: Stake x Decimal Odd = Pay-out
For example, a coin flip contract may trade at 2.0 (Decimal Odds), where the Decimal Odd represents the multiple on the amount staked that would be returned if the outcome is correct. If you stake $2 on heads and the market resolves to that outcome, your pay-out would be $4.
Using the formula above: $2 x 2.0 = $4
To convert Decimal Odds to Probability odds you simply need to divide the Decimal Odd by 1.
For example, a Decimal Odd of 5.00 implies a Probability of 0.20: 1/5.00 = 0.20.
American Style American Odds (most popular with U.S. based sportsbooks) are centred around winning or wagering $100 on a given bet, though you don’t need to actually wager $100. It scales up and down depending on your position amount.
The odds for favourites will have a minus (-) sign in front, and indicate the money you need to stake to win $100.
American Odds (-) Pay-Out Formula: ((100/odd) x Stake) + Stake = Pay-out The odds for underdogs will have a (+) positive sign in front, and indicate the amount won for every $100 staked.
American Odds (+) Pay-Out Formula: ((Odd/100) x Stake) + Stake = Pay-out In both cases, winners get their initial stake back in addition to their winnings.
For example, let’s look at a baseball game between the Yankees and the Redsox with the following American Odds:
Yankees: -130 Red Sox: +120
If you want to back the Yankees to win at -130, you need to stake $130 to win $100 if they win the game. This makes your total pay-out $230 ($130 + $100).
However, if you want to back the Red Sox to win at +120, You need to stake $100 to win $120 if they win the game. This makes your total pay-out $220 ($100 + $120)

Different types of orders

Aver currently only supports limit orders.
Support for more complex order types, including Market, ‘Fill-or-Kill’ (Immediate-or-Cancel) and Post-Only order types will be coming in the near future.
Limit Orders A limit order is an order to buy or sell at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. If there aren’t sufficient existing orders on the book to match your desired trades, your order will sit on the orderbook until participants that are willing to trade at that price arrive.
Market Order A market order is an order to buy or sell immediately. This type of order guarantees that the order will be executed (up to the amount currently available on the orderbook), but does not guarantee the final price (i.e. depending on the size of the order, you may be forced to pay a much less competitive price to obtain sufficient counterparties to the trade).

What is a market maker?

The term ‘market maker’ refers to a firm or individual who actively quotes two-sided markets in a particular security, providing bids and asks (offers to buy and sell) along with the market size of each.
Market makers provide a market with liquidity and depth while profiting from the difference in the bid-ask spread (the difference between buy and sell price). They are generally willing to be both buyers and sellers of any given outcome in the market, for the right price.
Market making is a crucial function for any exchange platform to operate, and it can be a very lucrative activity - if carried out correctly. However, it is not risk-free, as market makers are exposed to the risk of holding assets/positions that move against them - seeing a decline in the value of a position after it has been purchased from a seller and before it's sold to a buyer.

What is a matched versus unmatched order?

For an order to be confirmed, it must be matched with another participant who has an opposing order. If your order has been matched, that means it has been successfully placed and accepted by another participant at the price at which both parties are happy to trade.
As bets are matched against other participants, once your order has been matched, it cannot be ‘cancelled’. However, you could exit the position by trading in the opposing direction with another participant. For example, if you ‘bought’ a position, you could ‘cash out’ by subsequently ‘selling’ it to another participant in the future to close out this position if you no longer desired to keep it.
If your order has not yet been matched, (i.e. it remains an open order) then you have two options:
  • Keep the order to see if another participant is going to match it; or
  • Cancel the order - your stake will be returned and you can try again with at a more competitive price

What are some important considerations around placing orders and interacting with markets?

When using Aver Exchange, please have the following in mind:
  • One winner from 2 and 3 outcome markets will be most common.
  • Markets can be voided for certain reasons - e.g. a date is moved by more than two weeks, an event is cancelled, there has been an unanticipated change to the outcomes listed, etc.
  • Pay attention to the result you’re speculating on - is it the winner of a matchup? the score difference?, etc.
  • Events are resolved using multiple third parties through our 'Oracle'. Ultimately what is being traded is the consensus value that is achieved by the pre-specified oracle-feeds, and not the underlying event itself.

Which jurisdictions is Aver prohibited in?

At this time, Aver is unable to facilitate participants interacting with the Mainnet application from the following jurisdictions:
  • Afghanistan
  • Albania
  • Belarus
  • Burma (Myanmar)
  • Central Republic of Africa
  • Cuba
  • Democratic Republic of Congo
  • Guinea Bissau
  • Iran
  • Iraq
  • Libya
  • Nicaragua
  • North Korea
  • Russia
  • Somalia
  • Sudan
  • South Sudan
  • Syria
  • Tunisia
  • Turkey
  • United States of America
  • Venezuela
  • Yemen
  • Zimbabwe
However, the landscape is ever evolving and this list is likely to be subject to change with time. If you're unable to interact with the Mainnet application, it is still possible to interact and understand Aver on the Devnet application.