Overview of Thales and alpha on their Arbitrum launch - by Loso
Introduction
It’s been a pleasure being a part of the Primapes community. This community is unmatched and hats off to @0xthade. Today I make my first official research contribution with the introduction of $THALES.
Recently, we’ve seen a market realization of on-chain gambling platform potential. Tokens like Rollbit Coin ($RLB) and Blockchain Bets ($BCB) have had significant gains in the past 30 days. Traditional gambling companies, whether in sports or casino styled games, are huge cash cows as odds are never in your favor. While odds will always be against you long term to insure stability of the book, in traditional markets they add a deeper spread as is the case with any traditional company vs their decentralized counterpart. Non-kyc, on-chain verification, and better odds are all good enough reasons to migrate degens on-chain. With that being said, a deep dive was conducted into on-chain gambling and of all the possible outcomes (including JustBET $WINR). $THALES shines as a potential market leader to take crypto gambling by storm. Let’s dive in.
What is Thales?
First and foremost, we must dive into the product before we discuss the token. Without a product we have nothing. $THALES powers two different dApps now utilizing their novel $THALES AMM. The AMM provides 0 to 1 innovation that is hard to come by after 1000+ forks of the AMMs we know today. Lets break the AMM down into the two different functions it serves for their dApps.
1. Overtime Markets Sports AMM
a. The sports AMM utilizes ChainLink oracles to establish initial odds for sports games ranging in all markets. Once the odds are established, the AMM provides liquidity for both sides. If the balance becomes off set, the AMM discounts the side least taken, incentivizing users to balance the pool.
b. The AMM has parameters in place to cap total exposure to single games to avoid complete wipeout losses to the liquidity. At the moment, total exposure to a single game is capped at ~2%
2. Thales Market AMM
a. This AMM utilizes a black-scholes formula to calculate the premiums on betting on the price of a wide range of crypto assets on a specific data. Sound familiar? Thales markets acts as a options protocol that simply disguises the function as UP/DOWN market betting. Just as the Sports AMM, if pools become imbalanced, the other side is discounted to give users enticing pricing on those options. What’s unique here is that the current state of all crypto options protocols, does not allow for free market trading throughout the duration of a contract.
Currently Dopex only allows you to buy a contract but does not let you trade it back freely to collect premium before expiration. They recently added the Options Liquidity pool feature but that acts as an orderbook where other individuals can bid your contracts at a discount. This creates frictions of liquidity and promotes under-cutting of your true value. With the Thales AMM you can sell it back to the liquidity pool if you are happy with your outcome or want to cut losses before expiry.
While the focus of this is on sports betting, the Thales Markets AMM actually demonstrates how robust the innovation is. Countless projects have attempted to tackle options on-chain, and while they all have viable products, they suffer cost of friction and inefficient liquidity.
The Alpha
Up until now, these AMMs have launched with liquidity being strictly from the THALES DAO treasury. In the short amount of time, the AMM has proven extremely profitable. This is where the good Primapes ALPHA starts to kick in. Recently TIP-99 has come to light. This proposal would allow users to deposit liquidity into the AMM. With this, you can become the house and take part in the money printing machine that is Vegas. To be able to provide liquidity, you must be a $THALES staker. There is a 10x multiplier on the amount of tokens staked with a $250,000 cap. Meaning you can deposit up to 10x the amount of tokens you have in dollars with a cap. 1000 tokens staked means $100,000 max contribution. Currently staking emits $THALES with good yield of 25%+. There is a 7 day cool down period of unstaking your tokens. TIP-99 is still in drafts but the team has completed the code and will be undergoing an audit this month. They expect the public AMM deposits to be live by mid-March. Just in time for March madness.
That alone is a reason to bid $THALES but let’s break down the true underlying details of the token. AT the moment, all bets placed charge a 3% fee that is deposited in what they call the SafeBox. This vault collects the generated fees and always maintains them above a certain threshold to be able to offset any losses the AMM may incur. Given the strict parameters around the AMM, losses are capped at insignificant amounts. This results in large excess in the SafeBox, increasing with volume. Of the excess the team buys back and burns $THALES tokens. With increasing volume, the buyback accelerates. NGU tokenomics.
Tokenomics
Circulating Supply: 34,107,359
Total Supply: 99,386,000 (614,000 burnt so far)
Max Supply: 100,000,000
While there are 90,000 in $THALES emitted daily, as the burn continues to grow, the token will become net deflationary. So what are some catalysts out there at the moment for continued growth? This is where your Primapes PFP pays for itself.
Recently TIP-115 passed unanimously to deploy Overtime Markets on Arbitrum. This would bring full decentralized sports gambling to Arbitrum for the first time. As we’ve seen with all projects, volumes explode once they arrive to the premier L2 and I fully expect that here. Give me the burn! To make things even better, the team stealth migrated some $THALES to Arbitrum already. No announcements on it, just simply confirmed by the core dev in Discord.
We have our guy Peter from Off-Chain Labs also step in and offer support. The team also stated that they weren’t going to put it up for vote until they confirm Arbitrum team’s marketing support when they launch. The proposal was posted and passed so we know what that means.
Conclusion
$THALES is set to make a splash soon. We can expect the Arbitrum launch to happen between now and mid-March. Currently staking is only available on Optimism. The team teased at an Arbitrum launch for staking to come. The wildest part of all this is that in checking the contract provided by the core dev, they just added liquidity to Uniswap within the last two days.
Hope you enjoyed the write up. More alpha to come!
-Loso, Primape #10