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| By Bruce Ng |
There’s a reason Macau, Las Vegas and Monte Carlo are all virtually synonymous with opulence and decadence.
It’s because they’re all also synonymous with gambling, which has produced far more billionaires than any other vice.
That’s precisely because the ability of a well-run casino to pile up vast mountains of wealth for its owners and investors … is unmatched.
Two weeks ago, I told you how you can bet on stablecoin’s peg … and profit from those who do with Y2K Finance (Y2K, Not Yet Rated).
Today, we’re diving deeper into GambleFi, the new crypto sector that’s set to take the world by storm that bridges the world of blockchains with real-life gambling.
Just as decentralized exchanges allow you to trade on the blockchain, GambleFi projects let you make casino bets.
Well, gambling has been going on for thousands of years before the crypto revolution, and digital gambling has been around for a while itself. In fact, online gambling was worth roughly $90 billion in 2022 and is projected to grow between 11%-12% annually through 2032.
Source: Global Market Insights.
Click here to see full-sized image.
Indeed, online gambling was also one of the few industries to actually prosper during the Covid-19 lockdowns. This report by Statista details how revenues tended to increase in that time.
Moreover, as the online gambling industry grows, we expect blockchain casinos to capture a larger market share. Especially as advances in blockchain technology draw in new users by making access easier.
That’s because being on the blockchain gives these platforms additional benefits, such as …
- Provable betting odds: Betting odds — how likely you are to win in a particular game — can be easily obfuscated by a centralized online casino.
With a blockchain casino, all wins and losses are recorded and publicly available. That makes it easy to check if they’re what’s advertised … or not.
- Mitigation of solvency risks: Traditional online casinos take your deposits and place them in some offshore bank account ... where they’re subject to all the risks of fractional reserve banking — from bank runs to bad business decisions.
With GambleFi, your money stays on the blockchain in a smart-contract escrow. Payouts begin the moment results of the game are finalized. The entire process is totally transparent from start to finish.
This means players can keep up-to-the-minute track of their money. That’s very different from a conventional casino, whose offshore bank is a black box that could also be home for all kinds of skullduggery.
However, gambling has also bankrupted more than its fair share of players. That’s why savvy investors don’t play the game … they bet on the fact that others will.
In the world of GambleFi, that means getting leveraged to the tokens that fuel the blockchain gambling platforms.
In essence, as a token holder, you get a piece of all the action on the platform.
So, here are the three largest GambleFi platforms at the time of writing.
Rollbit
Rollbit (RLB, Not Yet Rated) is a rapidly growing blockchain application built on the Solana (SOL, “C”) network that offers a wide array of casino games, a sportsbook, NFTs and futures trading. At the time of writing, it’s the largest player in the GambleFi sector.
Rollbit gives users access to standard casino games, such as baccarat and blackjack, sports betting on football, basketball and soccer and crypto futures, where users can trade crypto coins with up to 1,000x leverage.
RLB token holders do get additional benefits when it comes to betting. But if you’re just a token holder and not a better, the big benefit to you comes in Rollbit’s Buy and Burn program.
Rollbit uses a portion of its daily revenue from its casino, crypto futures and sportsbook verticals to purchase and burn RLB. The process — known as Buy and Burn — is what makes RLB a deflationary cryptocurrency asset.
A percentage of daily revenue generated by various activities is used to buy RLB on the open market and burn them. This removes them from the circulating supply forever.
Figure 4: Burn rates per vertical. Source: Rollbit. Click here for full-sized image.
Trading crypto derivatives on 1,000x leverage is practically a surefire way to blow up your money. Crypto is very volatile, and 1,000x positions are often liquidated in mere seconds.
This allows Rollbit to make lots of revenue.
Out of the current circulation, 37.64% of RLB has already been burnt forever, leaving 3.1 billion. This will continue to be burnt via the Buy and Burn program.
Dream Machine
Built on the Arbitrum (ARB, Not Yet Rated) network, Dream Machine (DMT, Not Yet Rated) is an immersive arcade realm seamlessly infused with NFT and token-based gaming. It has an expanding and diverse offering of games, which currently includes favorites such as UNO, blackjack and chess to cater to a broad gaming audience.
It’s token, DMT, is used to support in-game economies and as a reward to players for completing tasks. This ensures sustainability and user engagement.
Like Rollbit’s RLB, DMT utilizes a burn rate from transaction fees to make the token deflationary. It also offers staking rewards for DMT lenders, adding a layer of value retention.
There are other GambleFi platforms already out there. And as the sector expands, we expect to see even more offerings. Especially when the next bull market gets underway.
And while no sane person would say gambling is a smart way to grow your money, setting aside a small allocation of your portfolio to a pick and shovel token that facilitates blockchain gambling may just be a clever way to ride this growing sector.
After all, as the old adage goes: The house always wins.
Best,
Dr. Bruce
