Ishan Bhaidani

Crypto is here for the middlemen. The industry is more than ready to replace these parasitic cogs with decentralized, transparent and secure alternatives.&nbsp;



But crypto’s killer app — the way that crypto will truly launch into the mainstream — hasn’t arrived yet.&nbsp;



Some of my favorite crypto thought leaders have said for years that the real killer app will be prediction markets, NFTs, tokenized real estate, metaverse, etc. The laundry list continues to grow. But I’m here to say right now that none of these are crypto’s killer app. While they are interesting speculative opportunities that offer diverse market exposure, these markets are not large enough to onboard the next million or billion users to the on-chain world.&nbsp;



What speculative market is? Sports betting.



Sports betting is the consumer application for crypto that everyone has been waiting for, and which can benefit greatly from decentralization. If there’s anything I’ve learned in my years in the crypto industry, it’s that crypto’s ultimate use case is disintermediating markets by offering peer-to-peer, decentralized solutions.



Bitcoin disintermediates the market for fiat and savings technology, offering an alternative to US dollars. Smart contract platforms like Ethereum disintermediate trust by allowing the creation of trustless, permissionless, peer-to-peer applications.&nbsp;



But beyond these two coins, other parts of crypto have emerged that remove the middleman even from within crypto: Uniswap offers token swapping that reduces a reliance on centralized exchanges; Render Network offers decentralized access to GPU compute power; and money markets like Aave and Compound offer access to capital and permissionless loans rather than having to go through banks.&nbsp;



And sports betting is a middleman-heavy, rapidly growing industry that would particularly benefit from crypto’s ability to cut that middleman away.



In 2022, sports betting revenue <a href="https://www.americangaming.org/new/2022-commercial-gaming-revenue-tops-60b-breaking-annual-record-for-second-consecutive-year/">eclipsed $7.5 billion </a>while increasing 75% YoY —&nbsp;this growth is more than all other streams of gaming revenue combined (slots, table games, iGaming etc.). Mobile has also reduced many barriers to entry and is far more convenient for deposits –– 70% of all wagers are <a href="https://www.driveresearch.com/market-research-company-blog/sports-betting-statistics/#:~:text=31%25%20of%20American%20sports%20betters,events%20for%2032%25%20of%20people">placed online</a>. Combine that with a <a href="https://www.grandviewresearch.com/industry-analysis/sports-betting-market-report">10.3% compound annual growth rate</a> (CAGR) and 46% of American adults <a href="https://www.driveresearch.com/market-research-company-blog/sports-betting-statistics/#:~:text=31%25%20of%20American%20sports%20betters,events%20for%2032%25%20of%20people">having placed </a>at least one sports wager in the past year, and you have an incredibly fast-growing market to disrupt.



But the current issue with sports betting is the middleman in the form of bookmakers who usually charge a 10% “vig” or fee for every bet. Whether you win or lose, you pay 10%. A hidden tax of sorts.



Just as decentralized exchanges like Uniswap have made exchanges better and more efficient with the advent of automated market makers (AMMs), a similar model (like a central limit order book) can replace bookmakers in sports betting.



But bookmakers, like those in Vegas, aren’t even the worst perpetrators. Over $500 billion yearly is <a href="https://www.americangaming.org/new/new-aga-report-shows-americans-gamble-more-than-half-a-trillion-dollars-illegally-each-year/#:~:text=Sports%20Betting%20Findings,%24700%20million%20in%20state%20taxes">gambled</a> with illegal and unregulated sports books, including bookies and off-shore, unregulated websites. These websites are ripe with wire fraud, offer no consumer protections, no data privacy and even more predatory odds. Centralized crypto betting platforms like Stake and Rollbit are no better as they carry all the same risks, along with the risk of customer funds being <a href="https://www.fbi.gov/news/press-releases/fbi-identifies-lazarus-group-cyber-actors-as-responsible-for-theft-of-41-million-from-stakecom">hacked</a>.



With more and more wagers being placed online, the timing has never been more perfect for a truly innovative sports betting platform.&nbsp;



<h2 class="wp-block-heading">Crypto makes sports betting better</h2>



We’ve already established that smart contracts can significantly bring down the costs –– that&#8217;s just the start.



