Maximizing collateral's utility
How to use collateral effectively
Logium allows users to back multiple bets with the same collateral. This allows issuers to maximize the chances that their collateral will be utilized. Issuers can create an unlimited number of bets on multiple markets, and once collateral is used up by other users taking bets, the remaining awaiting bets are automatically invalidated. What is more, this mechanism does not increase issuer's risk, since the capital at risk is always limited to the deposited collateral.
This feature is possible because of the design of the bet taking process. When an issuer creates a bet, they cryptographically sign a message with their bet's details. This message, that we call a ticket or an awaiting bet, enables anyone to take the bet specified inside. When a user takes a bet, they execute an Ethereum transaction with the ticket as one of its parameters. Logium's smart contract then decodes the ticket, verifies the issuer's signature, and if it is valid, uses the issuer's collateral to back the new bet. Note that an issuer can sign and publish an unlimited number of tickets before any of them is actually used by the smart contract.
Our servers, separate from the Ethereum network, act as a listing service. Issuers publish their tickets there, and takers can browse what is available on the market. Because signing a ticket costs nothing and we store them on our servers, creating a bet is completely free.