Token Valley
Apr 18 · 9 min read

Taking a look at the list of dApps currently available on EOS using listing websites can be rather confusing. Gambling dApps currently vastly outnumber social media projects such as Everipedia and Trybe in terms of users, as well as projects that have the potential to be useful to society such as EDNA and Hire Vibes. Only one singular original game tops this gambling dApps in users; an idle game known as EOS Knights. Despite that game being ranked second in terms of users, it falls far behind in terms of transaction volume. The message is quite clear: Gambling dominates EOS. In fact, a casual onlooker might even be inclined to believe that EOS was a platform designed specifically for gambling, rather than a platform that just so happens to be capable of running decentralized casino platforms. The popularity of gambling dApps on EOS is staggering.

DICE — A Social Gaming Platform

Checking out each of these dApps individually, you’ll be greeted with what is essentially the exact same Dice game on the home screen, with a smattering of other casino games being listed somewhere on the page. Popular casino games such as Baccarat, Sicbo, Poker, and Blackjack are common, and a new oddity not found in traditional casinos known as Crash is also rising in popularity on these platforms. The main question to ask here is why, despite the minor differences between each of these websites, different teams are building what are essentially the exact same websites housing the same games on the same blockchain with the same business model? And more importantly, why are users and developers favoring casinos over more ‘noble’ dApps?

The answer is shockingly simple, and it’s an answer where the questions of the morality of casino platforms are essentially irrelevant. Gambling dApps are simply easier to make and implement in a sufficiently completed state that they’ll make profits and drive adoption. Many of the EOS projects in the planning or early building stages are more complex and will take longer to develop to a point that they will be ready for common consumer use. On the other hand, the Dice game popularised by EOS Bet is so easy to develop and deploy on a blockchain that despite EOS Bet and most other sites being closed source, different developers without access to the code were able to code this contract independently from one another and still have each of them function almost identically. Furthermore, building on EOS specifically is very convenient due to the chain’s fast and feeless transactions, making deposits unnecessary and bets instant. You don’t need to make an account for each individual website because your EOS account grants you access to any and all dApps on the chain.

There are other easy to code contracts that can be programmed on EOS that don’t necessarily have to be gambling dApps. Taking EOS Knights as an example, it’s just a simple idle game with an item marketplace attached to it. Despite not being a developer myself, I’d wager to guess that despite Knight’s simplicity it is still remarkably more complex to code and balance than the average casino game. Knights also requires real artwork, balancing of marketplace trading, and a more complex UI design. Knights, in my opinion, is also a vastly less compelling experience than the baseline of even the most rudimentary casino game, such as the Dice contract. The player’s core engagement with Knights is merely waiting, while the engagement with a casino game involves choice and risk. While the outcome of a Casino game on any of these EOS websites is inherently random and involves no skill, the user can still choose their win percentage and the amount they are willing to bet, which turns watching numbers on a screen or a card into a nail-biting experience during play, especially since the outcome of the RNG will have a direct impact on the players real finances.

The other major aspect driving the popularity of Casino platforms on EOS is the use of profit-sharing tokens. Tokens such as the BET and DICE tokens are awarded to players who make bets on their platforms, relative to the amount of EOS they bet. Many of these tokens, but not all, can also be purchased on exchanges. The purpose of these reward tokens is that they can be held in order to receive a share of the casino’s profits in the form of dividends, proportional to the number of tokens they own. The token economic structure for each of these EOS-based gambling coins is where each of these platforms differs the most significantly, with some tokens needing to be staked, or locked up to receive payouts, many tokens having different rates of inflation and different max supplies, and so on. Sometimes to further incentivize gamblers to bet as soon as they can, the reward per bet will decrease once a certain percentage of the max supply has been distributed to players, or ‘mined’ as the community refers to it. Popular sites such as Bet Dice will usually cut that reward in half every time 5% of the tokens are distributed in a manner similar to how Bitcoin’s mining reward halves every 4 years, thereby halving the rate of inflation.

These tokens seem great from a consumer and investor standpoint, in fact, I can personally attest to the fact that the DICE token is one of the best crypto investments I have ever made, vastly surpassing even that of the EOS token itself. While the EOS token has continued to drop in USD value since the launch of main-net, DICE has reliably doubled in price each time the token has halved and as payouts have become increasingly higher as a result of more volume. And there are no signs of the platform slowing down or of the DICE token losing value. Other tokens, meanwhile, haven’t proven to be nearly so successful for the most part. This largely has to do with the ‘pump and dump’ mentality very common in, although not exclusive to the crypto space. This is a tactic where rich traders buy up a lot of the tokens in order to raise the price and convince other traders to buy in, and then sell the moment they reach their target profit, thereby crashing the price of the coin and shaking investor confidence in the project that token represents. While the DICE token does fluctuate as traders take profits, thus far the token has proven immune to such crashes due to a staking structure that makes it hard for traders to take profits if there’s a sudden spike in price. DICE holders will stake to receive dividends but have to wait through a 24-hour un-staking period before their tokens are transferable again. By that time, it’s likely they’ve lost their opportunity to make their desired trade.

