Gaming in Blockchain, Fantasy Sports and NFTs.
How blockchain is shaping the gaming industry today and its influence on Fantasy Sports.
Blockchain-based Gaming
Blockchain-based gaming has seen an unprecedented amount of growth in 2019. By tying elements of scarcity with composability and permission-less marketplaces, it’s no surprise that the number of new Non-Fungible Tokens (NFTs) have outpaced the number of Fungible tokens in recent months.
For those unfamiliar with blockchain-gaming, NTFs serve as a crucial backbone to how many of them function. ERC721 tokens allow for unique in-game items such as skins, trading cards and cosmetics to be represented in the form of a token — each with unique characteristics that distinguishes them from other NFTs on the platform.
In the past year, CoinMetrics reported that ERC721 contracts have begun to experience exponential growth, with the number of deployed contracts increasing by almost 350%, compared to about 39% and 36% for ERC20 contracts and non-token contracts within the same time period.
When looking to quantify this growth, we’ve seen games like Gods Unchained, My Crypto Heroes, Axie Infinity, Neon District and CryptoKitties be huge drivers of NFT usage, each offering novel concepts on what blockchain-based games are capable of. Paired by emerging NFT markets such as OpenSea and NiftyGateway closing notable funding, blockchain-gaming is beginning to reach an inflection point now that a wide ecosystem of tools and services have been established.
In 2018, we saw a huge demand for CryptoKitties, and despite a lack of tangible ways to play with them in a traditional fashion, CryptoKitties demonstrated the value digital collectibles’ scarcity.
In the case of Gods Unchained, NFTs are used to represent digital trading cards similar to Hearthstone. This past November, Gods Unchained saw unprecedented traction with their Genesis Packs selling out for over 33,333 ETH or roughly $4M USD at the time of writing.
Similarly, December 2019 marked the launch of Axie Infinity’s community alpha — an upgrade which introduces a number of new elements such as battle cards, Player verse Environment (PvE) adventures and Player versus Player (PvP) battles — ultimately opening the gates for increased public usage in 2020.
What’s important to note here is that the number of unique users is not only growing, but that we’re beginning to see more capital being used within these games to acquire game-specific collectibles. We’re also starting to see NFTs take on more traditional characteristics such as leveling up, equipping items and generally making characters more interactive.
Fantasy Sports
When it comes to well established gaming industries, Fantasy Sports continues to dominate as one of the fastest growing markets, especially among young adults. In North America, Fantasy Sports has grown from an estimated 32 million players in the US and Canada in 2010 to 59.3 million in 2017. Within the US alone, the number of Fantasy Sports players has grown from 42 million in 2015 to 45.9 million in 2019.
According to the FSGA, 19% of Americans aged 18+ participate in sports betting while 19% of Americans aged 18+ participate in Fantasy Sports. With 78% of Fantasy Sports players bet on sports and 75% of sports bettors playing Fantasy Sports in 2018, it’s obvious that the two markets are highly correlated.
We’ve seen Fantasy Sports companies such Football Index rack up hundreds of millions of volume in 2019 — a growing signal that fans are becoming more and more eager to take their sports knowledge and passion to the next level. Football Index is a great case study of a term we like to call the individual athlete model (AIM) in which users focus on one specific player’s performance rather than establishing a whole team to compete against one another.
Paired with unique ideas such as NBA star Spencer Dinwiddie looking to tokenize his future earnings as a way to unlock profit-sharing, it’s clear that the tokenization of real world assets will soon make its way into sports through the advent of digital contracts, merchandise, trading cards and ticketing.
We’ve even seen projects such as Chiliz issue fan tokens for some of the largest football clubs in Europe such as Juventus and Atletico Madrid in the last few months.
When we tie these concepts together, it’s easy to see a trend that fans not only want to leverage the performance of athletes for bragging points among their friends, they want to parlay these assumptions into seeing how much their sports knowledge is worth.
Where Blockchain meets Fantasy Sports
Thinking of how Fantasy Sports can benefit from the advent of web 3 technology, it’s likely that many of today’s systems will become digitized — ultimately enabling further participation from large audiences in user-friendly ways. By adding direct mechanisms for enhanced liquidity and specialised markets to emerge, we envision Fantasy Sports opportunities to become even more unique.
In the future, it’s quite possible that major sports teams will become publicly traded, with individual athlete’s inviting their fans to share in their upside through fractional contracts.
When we start to explore the idea of Fantasy Sports markets, we can envision an ecosystem in which individuals from all around the globe can compete and earn prizes which are directly correlated to their favorite team or athlete. To use an example, we can picture shareholders of teams or players’ contracts receiving benefits such as VIP seating, signed memorabilia, meet & greets and voting on crucial decisions like contract extensions.
Positions in these unique assets will be highly liquid with peer to peer trading capabilities for gifting regardless of accreditation status. Imagine if you could gift your cousin $100 worth of Lebron James stock. Now that’d be pretty cool!
However, in order for these concepts to become a reality, we need to rely on the advent of new technology that allows us to do so.
Enter TradeStars
One of the beautiful things about public blockchains like Ethereum is ability to digitally own an immutable, transparent and distributed asset. The advent of token standards like ERC721 allow us to customize these ideas even further to create scarce, liquid tradable goods at a global scale.
TradeStars is combining the growth of blockchain-based gaming with the inherent demand for Fantasy Sports through the creation of Fractional Non-Fungible Tokens.
These tokens are unique Performance Cards which can be purchased and traded among users of our game, or even on NFT secondary markets. Each athlete’s real-life performance can only be represented by one TradeStars Performance Card, directly playing into the notion of scarcity.
What makes the TradeStars model so compelling is that fractional shares of Performance Cards are represented as ERC20 tokens, all of which are priced relative to a continuous token model. This allows for early token holders to capture upside when one of their performance cards sees high demand, while simultaneously giving each player their own unique market.
In doing so, TradeStars leverages the best aspects of Smart Contracts and aims to revolutionize Fantasy Sports by optimizing the way fans engage with their favorite athletes.
We ultimately strive to leverage fractional NFTs to create markets and incentive models that were previously impossible, furthering increasing the opportunities for individuals to make the most out of their sports knowledge.
In an industry where the lion’s share of profits are captured by the issuing entity, TradeStars helps put the power back into the hands of our users. Our most active players are likely to have the best chance at capturing TradeStar’s growth through the ownership of our most popular cards.
As we prepare for our full launch in the coming weeks, we invite you to be one of the first users to experience the next generation of Fantasy Sports.
We look forward to seeing you on the pitch!
About TradeStars
TradeStars is a Fantasy Sports platform powered by the Ethereum Blockchain where users can create and trade digital assets that represent real-life sports performances. A new way in which people can express their passion for sports, compete against each other, and show “How much their sports knowledge is worth”
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