1/ I've been reflecting on the Augur launch and noticed several of the top markets were focused on the World Cup. I’m interested to see how important sports gambling will be as a vertical to drive mainstream adoption of the Augur protocol and Dapps in general.
Thread below...
Thread below...
2/ While new creative financial markets that weren’t possible before will likely be the most innovative use and largest total addressable market in dollar value, the overall number of users likely to participate in these will be low and likely limited to sophisticated investors
3/ Therefore sports (or esports) gambling is likely the largest addressable market by number of users that could be onboarded into crypto through new gambling products that don’t exist today or are 10x easier, better, cheaper than centralized gambling services
4/ As @mikeraymcdonald pointed out, it's important to recognize that the UI needed for mainstream use won’t come from Augur itself but will come from independent developers building on top of it
5/ The first necessary improvement is to combine Augur with 0x as @tomhschmidt outlined to create relayers for sports betting with off chain order books that could then be abstracted away using the improvements of 0x V2 to create a decentralized FanDuel - blog.0xproject.com/18-ideas-for-0…
6/ However, for mainstream adoption, there would still need to be an easy to use non-custodial mobile wallet like @toshi or @Balance_io with a stablecoin integration and human readable addresses which means an experience similar to FanDuel is likely still several years away.
7/ Once the UI is there, relayers would need to invest in marketing similar to how @FanDuel blanketed the country driving growth in Daily Fantasy as well as offering promotions like “Get a $10 free bet when you join” by airdropping stablecoins to new user accounts
8/ At the same time, with the recent Supreme Court ruling, there will be heavy competition in centralized gambling markets. So what benefits does a censorship resistant gambling protocol provide in a market where gambling is no longer a censored activity? goo.gl/1XHzZH
9/ I’d argue the biggest benefit is creation of non-custodial gambling apps. This lowers barrier to entry for developers to create and iterate on new products as they can focus on the front end UI/UX without having to build the infrastructure for holding and transmitting funds.
10/ On centralized gambling apps, users are limited to the bets that the app chooses. Augur relayers can crowdsource and offer more bets as Ben Davidow described this best as Augur “democratizes speculation" by creating "Wikipedia meets the stock market" goo.gl/hx5VFW
11/ Centralized gambling apps need to dedicate resources towards building their own proprietary backend infrastructure as well as meeting compliance required from holding funds. Therefore, they need to charge higher fees (10%) to return their investment.
12/ They also are responsible for setting odds and run the risk of the house losing money if their odds don’t get people to wager equally on both sides of the bet. Will they start using Augur as a reference or hedge for their odds? goo.gl/5Wij4F
13/ An Augur relayer could be built without this overhead allowing them to charge an order of magnitude lower fees (1%). They could choose to take exposure to a bet by adding liquidity as a market maker or they could just monetize through fees and not take the risk on bets
14/ The other major unknown here is how Augur relayers will be viewed by state and federal regulators. A major driver for states to legalize sports gambling was to generate tax revenue. Will non-custodial gambling apps be responsible for paying this tax?
15/ Ultimately, over the next few years Augur relayers have the opportunity to drive a new category of gambling products that could create the next driver of retail speculation built on top of permissionless blockchains bringing them one step closer to mainstream adoption.
16/ If anyone is interested in building an Augur relayer - reach out to @HendoVentures or the @0x team.
Also congrats to @joeykrug and @Disruptepreneur on a successful launch!
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Also congrats to @joeykrug and @Disruptepreneur on a successful launch!
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