🎖️SX Product Strategy

SX’s goal is to help sports bettors make more money.

Like any financial market, increasing profitability for our users comes from having the best pricing (i.e. odds) and deepest liquidity. SX is essentially a platform that uses open APIs and a superior product to create the largest network of market-makers, who in turn, provide the best odds at the deepest liquidity for bettors. In short, SX is designed for people who care about the best odds (professionals and prosumers) and the deepest liquidity (syndicates and whales).

What SX is not:

• A platform for betting on any kind of exotic prediction markets (SX is focused on sports)

• A platform for betting on 5th division women’s volleyball (SX is focused on the main markets)

• A betting platform for recreational bettors to place 50-leg $5 parlays (not yet at least..)

• A betting platform only designed for professional bettors (SX is degen-friendly)

• A betting platform only for crypto-natives (SX is open to non-crypto bettors)

The Three Steps to SX’s Success

Step 1: Make SX as welcoming as possible to programmable bettors

SX is the most open betting platform in the world to programmable bettors. Our API is not only open and free to access, there aren’t any additional surcharges for bettors accessing SX through it. This is unprecedented for a sports betting platform. The vast majority of sports betting platforms (including many betting exchanges) try as hard as possible to keep programmable bettors out. Of the few that allow them, they impose hefty API monthly fees and/or chunky premium charges (i.e. fee that is equal to a % of their monthly profit). Many market-makers on SX are exclusive to SX because there are no open alternatives for them.

Step 2: Concentrate liquidity into a select range of the largest betting markets in the world

This allows us to channel all of our market-makers’ liquidity and bettors activity into a few, key, major sports markets. SX doesn’t have nearly the same selection of markets that a typical recreational sportsbook like Fanduel has (yet). While this dissuades the more recreational sports bettor from SX, it enables us to develop industry-leading odds and liquidity in the main (i.e. money line, spread, and total) markets that represent the vast majority of betting volume.

Step 3: Let our superior liquidity drive virtuous, positive feedback cycle and network effects

SX’s superior liquidity acts it’s own awareness, acquisition, and retention engine. Our amazing odds attract bettors’ attention by enabling SX to rank highly on odds comparison websites, to show up regularly on arbitrage/positive EV bet scanners, and betting handicapper bet slips. Our superior odds help acquire bettors by encouraging price-sensitive bettors to sign-up to take advantage of the many arbitrage-able or seemingly mismatched odds on the platform. Finally, they help retain bettors by acting as a de-facto ongoing promotion; once you’ve used SX for awhile, other platforms seem like a rip-off. Finally, our liquidity gets better as more bettors join the site. Better odds → more bettors → more betting activity → more attractive to market-make on SX → more market-makers → better odds → more bettors.

SX is a platform built to help sports bettors make more money from their bets by giving them better odds. Bettors using SX will typically find a vig reduction of 50-90%, which translates into 7-14% higher profits per bet on classic 50-50 bets.

Three keys to making SX Ultra-Liquid

1. Market Makers

Market makers are the lifeblood of any financial exchange; SX is no different. Market makers provide the differentiated liquidity that is the core value prop to SX, and we’ve spent years building our network.

For a betting exchange to have truly elite liquidity, its network of market makers must be:

• Varied enough to provide differentiated liquidity

  • Having hundreds of market makers utilizing the same strategy provides no additional value; they must be utilizing different strategies in order to get superior liquidity.

• With enough capital to offer deep liquidity

  • It’s not enough to provide small amounts of liquidity; to provide value, market makers must be providing bet offers with thousands of dollars of depth.

• Offering across a wide range of markets

  • The best market makers also provide coverage across many different market types and sports.

• Ideally, the market-makers also “opinionated”

  • Opinionated market makers are particularly valuable; they look to take directional risk by “shading” their bet offers (i.e. offering bets at odds diverging to the general market). These opinions create odds on SX that are highly differentiated and often even arb-able.

Attracting market makers was initially quite daunting; new betting exchanges lack the awareness, betting activity, and trust to attract market makers to their platform. SX has however crossed many of these key inflection points such that it’s become much easier to convince market makers to onboard onto SX.

