I’m confused. What in your mind prevents a service that just takes a million clients (each with a $10k->$1m at 1/1000 market) and earns $10m by taking $10.01k from every one of them and returning on average $10k to every one of them?
Like, no one needs to tie up any money; you should be able to just pay someone $10.01k for them to pay $1m with 0.1% chance.
(Obviously randomization can be run on the exchange level in some very transparent way so that as a market participant you don’t have to unusually trust anyone.)
I’m confused. What in your mind prevents a service that just takes a million clients (each with a $10k->$1m at 1/1000 market) and earns $10m by taking $10.01k from every one of them and returning on average $10k to every one of them?
Like, no one needs to tie up any money; you should be able to just pay someone $10.01k for them to pay $1m with 0.1% chance.
(Obviously randomization can be run on the exchange level in some very transparent way so that as a market participant you don’t have to unusually trust anyone.)