Crypto can also maximize capital efficiency, allowing users to place more bets with less money, eliminating fraud and counterparty risk. Using blockchain rails allows for new business models and systems that have never been possible in traditional systems.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/us-dolla-ponzi-scheme">The US dollar? Yeah, that’s a Ponzi scheme</a>



Projects can use tokens to encourage and onboard users through liquidity mining (or bet mining), where users who bet on the platform or provide liquidity can receive tokens in exchange for helping the platform grow. As the platform grows and more users are onboarded, the markets are then made more efficient. Then, platforms can take the funds from the fee they charge and distribute them to stakers of the token. This helps drive more brand loyalty in an industry where switching costs are typically very low.&nbsp;



The trading of live odds is another way for sports betting to make use of crypto. This is the ultimate degen move: Users can go long or short on the odds of a game and capitalize on the trend or direction of the game, rather than only be able to benefit from a binary outcome (win or lose). Add in leverage and margin, and things can get really interesting.&nbsp;



<h2 class="wp-block-heading">Onboarding the next million users</h2>



Many reading this article will think, “Why is sports betting any different from Twitter adding NFT profile pictures or Facebook changing their parent company name to Meta?”



But I believe that sports betting is truly crypto’s new killer app because it makes the industry faster, cheaper and safer. NFTs, the metaverse and any other flavor of the month may meet two out of three of these conditions, but very few satisfy all three. Any technology that wins on those three dimensions will beat any incumbent.



Crypto is the advent of the ownership economy. We are here to create public goods by utilizing public, trustless systems. Everyone talks about centralized exchanges or capital markets as some of the worst perpetrators who take advantage of retail, but for some reason, no one ever mentions “Vegas” — the worst perpetrator of them all, the sharkiest shark.



There are many languages in the world but everyone, universally, speaks the language of competition and speculation. Let crypto offer a fair alternative that&#8217;s easier, cheaper and less predatory for America’s new favorite pastime.&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Ishan is a University of Texas McCombs School of Business graduate with a BBA in Finance &amp; Marketing. He founded and managed a Private Equity Fund that reached an eight-figure Assets Under Management (AUM) and has also gained experience with many top 200 projects of crypto market cap. In 2022, he helped found SCRIB3, a Web3 Marketing and PR venture. He was notably among the first to raise an alert about potential deceptive and unethical business practices by FTX. Ishan contributes as a DeFi analyst, an active angel investor, and an advisor in projects like Polygon Technologies.</div>


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cryptocurrency

Sports betting is crypto’s true killer app 

Bart Hillerich

Dominated by large centralized entities, an everlasting theme of the <a href="https://www.thebusinessresearchcompany.com/report/sports-betting-global-market-report#:~:text=The%20global%20sports%20betting%20market,least%20in%20the%20short%20term.">$104.78 billion global sports betting industry</a> is playing against The House. In each bet a user takes, they’re up against the centralized entity that facilitates betting, whether that be an online platform or an in-person site. This means that no matter what bet a user takes, they’re always in a disadvantageous David vs. Goliath scenario—the old adage that “The House always wins” has stood the test of time, for good reason.&nbsp;



In addition to users being permanent underdogs, off-chain gambling is ridden with issues that have been simply accepted as industry standards—a fact of life. These are the most prevalent:



<ul class="wp-block-list">
<li>Fraud and manipulation</li>



<li>High fees</li>



<li>Slow payouts&nbsp;</li>



<li>Winners lose access to platforms</li>
</ul>



Luckily for bettors, by innovating around blockchain technology, <a href="https://sx.bet/">SX Bet</a> has emerged as the largest Web3 betting exchange globally—a growing alternative platform that operates outside of the traditional industry’s confines and offers far more markets than other blockchain-native competitors.



Since its inception in 2019, the project has committed to spearheading the transformation of sports gambling, focusing on offering an experience that users can’t get in the traditional, off-chain sports betting world. It has experienced rapid growth, garnering an all-time trading volume of $350 million and thousands of daily transactions.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1/ 💰The (Multi) Billion Dollar Opportunity: Why <a href="https://twitter.com/search?q=%24SX&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$SX</a> Bet (Also called SX Network) has a multi-billion dollar opportunity to be a non-custodial, fair and decentralized Rollbit ($RLB). The traditional betting space is an $85B industry, while web3 betting is still in its infancy.&mdash; Jake 🦈 (@Jake_SX9) <a href="https://twitter.com/Jake_SX9/status/1682065971111153664?ref_src=twsrc%5Etfw">July 20, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



On the platform, sports betters experience the benefits of decentralization, some of which include:



<ul class="wp-block-list">
<li>Users can offer and accept bets as they compete against each other through peer-to-peer betting instead of endlessly challenging The House.</li>



<li>Purchasing the platform’s native <a href="https://coinmarketcap.com/currencies/sportx/">SX Network token</a> enables users to participate in the governance of the platform, granting holders the ability to effectively have ownership of the platform and “be The House.”</li>
</ul>



The SX Bet approach is to innovate to encourage more betting activity, foster transparency, enhance market efficiency, and elevate the integrity and overall quality of the sports betting market. In true form, the SX Bet Team and community are aligned with the ethos of Web3, which values access, transparency, and fairness.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">A better platform for all</h2>



Operating as a betting exchange, the SX Bet advantage can be broken down into three primary pillars: better liquidity, better odds, and winning is encouraged.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“We think it’s time for a revolution. It’s time to make sports betting more equitable, accessible, and rewarding for all sports bettors out there.” 
<cite>Andrew Young, CEO &amp; Co-founder of SX Bet</cite></blockquote>



<h3 class="wp-block-heading">Better liquidity smoothes the UX</h3>



Using SX Bet, any bettor can offer odds, but the majority of liquidity is from major market makers that leverage SX Bet’s free API access to create markets, offer odds, and provide liquidity for other users to take. The protocol enables shared liquidity, leading to exponential scaling through increased liquidity, reduced fees, and a smoother UX.



