$FUN token released their updated roadmap for the rest of 2021 and Q1 of 2022. Many hodlers of $FUN and potential investors alike has been concerned about the road Fun Fair technologies are taking with the $FUN token following the large buy up of $FUN from Freebitco.in. I wrote a bit about that and $FUN token in a previous post. There I wrote a bit about some things that are indeed included in the roadmap, such as:
FUN token 2021 roadmap includes the development and launch of a new L2 running on an alternate blockchain, pegged 1:1 with $FUN.
Again, the FUN token 2021 roadmap includes the launch of a fully decentralized peer-to-peer sportsbook, utilizing the technology acquired through the purchase of BETR.
I wrote about Fun Fair's absolutely awesome social multiplayer games before, these games will be available through their on-blockchain crypto casino platform. Additionally, these games are going to be connected to staking pools.
Besides what I had speculated about, the roadmap contains much more. To me, working full time with product development within the online gambling vertical, this roadmap looks borderline impossible. I would expect some delays and as a $FUN hodler, manage my expectations accordingly. If the FUN team manages to deliver just 50-75% of everything in the roadmap according to their timelines, even that would be a great achievement.
In this post I wanted to write a bit about the deliveries outlined in the FUN token roadmap. I realized that it would be a very long post. Instead, I will focus on what excites me the most, which is the P2P crypto sportsbook. In a follow-up post I will cover that other stuff at a much higher level.
I'll also straighten out some concerns around the new L2 token. Always when people hear about a new token they immediately worry about the value of the current token. So, at the bottom of this post I made some comments around $FUN token and the new L2 token.
As a huge fan of sports betting and crypto gambling products I wanted to dig a bit into what we could expect from FUN token upcoming P2P crypto sportsbook.
To better visualize and understand what the FUN token sportsbook will look like, we should go back and look at the BETR sportsbook. According to BETR's website, they provide the following (which is now in the hands for FUN token):
Let me try and break it down to get a better understanding of what FUN token decentralized crypto sportsbook will include. First off, the peer-to-peer betting part. Before making a point about why peer-to-peer betting plays an important part in crypto sportsbooks, let us have a look at a fundamental part of sportsbooks and betting; the sportsbook margin.
In off-blockchain sportsbooks, the sportsbook operator excise a fee on every bet. The fee comes in the form of a margin. The sportsbook margin is often referred to as juice or vig. Operators do this to ensure a profit over the long term. There is no guarantee that a sportsbook will win money on a sports event that is being offered. On the contrary, it happens relatively often that sportsbooks suffer losses on individual sports events. However, the aggregated number of sportsbook events offered on a yearly basis will ensure a profit given that enough bets were wagered. The margin is what increases the likelihood and size of the profits made by the sportsbook.
The standard sportsbook margin sits around 6-8%. The margin often varies depending on sports and what competition is being offered. The higher the margin, usually the riskier the sports event being offered. For example, an NBA match between the LA Lakers and the Brooklyn Nets could have a sportsbook margin of 6%. While, at the same time, you could bet on a Brazilian third division match of football where the margin is 10%. Here, the difference in margin relates to the risk the sportsbook is taking by offering odds on the matches.
Almost everything there is to know about an NBA match is known to both sportsbook operators and the market, where all the knowns are priced into the odds and there are very few unknowns to be known. So, the odds on an NBA match is accurate, and it is both safer and easier for a sportsbook to offer NBA betting to punters and make a profit. Effectively, they can afford to offer a lower margin on the odds.
On the other hand, going back to the Brazilian third division football match. This is a much riskier event to offer odds on. The sportsbook operator themselves won't have the same extensive coverage of the league and the teams. Likewise, the market as a whole won't necessarily correct the odds to give the sportsbook reassurance. Instead, there may be a few sharks out there with a lot of knowledge of Brazilian football and the third division in particular, who may cash-in on that knowledge and place bets that are to their advantage and to the sportsbook disadvantage. Here, a higher margin will make it more difficult for punters to make money on the Brazilian third division. While also making it easier for the sportsbook to make money on offering Brazilian third division.
Through the blockchain, by leveraging the decentralized nature and creation of trustless networks. The middleman (sportsbook operator) role can be reduced and effectively the costs of placing bets on sports. This is where peer-to-peer betting comes into play.
As mentioned in the last paragraph, peer-to-peer betting can remove the middleman from the equation of placing bets on sports.
Technically speaking, peer-to-peer is usually found in computing and networks. Where tasks or workloads are shared between peers. Where the peers are different nodes (e.g. hardware or software application) that have equal rights.
The concept of peer-to-peer betting is similar in nature. But instead of pieces of hardware or software applications in a network, the nodes are actual people like you and me who are participating in the act of sports betting in a decentralized P2P crypto sportsbook. Such as the future sportsbook FUN token have acquired from BETR and are going to launch in their on-blockchain network.
