Peer to peer betting on Cardano: a Proof of Concept

[GENERAL] Name and surname of main applicant

Cagkan Acarbay

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Individual

[GENERAL] Requested funds in ada

74250

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language.

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Make a bet and put it on chain as an NFT. Anyone can now buy the bet and be the counterparty. Once time runs out, return your NFT and get your reward if you win.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

No

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No dependencies.

[GENERAL] Will your project’s output/s be fully open source?

Yes

[GENERAL] Please provide here more information on the open source status of your project outputs

The entire platform will be open sourced so others can take advantage of the platform to build similar platforms. We think MIT license should be OK, but we may change to another open source license.

[SOLUTION] Please describe your proposed solution.

The Problem: Bets are awesome, yet you need TRUST

Personal bets are a great way to motivate the self. An example to make this clear is stopping smoking: Proclaim to your friends that you will stop smoking and attach a big punishment if you fail. Find a counterparty, usually a friend or relative, to keep you in check and give you a nice reward if you win. For me it was not smoking for 5 years I went into with a friend with an insane reward/punishment for buying the other their honeymoon vacation. This was an extreme bet, yet it worked. I stopped smoking, at least for a while until I lost the bet :D

The personal bet isn't only for motivation purposes. It could just be a fun exercise. Want to bet on the results of a sports game, you can do that on many platforms, for any other thing you can bet on, there is no other place to do so other than a few niche platforms. But betting can be done on practically anything, given trust between the parties in the bet. And that's the main issue, how do you trust others to keep their word? You need a 3rd party to arbitrate. Or with this proposal, you need a smart contract and a system to decide who wins.

The Solution: Make an NFT bet, others buy to become the counterparty

Here's a simple overview of how it would work:

• anyone can create a bet in writing and put it on Cardano as an NFT.
• others will be able to buy the NFT, agreeing to be the counterparty to the bet.
• the purchase will lock the funds of the buyer in the smart contract.
• when the time condition of the bet or another finish condition is triggered, the NFTs will be returnable. if the NFT represents the winner of the bet, they will get the amount of the bet aggreed upon at the beginning of the bet.

The difficult part in all this is deciding who wins. This will be the main activity behind this proposal to figure out. This proposal is a discovery of that exact topic. Some early ideas behind this is allowing 3rd parties to cast votes on the result. Yet through R&D we think we can come up with better ways to set this decision, and implement it within a smart contract.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community.

Peer to peer bets are an entirely novel application of blockchain. The trust problem in betting can be solved through blockchain, opening up a personal bet to anyone in the world to become the counterparty.

In this way the proposal will open up an entirely new avenue of blockchain applications. To measure our impact, the main measure will be engagement in the idea, the number of bets, and counterparties will be a good indicator, as well as the number of similar projects this idea brings forth.

All outputs will be shared openly through a dedicated Discord community to be opened if the proposal gets accepted. Code will be shared on github.

If successful, this will turn into a project that is widely used on the Cardano platform.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

We are a team of two behind the proposal: Cagkan and Emir.

Cagkan is experienced in developing full stack web apps with 4+ years in Python, JS, React, Postgres, Rest, and design. He's the co-founder of littlefish Foundation, a Catalyst funded project that ran from late 2021 to 2023. In this time we built a community, completely open to newcomers, building a new social app based on a novel application of blockchains, while doing research on various aspects web3.

Emir is experienced in writing smart contracts in Cardano for 1.5 years, in addition to working in technical teams for more than 4 years. He brings the experience to develop the smart contracts to make the betting system a reality.

The combination of our skills is suitable to deliver an early stage dapp that delivers on the basic premise of the proposal. Our advantage in implementing this proposal lies in our precious experience researching DAO tools within littlefish Foundations' Fund 9 proposals. In those, we have researched a variety of DAO tools on Cardano which mainly deal with voting mechanisms for DAOs. We aim to utilize this knowledge in our proposals to implement the decision making mechanims. You can check out this research and more here: https://tools.littlefish.foundation/littlefish-research-hub/dao-tools

In our earlier funded proposals, we have managed funds completely openly. We shared our funds with the littlefish community members to complete research tasks and beyond. All of which can be found on our Discord community.