Other platforms have copied this staking model, but other teams also fail to update their platform with new games fast enough, and due to the saturation of gambling dApps they have failed to stand out in the market. Furthermore, there have been many exit scams in the space. This happens when developers who assign a large number of their tokens to themselves at the birth of the dApp sell their tokens once the price has been pumped, followed by abandoning their project. Thanks to these exits, as well as legitimate teams that got in too late and don’t deliver on their promises quickly enough, this has essentially resulted in EOS Bet and DICE being what I believe to be only relevant gambling platforms on EOS currently, with some potential for current and upcoming projects. And even then, EOS Bet is largely only relevant for being the first of these dApps to both be created and also obtain a legal gambling license. In terms of users, volumes, games, and features, DICE has EOS Bet beat. Since DICE originally looked like a copycat that would quickly die off, it’s very difficult to tell if other subjects will meet the same fate as 99% of the other dApps or if it will suddenly blow up, as appearances can be deceiving.

Now, even though I’ve been very positive towards DICE, I should point out that even among what I believe to be the legitimate tokens there is an insidious aspect to them that most investors haven’t considered, actively ignore, nor want to think about. And this is an aspect that is perhaps the biggest reason for the influx of gambling dApps recently.

While profit-sharing tokens are not technically shares in a legal sense, for all practical and emotional purposes, they may as well be shares. Owning EOS or XRP does not entitle you to profits made by Block.One or Ripple. However, owning a token like DICE very much entitles you to the direct profits made by the casino. This encourages owners of gambling tokens to root for and support the platform at all costs in hopes of increasing the value of their own investment. This is not a new thing, as this dynamic has always existed between companies and investors. The problematic aspect of this dynamic is that it incentivizes shareholders to implement policies that increase profits at all costs, even if they are anti-consumer. And where things get strange with profit sharing tokens specifically is that due to the way these tokens are issued, even playing the game once and owning, say, a single token technically makes you an investor in the project who is entitled to a share of the profits made by the dApp. This dynamic turns all players into investors, giving more people a gateway into becoming an investor and taking on an investor’s mindset even if they would normally lack the capital to be a successful investor in the stock market.

The potential ramifications of this new model incredibly complex and unpredictable and the impact and morality of this model will likely have to be analyzed on a case by case basis going forward. This model has the potential to be great, giving power to consumers by turning every customer into an investor without them even realizing it. People rooting for the success of the platform to increase the value of their investment might be more likely to advocate for pro-consumer practices because unlike many traditional investors, they would also be investors who like and use the product. This model could help align the interests of companies and consumers in a way I have never seen before, especially in an era where there seems to be an ever-increasing disconnect between large companies and consumers.

On the other hand, what makes me want to label this model as potentially ‘insidious’ is due to a very real observation that we can make in the short term. That is, that I believe casinos run an inherently anti-consumer business. Gambling preys on the weaknesses of human psychology and feeds into very real and very damaging addictions. The fast transaction speeds on EOS, as well as the fact that these casinos are hosted online and thus feel more secure than the potentially intimidating space of a physical casino, makes it easier than ever to lose money on stupid gambles, even for people who had no prior interest in gambling or history of gambling addiction. It’s quite reasonable to say that responsible adults are simply paying for the joy of the game whenever they lose and that businesses need to make money. On the other hand, it’s also easy to argue that the ‘costs’ of gambling are greater than the enjoyment value received, hence why gambling is heavily regulated in most parts of the world and why there’s a negative stigma attached to it in many circles. Regardless, EOS casinos are clearly trailblazers of transparent, borderless business practices.

I strongly believe that any secure and worthwhile business built on a blockchain will be safer and more consumer-friendly than any other business simply by the virtue of the benefits a blockchain can provide. This is owed to its decentralized nature, openness, and high security. Since a blockchain ultimately does not need to answer to any governments or regulatory bodies outside of its own community and its code, it is inevitable that shadier implementations of the technology will drive early adoption, just as the darknet markets did for Bitcoin. I also believe gambling dApps clearly demonstrate the strengths of the EOS platform and show the great potential for other styles of dApps both in and out of the casino space. I also believe that profit sharing models have a huge potential to improve consumer practices in the future. However, I also feel it’s important to keep sight of the fact that blockchains are ‘meant’ to be used by people to improve their quality of life, and to not get too caught up in the excitement of making profits off of tokens like EOS, DICE, and whatever other successful tokens may appear in the future. It’s important to acknowledge where the money is coming from and consider the potential downsides of these models, especially in these relatively consequence-free early stages of EOS and overall crypto adoption. Blockchain was designed to combat the mistakes in our society’s finance industry that were made by people driven by greed. It’s important that we remember that gambling is a greedy business, though perhaps necessary. The important thing isn’t the token price, the pump-and dumps, or the dividend payouts, but how the technology that facilitates those things can be used to improve EOS and society in the future.

Author: Alex from Token Valley

Note: The views and opinions expressed in this article are those of the particular author. Token Valley is a dApp discovery platform seeking to bring together the dApp community in a transparent manner that encourages further growth in the space.

Token Valley

Token Valley is a multi-blockchain dApp discovery platform. Visit dApp reports: http://tokenvalley.com

Token Valley

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Token Valley is a multi-blockchain dApp discovery platform. Telegram: https://t.me/tokenvalley

Token Valley

Token Valley is a multi-blockchain dApp discovery platform. Visit dApp reports: http://tokenvalley.com

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