<h3 class="wp-block-heading">Better odds generate bigger wins for bettors</h3>



Market makers on the SX Bet platform can create their own odds freely, a feature that fosters competition to provide the most enticing offers to bettors. This results in bettors getting the best possible odds that the free market is willing to offer, which translates to more dollars in the pockets of bettors.&nbsp;



<h3 class="wp-block-heading">Flipping the script on “The House always wins”</h3>



Traditional Sportsbooks (including competing blockchain sportsbooks) only make money when their users lose. This is because they operate as the “house” and are on the other side of every bet. To ensure “The House always wins,” these sportsbooks often engage in the unethical practices of banning or limiting their users to protect their profits, and may even refuse to honor withdrawals. SX Bet breaks away from the industry norm and embraces a fundamentally different philosophy:&nbsp;



Winning is Encouraged.



Benefiting from the nature of its decentralization, SX Bet is unable to ban or limit winning bettors and user funds are protected with payout guarantees because SX Bet never has control of them. In practice, all wagers are held in escrow by open-source smart contracts until a winner is determined. Wagers are then settled transparently. This enables SX Bet to circumvent the traditional sports betting standard of using vulnerable, manipulative in-house servers. It is an absolute game changer for user security and profitability.&nbsp;



<h2 class="wp-block-heading">Driving sports betting forward with innovation</h2>



SX Bet revolutionized the sports betting industry by offering a more transparent, secure, and convenient experience than traditional sportsbooks. Today, they’re continuing to build a better platform through innovation, with highlights including bet mining, the creation of an API that enables bettors to automate their strategies, betting bot tools available to all users, and a WIP goal of slashing betting costs (or the vig) by 90%.



<h3 class="wp-block-heading">Bet Mining: Become an Owner as You Bet</h3>



Bet mining is another revolutionary aspect of SX Bet, allowing users to earn SX tokens with every winning bet. Bet mining aligns the platform&#8217;s interests with its users, providing an opportunity to become part-owners of the protocol. As the user base grows, SX Bet becomes increasingly attractive to market makers, who offer more competitive odds, which in turn attracts more users, creating a self-reinforcing cycle of growth.



<h3 class="wp-block-heading">A free API and sophisticated betting bots mean anyone can become a notable bookkeeper</h3>



The technology of sports betting is rapidly evolving, and one of the leading innovations is automated betting. At the forefront of this innovation is SX Bet, which has created an <a href="http://api.docs.sx.bet/">API</a> that enables bettors to build a betting bot to automate their <a href="https://medium.com/sportx-bet/three-strategies-to-make-money-with-automated-sports-betting-1f34ae7fad44">strategies</a> and capitalize on real-time market dynamics.&nbsp;



While many exchanges charge exorbitant fees for API access, SX Bet gives everyone access to their API for free because doing so offers a new realm of opportunities for bettors and creates a more equitable betting landscape.&nbsp;



<a href="https://medium.com/sportx-bet/why-build-a-market-making-bot-on-sx-c54a394acd56">Market-making</a> strategies are the core focus for sports bettors building betting bots on SX Bet. With the support of betting bots, anyone can become a significant contributor and beneficiary of the SX Bet ecosystem because users can become bookmakers themselves. This modern approach to sports betting holds several advantages over manual betting:



<ul class="wp-block-list">
<li>Perform tasks more rapidly and efficiently,&nbsp;</li>



<li>Post-bet offers across a multitude of markets in a brief period</li>



<li>Promptly respond to market changes.</li>
</ul>



<h3 class="wp-block-heading">SX Bet’s Next Industry Disruption: Slash the Vig</h3>



SX Bet&#8217;s latest mission revolves around <a href="https://medium.com/sportx-bet/101-101-mission-sx-bets-quest-to-cut-sports-betting-vig-by-90-f43b6c066be1">slashing betting costs (the vig) by 90%</a> and putting more profits in the pockets of bettors. This reduction represents a 10% higher payout for bettors, exemplifying SX Bet&#8217;s commitment to providing better odds and a more equitable betting environment.



For the sports bettors out there, this means transitioning from the industry standard odds of -110/-110 (1.90/1.90) to industry-leading odds of -101/-101 (1.99/1.99).



