> ## Documentation Index
> Fetch the complete documentation index at: https://docs.sporttoken.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Three way markets

# 3-Way Market Fees (Soccer)

Soccer and other sports with three outcomes (Home/Draw/Away) use a specialized fee calculation based on **expected risk**.

## Why Different?

In 2-way markets, the vault is always exposed to one side winning. In 3-way markets:

* The vault could lose if Home wins
* The vault could lose if Away wins
* The vault could **profit** if Draw wins (collecting from both sides)

This creates natural hedging opportunities that our fee model accounts for.

## The Formula

**Expected Risk** = P(Home) × Loss(Home) + P(Draw) × Loss(Draw) + P(Away) × Loss(Away)

**Fee Rate** = Change in Expected Risk / Vault Size

Capped at **3%** per outcome.

## How It Works

1. We calculate the vault's expected loss across all three outcomes
2. Your bet changes the expected loss (up or down)
3. If expected risk increases → you pay a fee
4. If expected risk decreases → you may receive a rebate

## Example: Betting on Draw

**Setup:**

* Heavy action on Home (+150) and Away (+200)
* Little action on Draw (+250)
* Vault profits if Draw happens

**Your bet on Draw:**

* Increases vault liability if Draw wins
* But Draw was the vault's "safe" outcome
* Fee reflects the risk you're adding to that outcome

## Example: Betting the Underbet Side (Rebate)

**Setup:**

* Vault: \$100,000
* Heavy action on Home: \$1,500 liability
* Light action on Away: \$200 liability
* Draw: \$100 liability
* Expected risk before: \~\$600

**Your bet on Away at +200:**

* Bet: $500, To-win: $1,000
* New Away liability: \$1,200
* This balances against Home liability
* Expected risk after: \~\$400
* **Risk reduction: \$200**

**Rebate calculation:**

* Rebate rate = $200 / $100,000 = 0.2%
* Rebate = $500 × 0.2% = $1.00
* Net fee = 0.3% system - $1.00 rebate = **-$0.50\*\* (you earn!)

***

## Rebates in 3-Way Markets

### When You Earn Rebates

| Market State                  | Your Bet                  | Result             |
| ----------------------------- | ------------------------- | ------------------ |
| Heavy Home, light Away/Draw   | Away or Draw              | ✅ Rebate           |
| Heavy Away, light Home/Draw   | Home or Draw              | ✅ Rebate           |
| Heavy Home & Away, light Draw | Draw might still add risk | Depends on amounts |
| Balanced                      | Any side                  | Small fee          |

### The Third Side Advantage

In 3-way markets, betting the "uncovered" third side often provides the best rebates because:

* It offsets exposure on BOTH other sides
* Reduces expected loss more efficiently
* Creates natural market balance

***

## Key Benefit

The 3-way fee model means you're never overpaying for bets that help balance the market, even in complex multi-outcome scenarios. Smart bettors can find rebate opportunities by identifying which outcome the vault needs action on.