Is eSports Blockchain’s Next Killer App?
During the last year or two and particularly during the peak of the crypto price boom in 2017, blockchain has been touted as a use case for almost every industry. Supply chain, banking, advertising, healthcare, government, and many other sectors have been discussed extensively in the context of how they will benefit from the emergence of distributed ledger technology.
However, at the same time, critics of the technology have been quick to point out the slow pace of adoption. One report from McKinsey even went as far as stating that there is “a lack of convincing at-scale use cases” of blockchain in general, although the report concluded that the technology is still too young to reach a final verdict.
While it’s true that mainstream adoption isn’t happening at the speed many in the blockchain community would like, some sectors are making steps in the right direction. Gaming is one area where many agree that blockchain can add significant value. For instance, the Tron Foundation announced late last year that it would be investing $100 million into a fund designed to attract game developers to the Tron network.
Similarly, blockchain gaming platform Forte recently announced a partnership with Ripple, also investing $100 million in game developers who bring their creations to Ripple’s Xpring platform.
Why Gaming?
Gaming and blockchain make good bedfellows for various reasons. MMO (massively multiplayer online) gaming has become hugely popular in recent years and is set for significant further growth from $25 billion in 2017 to $43 billion by 2021. These games are run on centralized servers, which can cripple revenues if they crash. Therefore, decentralization comes with clear benefits.
Furthermore, many games rely on accruing and trading in-game assets, resulting in some users having their accounts hacked because they’ve accumulated assets of significant value. Using non-fungible token standards such as Ethereum’s ERC-721 or ERC-1155 means assets cannot be duplicated, and a verifiable record of ownership is recorded on the blockchain. Blockchain also offers the potential for games to operate fast and secure payment networks, which supports micro-transactions, used in many games.
The Case for eSports
Even within the fast-growing gaming industry, the growth of professional gaming, or eSports, is startling. Already worth $865 million in 2018, the value of the global eSports market is expected to more than double to $1.7 billion by 2022. The majority of revenues come from sponsorships and advertising, with the rest from betting, prize pools, tournaments, merchandise, and ticket sales.
The current challenge with the eSports sector is a lack of infrastructure to connect participants. There are no tools or services for building or managing an eSports team. There’s no set path from beginner to amateur to professional as there is in traditional sports like basketball or soccer. Industry participants have nowhere they can view statistics or other analytics for individual or team performances. No services exist for the legal or practical management of all the funds moving between players in the sector.
Now, there is a growing faith that blockchain can solve these issues with the eSports industry. Whereas many use cases of blockchain serve to disintermediate particular processes, within eSports, blockchain can play a role in connecting parties. It can also provide a framework for governance and oversight of contracts, agreements, and payments between participants.
Enter DreamTeam
Alexander Kokhanovskyy is a seasoned eSports professional with over 20 years of experience in the sector. He founded the Natus Vincere professional gaming organization, with its Counter Strike team going on to win three premier eSports tournaments. He knows the problems of the eSports industry all too well — and now he’s banking on blockchain to fix them.
Kokhanovskyy has founded DreamTeam, a blockchain-based team building and skills development platform for gamers who want to join or build a team, improve skills, or monetize their efforts. DreamTeam allows players and teams to create profiles that can be searched using criteria such as language, skill level or age. It provides a platform to guide players and teams on improving to the next skill level.
DreamTeam is also targeting the use of smart contracts and a token to guarantee payments and delivery of sponsorships, media rights sales, transfer fees, and tournament prize money. The DREAM token will have multiple uses within the ecosystem, including settling the payments mentioned above, as well as purchasing merchandise and paying for premium services.
In short, DreamTeam aims to use blockchain to create a one-stop shop that unites all the various players in the eSports sector and eliminates the current fragmentation that exists.
So far, DreamTeam is off to a flying start. It has amassed 1.3 million registered users, making it the largest eSports recruitment marketplace in the world. It has established partnerships with industry leaders including Fnatic, Faceit, ESL, and Starladder. DreamTeam has declared a 60% success rate for players finding teams and vice versa, with an average time of 12 hours.
Funding the Dream
Based on funding success, DreamTeam is on the right track. The company secured $5 million in seed funding from Mangrove Capital Partners last year and went on to raise $10 million at ICO. David Waroquier, partner at Mangrove, had this to say:
“Blockchain is a potential game changer. However, there has yet to be a blockchain application that has taken blockchain from obscurity and pushed it to become a technology used by billions. ESports is changing that. The massive growth in eSports popularity mixed with the fact that gamers eagerly accept the newest types of technology is creating the perfect storm for blockchain. The functionality of DreamTeam offers all the potential to create the most powerful and scalable eSports solution globally available.”
Bottom Line
While critics of blockchain continue to ponder the future of the technology, there are others like Alexander Kokhanovskyy who are leveraging the benefits of blockchain to solve real-world problems. ESports has the potential for massive future growth. This growth could now become even more significant with the advent of blockchain.