In simple terms, this means a $100 bet on a 50–50 outcome pays you $99 in profit—not $90 as it does currently—a 10% higher payout for bettors.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">SX Bet&#8217;s vision for a better future in sports betting</h2>



SX Bet intends to continue to lead the way in revolutionizing the sports betting industry. With its innovative features, including peer-to-peer parlay betting, free API access, and the commitment to lead the industry in reducing betting costs, SX Bet is an innovative and rewarding betting experience.&nbsp;



The platform&#8217;s dedication to security, transparency, and community governance sets it apart from traditional sportsbooks and other crypto-betting platforms. By embracing the ethos of web3 technology, SX Bet is democratizing sports betting, empowering users to take ownership and actively shaping the future of the industry.



The revolution of sports betting has arrived.



Try SX Bet today and <a href="https://www.campaign.sx.bet/">complete enhanced verification</a> to receive a $20 free bet. To stay in tune with the future of the platform, follow SX Bet on <a href="https://twitter.com/SX_Bet">Twitter</a> and join the <a href="https://discord.com/invite/sxnetwork">Discord community</a>.



<a href="https://sx.bet/">This content is sponsored by SX Bet.</a>&nbsp;



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DeFi

Peer-to-peer sports betting is crypto’s next killer app

Ben Strack

<div id="highlights-block_63061b30686cb" class="highlights">
 <ul>
 <li>Solana-powered Monaco Protocol aims to be an on-chain order book and matching engine that allows immediate wager settlements </li>
 <li>Monaco Protocol contributor BetDEX is fueled by last year&#8217;s $21 million seed round, led by Paradigm and FTX </li>
 </ul>
 
</div>



BetDEX, which says it&#8217;s the first decentralized sports betting protocol, is looking to double down on disrupting the legacy gambling industry, which the startup reckons is in desperate need of lower fees and better user experience.



Live on Solana’s developer testnet, <a href="http://monacoprotocol.xyz/" target="_blank" rel="noreferrer noopener">the Monaco Protocol</a> is set to function as a global clearinghouse for sports betting via a digital assets-based liquidity pool.



BetDEX, one of several key contributors to the protocol, is the first sports betting <a href="https://www.betdex.com/" target="_blank" rel="noreferrer noopener">application</a> built on top of it, the company said Wednesday. Hundreds have been lining up wagers on soccer as part of beta testing and more than 80,000 are on the waiting list, according to BetDEX.



Traditional sports betting, which BetDEX says was worth $250 billion in 2021, is plagued by poor user experience and high fees ranging from from 5% to 40%, CEO Varun Sudhakar told Blockworks. BetDEX fees will be no more than 1%, he added, declining to detail specifics.&nbsp;



Other problems include counterparty risk and corresponding withdrawal issues, such as delays in cashing out.



“We’re never going to be in control of any customer funds,” Sudhakar said. “Someone could come in through our exchange and place a wager. That wager’s going to sit on a smart contract and automatically get disbursed immediately upon settlement to the winner.”



While sports gambling on the blockchain is nothing new, the exchange is vying to gain licenses in various jurisdictions in coming months — Sudhakar declined to specify which — as well to actually go live on the Solana mainnet. In 2023, the Scotland-based company will look to add additional locales and sports.&nbsp;



BetDEX secured a $21 million seed <a href="https://www.businesswire.com/news/home/20211117005643/en/Former-FanDuel-Executives-Launch-BetDEX-the-World%E2%80%99s-First-Decentralized-Sports-Betting-Protocol-and-Secure-Largest-Ever-Seed-Round-by-a-UK-Startup" target="_blank" rel="noreferrer noopener">round</a> in November 2021, led by crypto investment firm Paradigm and exchange FTX.



FTX CEO Sam Bankman-Fried said at the time “it is mind-boggling that more sports wagering does not occur on exchanges.”



BetDEX was founded by one-time execs at FanDuel, an online sports gambling firm, including former CEO Nigel Eccles, BetDEX’s chairman. Sudhakar spent three years at FanDuel.



Principal software engineer Eoin Murphy was previously head of sportsbook technology at FanDuel. Other recent senior hires include product director Aidan Maughan and legal director Kevin Kreuser, who joined BetDEX from BoyleSports and Twilio, respectively.&nbsp;



Drawing a parallel between gambling and the airline industry, Sudhakar said there’s an abundance of players hawking the same core products at generally high prices — a confluence of factors the startup views as primed for disruption via digital assets.&nbsp;



“The key opportunity for sports betting from my perspective is a global clearinghouse to arise for sports betting that can drive fee compression across all of these different front-end operators across the world,” Sudhakar said. 



“This would really force them to compete upon product and user experience and not compete upon who can necessarily raise the most venture capital money and acquire the most customers.”



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



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