In such a sportsbook, punters will be the once placing bets and accepting bets. The concept that is used is "backing" and "laying". Where a large group of punters uses the sportsbook independently and form a network. These punters are either backing of laying bets on sports events.
In the example above, we would have an instance of liquidity being provided on the Moneyline market in the match between the LA Lakers and Brooklyn Net. On one side we have a punter backing Brooklyn Nets to win and on the other side we have a punter laying Brooklyn Nets not to win. Their wager (or stake) is matched and stored in a pool of liquidity. And, whoever wins gets paid out of the pool of liquidity for that game and that market once the market is finished and settled.
So, you would have a peer (punter) betting against another peer (punter) = peer-to-peer betting.
Compared to the explanation of sportsbook margin in the previous section, where a fee is applied in order for the sportsbook operator to make money. In peer-to-peer betting, this fee is redundant. Effectively, through decentralization of sports betting and peer-to-peer betting leveraging blockchain technology, the middleman (sportsbook operator) is removed from the equation. As a result, the fee is redundant and the payout on each bet can be 100% instead of e.g. 92% (if the sportsbook margin is 8%).
In the example below, the chances of Brooklyn Nets winning is 50%. 50% equals 2.0 in raw odds. This means that both Brooklyn Nets and LA Lakers are 50/50 to win. 2.0 in odds on both sides. Sportsbooks can't make a profit if they make a 100% payout. So they apply a margin, in this example, an 8% margin is applied.
We have a person betting on the Brooklyn Nets to win through a centralized sportsbook, the odds offered is 1.92 for the Brooklyn Nets to win. This person bet $100. If the Nets win, this person receives $192. The stake of $100 plus the winnings of $92 ($100 x 1.92 = $192 - $100 = $92 profit).
Then there is this other person, betting on the Brooklyn Nets to win through a decentralized P2P crypto sportsbook as the one FUN token are planning to release. The odds for Brooklyn Nets to win is 2.0 through peer-to-peer betting. No margin is applied on the odds price. A 100% payout can be applied since the bet is placed between the people where the risk is shared and the trust of facilitating the transaction is assigned to the blockchain. The person bets $100 on Brooklyn Nets to win at 2.0. If the Nets win, this person receives $200. The stake of $100 plus the winnings of $100 ($100 x 2.0 = $200 - $100 = $100 profit).
So, the same stakes on the same bet in the example given has an 8% higher payout through peer-to-peer betting. This is a significant difference, especially for punters who place many bets.
Unless you are brand new to crypto and blockchain, you will know that transaction fees are applied when data is transferred through a dApp (for example FUN Token's P2P crypto sportsbook). In this case, the data is a transaction of funds between one peer into a liquidity pool where those funds are matched on the terms of the event/market/bet.
So, this transaction utilizes the Fun Token blockchain where either $FUN or the new L2 token is used to pay for transaction fees (gas fees in blockchain terms).
We can expect that a fee will be taken on bet placements, but this fee is going to be a microtransaction fee, much smaller than the high margins charged by centralized sportsbooks. I would expect it to be at maximum 1%, possibly lower. And, if I am allowed to speculate, there may be some rewards mechanism for token holders who stake and provide liquidity in the platform. Or/and, some cashback mechanism of total stake placed in the sportsbook. Which, if utilized, would lower the fees further.
This means that, if the FUN Token crypto sportsbook get traction and a lot of usage, their sportsbook will be superior to that of off-blockchain sportsbooks:
Pretty awesome value proposition. Of course, FUN Token's crypto gambling platform needs adoption to be successful. But the workings are there to make it happen.
The L2 token will be a utility token in a side-chain where the dApps that are used is being run, e.g. crypto sportsbook, crypto casino, crypto poker etc. This is the token that will be used for gas fees when transactions are made relating to bet placement, a spin a slots game in the casino or in a hand of Texas Hold'Em.
What is more, in the roadmap it is mentioned that the L2 token will be pegged 1:1 with the $FUN token. So, the value of $FUN would relate to the new token.
This is an important step in allowing for adoption of the FUN Token sportsbook. The issue with BETR was the high transaction fees. At its worst, a $20 bet would have a $450 transaction fee. The side-chain tokens of FUN are going to have very low transaction fees. Effectively sidestepping the issues BETR had with unsustainable transaction fees.
In summary, the roadmap of FUN Token is looking great. I doubt that they will deliver on all of that but even if they just manage a portion, the impact of the value of $FUN would be considerable. Looking at all the shit coins out there, $FUN is not one of them. It will be an interesting 2021 and 2022 for $FUN hodlers like myself.