Liquidity Provider

DeFi-Driven Liquidity Provision Model (“Be the House”)

A cornerstone of Debets is its innovative liquidity pool model, which introduces DeFi concepts into gaming. Instead of a traditional casino house that centrally bankrolls bets, Debets relies on liquidity providers (LPs) who supply tokens into a communal pool. When players bet on Debets, they are effectively betting against this pool. If a player wins, the payout is drawn from the pooled funds; if the player loses, their wager is added to the pool, increasing the pool’s value for LPs​. All games on Debets have a built-in house edge (approximately 1.5% in favor of the house) which means that statistically the pool will earn a small profit on every bet over the long run​. This house edge functions like a yield mechanism: it is analogous to how liquidity providers earn fees in an automated market maker (AMM) exchange. By “becoming the House,” any user can deposit ERC-20 tokens to earn yield from players’ wagers, effectively bridging the iGaming world with decentralized finance​.

Liquidity providers receive LP tokens representing their share of the pool when they deposit funds​. As betting outcomes unfold, the pool’s total balance fluctuates (growing from lost bets and shrinking when paying out wins), and the value of each LP token adjusts accordingly. An LP can withdraw (redeem) their share at any time by burning the LP tokens to retrieve their portion of the underlying ERC-20 tokens, plus any net profit earned (or minus losses) from the betting activity​. Debets thus creates a decentralized profit-sharing system: the “casino’s” profits are distributed among liquidity providers proportionally, rather than being captured by a single centralized operator​. This model is a clear infusion of DeFi into gaming — using open liquidity pools, tokenized pool shares, and algorithmic profit distribution, just like a DeFi protocol but applied to wagering. Crucially, Debets allows any ERC-20 token to form a liquidity pool for betting. If a token isn’t yet supported, the first liquidity provider for that token can permissionlessly deploy the necessary smart contract to activate a new pool​. This flexibility means communities can bootstrap betting markets in their own project tokens without needing special approval.

How does liquidity work at Debets?

Liquidity is used to match bets placed by other players. When a player wins, their payout comes from the pool. If the player loses, their wager is added to the pool, benefiting liquidity providers.

Why should I provide liquidity?

All games on Debets offer a house edge of over 1.5% in favor of liquidity providers. As the saying goes, “the House always wins.” Debets bridges the world of iGaming and DeFi, allowing anyone to become the House and earn from players’ wagers.

What does it mean to be the House as a liquidity provider?

Liquidity providers deposit ERC20 tokens into the pool and receive LP tokens representing their share. As the pool gains or loses value through betting outcomes, the value of LP tokens fluctuates accordingly. LP tokens can be redeemed for ERC20 tokens at any time.

Can I add a liquidity pool using any ERC20 token?

Yes! You can use any ERC20 token. However, if you are the first to add liquidity for a token, you'll need to deploy a contract to activate it on the platform.

Will I lose all my liquidity in one bet?

No. The maximum payout per bet is capped at 1% of the total liquidity pool, protecting liquidity providers from excessive losses.