Introduction:

As sports gambling has increased in popularity, so have the avenues for which to place a bet. This post explores the various channels and explains why Degens is a 10x improvement from the rest.

Let’s assume Alice believes the Lakers will beat the Clippers in a regular season NBA basketball game. Alice has never gambled before and begins to walk through her options.

Directly with a Counterparty:

Alice begins by texting her friends to see if anyone would like to bet on the Clippers with her directly. The problem is all her friends are Lakers fans and want to bet the Lakers as well. She cannot find a counterparty within her friend group.

Her next thought is to search Twitter for a counterparty. However, she quickly eyes a problem. How can she trust to receive a payment from a stranger on Twitter?

Local Bookie:

Next, Alice learns about the bookie business. Bookies provide liquidity and serve as the trusted party between otherwise untrusted counterparties. Perfect Alice thinks.

Alice meets her local bookie and attempts to place her bet. Alice hopes to bet $1000 on the Lakers, but that exceeds the max bet from her local bookie. She is also a bit skeptical that the bookie will actually pay her should she win a significant amount of money.

Alice begins to look elsewhere.

Online Sportsbook:

Alice eyes some of the online sportsbooks, which generally offer higher limits. She lands on Bovada.

She is immediately pleased with Bovada. For one, they have higher limits which is roughly around $5000. Two, they provide her with welcome bonus money, something her local bookie would not provide. And finally, they provide her with more favorable odds on Lakers than her local bookie would. She decides to take the bet.

After the Lakers win the game, Alice uses her winnings and her welcome bonus to gamble on more games. She is pleased by the plethora of games and live betting options.

After accumulating a significant amount of winnings, Alice aims to withdraw her winnings. She is given two options: 1) Bitcoin: Approximately 15 minutes from when your funds are approved (typically 24 to 48 hours) and 2) Check by Courier: Approximately 10–15 Business Days via courier once your withdrawal is approved.

Alice selects the Bitcoin option and begins to wonder why anyone would bet in fiat money? Alice explores some bitcoin only online sportsbooks.

Bitcoin Only Sportsbook:

Alice lands on Nitrogen, which is an online sportsbook that operates exclusively in bitcoin.

Because it operates exclusively in bitcoin, Nitrogen does not require her to provide any banking information and only requires a username and password. After depositing Bitcoin, the entire on-boarding process takes less than 30 minutes and her information remains private.

Alice likes the ease of operating in Bitcoin until the price of Bitcoin suddenly declined 50% in one month! Her money was cut in half! She realizes by betting in Bitcoin, she is also betting on the price of Bitcoin. She has no interest in betting on the price of Bitcoin.

Degens:

Alice stumbles upon Degens, which is a peer-to-peer betting exchange. Alice discovers that Degens is utilizing the newest technology to disintermediate the bookie.

To explain more, prior to Degens, bookies were necessary because gamblers required a way to trust other gamblers to payout, as Alice discovered when she attempted to source a counterparty on Twitter. The local bookie, Bovada and Nitrogen all serve as the trusted intermediary between otherwise untrusted counterparties. For their service, these bookmakers charge juice on each bet. The most common juice used for each side of a wager is -110. That means for every $1.10 wagered, the bettor can win $1.00.

In contrast, Degens allows untrusted counterparties to gamble over the internet without the bookie/centralized intermediary by replacing them with smart contracts. Smart contracts are self-executing financial contracts that escrow funds and transfers them after some predefined conditions are met. Smart contracts were first popularized with the launch of the Ethereum blockchain in 2015.

Alice realizes that these smart contracts solve both issues, trust and liquidity, which initially rose when attempting to source her own counterparty directly. The smart contract guarantees that she will be paid, solving for trust. The smart contracts operates online without geographical restrictions, solving for liquidity.

Alice goes on to accept a bet through Degens directly against a stranger named Bob. Alice bets on the Patriots and Bob bets on the Giants in a regular season NFL football game. Both lock up their money in the smart contract, and after the game, the contract automatically pays out the winner of the bet from the losers balance. To the benefit of Alice, the Patriots won and the smart contract automatically withdrew money from Bob’s balance and deposited money to Alice’s balance. The smart contract eliminated the role of the bookie.

As Alice continued to use Degens, she realized key advantages to Degens that are only possible given the underlying blockchain technology.

Because counterparties are gambling directly with each other, the juice / fees should trend towards zero Gamblers maintain custody of their money / there is no need to withdrawal Gamblers can post their own betting lines for games The code is immutable. Gamblers form a provable track record. There are no limits. Bet as much as you want. Unstoppable winning. No central party can ban winning players.

Moreover, as this technology is running on top of the Ethereum blockchain, a cryptocurrency is used instead of fiat money. Degens uses a stable coin as its cryptocurrency of choice. Stable coins are cryptocurrencies that hold a stable price by pegging the coin to a stable asset. In the case of Degens, they use the Dai stablecoin which is pegged to the U.S. dollar. This eliminates the volatility problem that Alice experienced when using bitcoin on Nitrogen.

The below table highlights the differences. Future posts will dive into these categories in greater detail.

Conclusion:

Degens is leveraging the newest blockchain technology to create the first non-custodial, peer to peer betting exchange. As Alice noticed, it would behoove gamblers to switch to Degens to capitalize on lower juice, maintain custody, have the ability to post their own lines, build a provable track record and gamble without limits.

Be like Alice. Try out Degens @ https://degens.com/

Please reach out if you have any questions.