2. Low latency order book and reliable data reporting

For market makers to supply the liquidity that powers the exchange, it’s imperative to build out extremely performant, low latency order book infrastructure. Furthermore, accuracy and speed in both market creation and, more importantly, market reporting is absolutely vital. This is particularly true in non-custodial betting platforms like SX in which reporting of markets is final.

SX operates a hybrid off-chain order book, onchain settlement infrastructure for all trading of markets. This enables market makers to provide liquidity and appropriately manage risk in highly performant off-chain infrastructure. Meanwhile, onchain settlement of all bets enables bettors to self-custody their own funds, which provides a far more trustworthy betting environment than traditional sportsbooks. Additionally, with all bets settling onchain, SX provides unparalleled transparency into all betting activity, which increases trust further, provides bettors with differentiated information, and naturally creates content marketing opportunities for the ecosystem.

Unlike the vast majority of all centralized sports betting platforms and virtually all onchain competitors, SX has rolled its own data oracle for creation and reporting of markets. Building out this data infrastructure was a multi-year effort with many, many bumps and bruises (i.e. wrongly paid out markets) along the way. However, this infrastructure is extremely reliable, robust, and speedy, with an extremely low error rate (99.97% reporting accuracy) for the adversersial environment (i.e. non-custodial settlement) that SX operates in. It would take a competitor multiple years to replicate the infrastruxture that SX has built out here; this is why the majority of onchain betting platforms outsource this work to Chainlink and/or UMA.

3. Whale & Syndicate VIP Service

The major takers of liquidity on SX are whales; the average bet size on SX (~$345) is almost two full orders of magnitude larger than the average bet sizes seen on recreational sports betting platforms.

Our whales choose us consistently because we have the deepest liquidity at the best odds. With that said, we don’t take a passive approach to helping these users utilize SX. We have a dedicated VIP and retention manager that communicates with these bettors daily, managing +100 different communication channels with them daily.

Our entire goal is to help our users make money in sports betting. Our VIP managers flag special betting opportunities that would be of interest to them, help with any customer support issues, and provide valuable insights. Above that though - we’re focusing on building lasting relationships with our community of bettors.

Unlike traditional sportsbooks - when our bettors win, SX wins.

The Classic "SX Bettor" Profile

Our Ideal Bettor:

• Owns crypto and transacts onchain

• Bets on sports daily

• Cares about liquidity and odds

• Wants to make money from sports betting

• Worried about the custody risk of holding funds on a sportsbook or CEX

Product Principles

Our product principles act as our guiding factors in deciding whether a set of features we dream up are a good fit for the immediate term, or they serve a type of bettor that we don’t really see on our radar. It’s relatively easy to fill our roadmap with feature ideas; the difficult part is filtering down to the ones that actually matter for our core community. The following are the principles that we know our ideal bettor wants to see in us:

Liquidity is King

We never want to launch features that will fragment liquidity, even if they bring in new bettors or help the platform grow in the short-term. For example, we turned down many opportunities to launch SX multiple times on other chains (i.e. multi-chain). Instead, we decided to spend months building out a highly unique cross-chain model in which all liquidity would still reside on SX Rollup. This enabled us to get the distribution benefits of launching on other chains without fragmenting liquidity.

Self-Custody of Funds is Non-Negotiable

Our community doesn’t want to trust us with holding their deposits; they want to see and be able to access the funds in their own crypto wallet, at all times. Granted, for some professional bettors this is less of a concern, whereas others see it as a deal-breaker. Either way, we want our bettors to have access to their funds at all times, and they want it too.

Protect our Market Makers

We do not change anything in our API docs or fiddle with how trading works without strong justification for the change and months-long advance warning to our market makers. Furthermore, we have a number of features built-into our trading infrastructure to protect market makers from toxic flow (e.g. such as long in-play betting delays).

Depth over Coverage

Adding tons of sports betting markets with undifferentiated liquidity is actually quite easy; the hard part is offering the best odds in the entire world, day-in and day-out. We’ve purposely slow-rolled the introduction of new betting markets to SX

Product Must Feel Like Traditional Betting App

We’ve added tons of features, from gasless betting to email wallet creation, to abstract away the complexities of crypto UX as much as possible and make the user experience feel similar to a traditional betting application.