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A cryptocurrency that lets people place bets on sporting events via its blockchain is seeing signs of increased adoption, including by a traditional sportsbook that will use the platform to manage its liability.
Wagerr is one of the few cryptocurrency projects with a working solution to a real-life problem, its Australian founder says.
The token lets users place bets on sporting events privately and securely, with better odds than they could receive from most sports betting websites — even if they live in jurisdictions that frown on sports wagering.
With traditional sportsbooks, “there’s lots of issues like transparency, players getting banned, or bets being limited because of the books not having the liquidity, being able to assess some of the bets,” says Adelaide-based founder David Mah.
“And also, as you know, people around the world, have no safe way to place bets.”
An early version of the platform was first launched in late 2018 but has undergone a number of upgrades and recently seems to be gaining traction.
Last week Wagerr saw more than $US1 million bet on the platform for the first time ever, with 10.5 million Wagerr tokens worth a total of $US1.2 million wagered on various sporting events.
A deflationary currency
The tokenomics of the project means that increased betting volume on the platform drives up the value of each Wagerr token.
Each time a punter loses a bet, those tokens are “burned” – taken out of circulation permanently. New tokens are created when punters win bets, but overall the effect should be to induce scarcity.
Over the past 105 days, Wagerr has burned 3.14 million WGR tokens, reducing the supply by 3.2 per cent.
The project also allows cryptocurrency holders with 25,000 Wagerr tokens (worth a total of $3,000 at the current price of 12c apiece) to function as a “masternode,” earning rewards for verifying transactions and a small payout when punters win bets. The return on investment is nearly 10 per cent, paid in Wagerr tokens, although tokenholders are also taking on the risk that the value of the coin doesn’t decline.
“We want to drive usage and adoption of the token, and that will indirectly or directly affect the price of the coin,” Mah says.
“We have a slow but steady sort of burn happening on the chain, but we’re expecting and more volume over time.”
Value Coupling from Wagerr on Vimeo.
Because Wagerr has unlimited liquidity in its system, the platform can also be used by traditional sportsbooks to limit their liability, Mah says.
Frequently sports betting is lopsided, with most customers betting on one side, exposing companies to liability if they win.
One traditional sportsbook recently started using Wagerr to reduce its liability by placing bets in the opposite direction, and the team is working on attracting more, Mah says.
Small capitalisation
Wagerr is currently the No. 818 cryptocurrency listed on Coinmarketcap with a total market capitalisation of just $US20.7 million.
By way of comparison, the top 97 cryptocurrencies all have market caps of over $US1 billion, and Bitcoin has a total value of over $US1 trillion.
Wagerr tokens were trading at about 12c apiece on Monday, up from 4c at the start of the year.
The project is one of a handful of cryptocurrencies started by Australians – others include Dogecoin, Power Ledger, RFOX and Synthetix.
Mah, a medical practitioner by trade, said he’s been involved in the cryptocurrency space for seven or eight years, but thought the early altcoins were simply “scam coins”.
“They got listed on exchanges and they would pump and dump, and people would lose a lot of money,” he says.
Eventually, he got to thinking, “why not make something that would use blockchain technology in a useful way,” and ended up settling on starting the Wagerr project with a few others.
He’s also the co-founder of another blockchain project called Jupiter, which is focused on secure messaging and file storage, but Wagerr says has been his prime project for a number of years now.
Better odds
Because the platform is nonprofit, the blockchain also offers better odds than traditional sportsbooks, Mah says.
Stockhead checked a couple of events and found this was indeed generally the case. For example, in today’s Milwaukee Bucks/Phoenix Suns NBA match, Wagerr was offering 1.67 moneyline odds on the Bucks and 2.31 on the Suns. Sportsbet was paying 1.59 on the Bucks and 2.27 on the Suns, while Ladbrokes was paying 1.67 on the Bucks and 2.25 on the Suns.
But the bets have to be placed in Wagerr tokens, rather than fiat currency. To obtain the tokens, users generally must first obtain Ethereum and then trade for them on decentralised exchanges such as Pancakeswap or Uniswap.
Mah says the team is working on easier ways to let users buy tokens as well as hedge them against a fiat currency, as well as letting users bet on events such as horse racing and non-sports events such as elections. Casino games and fantasy games are in the works as well, says Mah.
“The goal is to get as many features and be as close to traditional sportsbooks or casino sites in term of their offering, as well as to go a step further and incentivize token holders to hold the coin,” he says.
Overall, Mah says, “this market now is very promising. You might have some bear periods, but I think the future looks very bright for cryptocurrency. This emerging market is going to be mainstream in the years to come. ”
Mah says anyone interested in the project should check out its social media channels, including its Telegram chat room and Reddit forum. The platform’s sportsbook can be found here.
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