Why Sports Bettors Need Decentralization
Let me paint a picture for you as a sports bettor fed up with the traditional sports betting industry.
If you wanted to build your own sportsbook, you would need industry, market, and event data to set accurate and competitive lines, event data to resolve accepted bets, and, assuming you want to run a legal book, have compliance methodology in place to ensure all bets being placed on your sportsbook are legal. In the current betting industry such an endeavour is nearly impossible, as all betting data is controlled by an oligopoly of betting companies and the amount of capital required would be prohibitive. Enter blockchain technology, and the FansUnite Protocol.
FansUnite Protocol and Smart Contracts
The FansUnite Protocol is built on the Ethereum blockchain, which enables, through the use of smart contracts, trustless financial transactions between arm’s length parties. The advent of smart contracts makes it simple to programmatically disburse funds based on a given outcome, an obvious parallel to betting. Given this parallel, it is not surprising that we have seen a number of applications attempt to create sports betting solutions on the Ethereum blockchain. However, these proposed platforms show a clear misunderstanding as to why a decentralized and disintermediated sports betting future is both beneficial and inevitable.
The Timing in the Market is on Point
Consequently, the market is ready for a long-term sports betting solution on the blockchain. Centralized projects continue to claim to be facilitating decentralized betting simply by utilizing smart contracts to resolve wagers. Smart contracts actually operate like walled gardens — closed ecosystems in which all operations are controlled by the ecosystem operator, with no easy access to external data. The issue of access external data represents a challenge to sports betting Decentralized Apps (“DApps”) who need to port event data from the real world, on-chain. The FansUnite Protocol has solved this roadblock, and offers various further advantages that differentiate it from the market.
How the FansUnite Oracles System Works
FansUnite relies on a network of Oracles to reach a decentralized consensus on sports data, unlike other existing or proposed sportsbooks in the mainstream and cryptoverse that rely solely on ‘trusted’ Oracles. By not relying on a limited number of ‘trusted’ Oracles, which are simply the same centralized data feeds used by proposed cryptoverse sportsbooks such as Bethereum and Decent.bet, FansUnite is able to eliminate central points of failure and achieve a decentralized quorum that efficiently grades bets by writing data to the blockchain.
The FansUnite Protocol provides a comprehensive token economy designed to incentivize positive Oracle behaviours. Oracles are graded and paid out a reward based on both the accuracy and the timeliness (read, speed) of their event resolution. This system works with the same principles as the European football (read, soccer) leagues, where good teams (oracles) get promoted to higher leagues (better reputation score) which allows them a larger share of TV revenue (higher pay out on each bet), all based on their performance (accuracy/timeliness of the data).
FansUnite Decentralized Solution
Through decentralization, FansUnite is also able to solve the persistent problem of asymmetric information that plagues the traditional betting market. Currently, large sportsbooks are able to accurately price markets because they have access to a massive amount of betting transaction data.This proprietary data is walled-off within these centralized entities and leveraged to prohibit new market entrants. A decentralized protocol, with participation of a significant number of DApps leveraging the Ethereum network, allows for the democratization of market data for the shared benefit of the entire network. Having this data readily available encourages new entrants, as does the ability for each DApp to create and monetize their own tokens. Further, access to this data should encourage increasingly competitive pricing (odds) on events, benefiting the potential bettor.
Existing solutions require the use of proprietary tokens. The use of a company’s single token results in the majority of the benefit flowing to the token platform that the company created, and not to a proposed operator who is considering adopting the token. On the other hand, the FansUnite Protocol incentivizes traditional operators to become partners, free to adopt an existing token, and/or conduct a sale for their own native token, all while enhancing their brand and reach. The lack of support for alternative tokens significantly undermines an existing platform’s appeal as a protocol for other DApps to build atop of, and consequently hurts their chances of establishing themselves as a universal solution. The proposed cryptoverse betting platforms result in the creation of isolated but similarly functioning betting ecosystems, all with similar data structures, event information and smart contracts being separately and inefficiently stored on the Ethereum blockchain.
Lack of Regard for Regulatory Compliance
Existing platforms almost universally disregard the importance of providing a regulatory compliant offering, both with regards to financial regulatory bodies such as the requisite security commissions, gaming authorities and gaming legislation such as Know Your Customer (KYC), Anti-Money Laundering (AML), or obtaining appropriate gaming licences. The likelihood of mainstream adoption is significantly reduced by the failure of these proposed platforms to comply with necessary legislation.
Further, the failure of these proposed platforms to comply with applicable legislation renders it impossible for traditional sportsbooks to condone or utilize these platforms to gain exposure to a new market of cryptocurrency-based bettors. KYC/AML regulations and gaming licensors exist to defend the public interest by ensuring bettors are of age, the origin of funds are known and that operators are of necessary standard — all principles that FansUnite supports.
Summary
By providing free shared infrastructure that provides transparent market information to all network participants, FansUnite will encourage new market entrants, foster innovation in sports betting and provide the end consumer with competition and lower pricing. We hope you share our vision for a fairer and more competitive sports betting industry facilitated by blockchain technology.
To learn more about the FansUnite Protocol, check out our whitepaper here. If you have questions or are curious to learn more, we welcome all dialogue in our Telegram channel here.