[Project Milestones] What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1 - Set up the first version of the betting smart contract

The smart contract will allow for an arbitrary bet to be made in the form of writing, and lock funds of the buyer in the smart contract, to be collected upon the verification of the bet.

Outputs:

• a smart contract for minting a bet NFT which has the bet in writing
• a basic system to collect the bet rewards based on an outside input

Acceptance Criteria:

• We can create a bet and collect the rewards based on basic conditions

Milestone 2 - Decide who's the winner

The crux of this proposal is figuring out who wins the bet. This milestone will be our first attempts to implement a mechanism, most likely based on third party voting, that will unlock the rewards in the smart contract for either the counterparty or the original bettor to collect. We will investigate voting tools and other mechanisms to implement this. A version of this that is directly implementable is setting at the time of creating the bet who the third party arbitrators to decide who the winner is. Their votes will decide who can collect the reward, and the smart contract will implement this logic.

Outputs

• a smart contract that implements the said logic
• a demonstration of the smart contract with a demo bet
• a web app to implement the betting
• ability to create bets through the web app and to collect rewards

Acceptance Criteria

• the smart contract works with an arbitration where a winner of the bet is decided through outside input into the smart contract.
• the winner of the bet can collect their reward.

Final milestone - Get some bettors and run them

Outputs:

• get 10 bets running on the smart contract
• finalize at least 5 bets to showcase the proof of concept

Acceptance Criteria:

• at least 5 bets have finalized with rewards distributed to winners

[RESOURCES] Who is in the project team and what are their roles?

ChaKhan - Co-founder of littlefish Foundation. In Project Catalyst and involved in Cardano since Fund 7. Organization building, governance, token engineering with long term interest in economics, game theory, behavioral psychology, political science, and history. 3+ years experience as a Backend Developer. Python, REST, JS, Postgres, data modeling. Electrical and Electronics Engineering Major.

Role: Develop the web app, research on how to implement the decision system, work with Emir to set project goals and do project management work, as well as get potential bettors and find counterparties for the bets.

https://www.linkedin.com/in/çağkan-acarbay-b2210b136/

https://github.com/cagkanacarbay/

Emir Olgun - Physics major 1 year experience in Data Analysis, 2 year experience in market research project management, 1 year experience in Cardano smart contract development. Physics major, Selt-taught programmer, JavaScript, Python. Completed Gimbalabs Plutus Project-Based Learning Summer 2022, followed Plutus Pioneers Program. Managed Littlefish Fund 9 proposals of Ocean Technologies and Tools of DAO Work to deliver them to completion.

Role: Emir is the blockchain expert on the team. His role is to implement the smart contract.

https://www.linkedin.com/in/emir-olgun-404048234/

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources.

The budget for this proposal contains only the Development and Tools&Infrastructure costs required to implement the proposal.

Research and Development: 25,000 USD at 40USD/hr at 1000 hrs

Tools and Infrastructure: 2,000 USD

Total = 27,000 USD

Total in 0.4 ADA/USD = 27,000 * 0.4 = 74,250 ADA

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The project requires a variety of skills to deliver properly: smart contract development, web app development, and integration of other tools to decide on bet winners.

At 27,000 USD, or just below 75K ADA, we believe this means a good deal for Cardano. This will take a lot of work to first implement the smart contract, then try out a variety of DAO tools and other means to investigate decision making mechanisms inside the smart contract to deliver the proposal.

We estimate the development time at 1000 hours, as it will take quite a lot of trial and error to integrate the various existing DAO tools to the smart contract to make p2p bets possible. This 1000hour number is a slight overestimation that also includes the risk of ADA price slipping beyond the current price of 0.4ADAUSD. We estimate a 25% fall would still keep our wages at a respectable level for our country of residence in Turkiye, where blockchain developers and full stack developers earn anywhere from 25USD to 50 USD.

With this 75K ADA investment, Cardano purchases a completely novel application of blockchain that has the potential to open up an entirely new avenue of blockchain based products that can generate future transactions, and all of it will be open sourced.

[IMPORTANT NOTE] The Applicant agrees to Fund Rules and also that data in the submission form and other data provided by the project team during the course of the project will be publicly available.

I Accept