Hans from Rostock is always angry with the local meteorological center because their weather forecasts fail too often. Hans has lived on the Baltic Sea coast for 25 years and can predict the local erratic weather by wind direction and systematic observation of the sky. One day Hans realised that he wants to call out the meteorologists. He comes to the meteorological center and offers its workers a wager.
Hans says that during the next two weeks his personal daily weather forecasts will be more accurate than that of the meteorologists. The center accepts the bet, but they need to formalize it. They decide to use PROOF OF TOSS peer-to-peer solution, where Hans creates the wager. The locals like the idea of the wager as the weather in the region is one of the most commonly discussed subjects. A lot of people decide to join the wager.
Event: competition between Hans and the meteorological center
Date and time the event starts: 2018, April, 1th at 6:00 a.m. UTC+2
Wager: Whom everyday weather forecast will be more accurate: Hans’ or meteorological center’s
Possible outcomes: Hans will win / meteorological center will win
Result source: http://www.rostockcitizens.eu
Hans creates the wager on 25th of March and places a deposit of 7000 TOSS tokens.
1500 participants bet on the “Hans will win” outcome.
They place a total of 800 000 TOSS on this outcome.
1000 participants bet on the “Meteorological center will win” outcome.
They place a total of 500 000 TOSS on this outcome.
Originator’s deposit = 7000 TOSS
Total = 1 300 000 TOSS (Bet sum)
During the next two weeks, weather forecasts made by Hans and meteorological center are put on a table on a public website of Rostock citizens and compared with the real weather. In two weeks the event is finished, and the DCJ (Distributed Crowd Judge mechanism embedded in PROOF OF TOSS) selects 50 judges to confirm the outcome within the platform. According to the internal system rule, the deposit of the judge for an event with the total pot of 1300000 TOSS should be at least 260 TOSS, the formula is as follows 1%/50*1300000 = 260 TOSS. This is done to ensure that every judge has some “skin” in the game and is motivated to provide the correct result, else he/she loses their deposit.
The DCJ confirms that weather forecasts made by Hans were more accurate. Rewards and winnings are distributed amongst all participants of the event.
– Receives the deposit of 7000 TOSS
– Receives the reward of 6500 TOSS (the reward for originator is calculated by the formula Bet sum * 0.5% but can not be more than the initial deposit).
– Those who placed bets on the “Meteorological center will win” outcome lose their bets.
– Those who placed bets on the “Hans will win” outcome receive rewards based on their bets.
For example, Peter put 2500 TOSS on the winning outcome. Hence, his reward will be equal to 6435
(500 000 / 800 000 = 0.625 (rate)
2500–1% = 2475 (1% is taken from all bets in order to reward the creator of an event and the judges of the DCJ)
2475*0.625 = 1546.875 (net winning)
2475 = refund (The tokens that Peter placed the bet with are returned to him, minus the 1%)
1546.875+2475 = 4021.875)
– Those who voted for the losing outcome lose their deposits.
– Those who voted for the winning outcome receive their deposits and gain rewards based on the total bet sum and their deposits.
The formula is: Judge reward = (Bet sum * 0.5% + Judge deposits for the incorrect outcomes + Surplus of an originator reward, if it is less than the Bet sum*0.5%) * Judge deposit/Judge deposit sum for a correct outcome
All cases are taken as examples and have no connection to real people or events