I want to start off by saying that I love this narrative and sector in crypto. Since I got into the space back in 2017 it was blatantly obvious to me that blockchains were going to impact the gaming sector in a profound way, how and when are still to be determined but I knew it would happen. Over the past couple of years, I have been following a cartoon’s advice in the space and an interesting subsector in the gaming space started to catch my eye, that subsector was GamebleFi.

Gambling and greed are a part of human nature. Probably a bit on the darker side of what most people are comfortable talking about out loud to their friends. When this sector was brought to my attention it was advised to build a business around this market, personally did not want to go off and do this so I thought the next best thing was to invest in the space.

Before we dive into GambleFi, please note that this article is only intended to provide an overview of the GambleFi narrative in cryptocurrency, featuring key protocols in the space, and should not be taken as promoting gambling. 

The Opportunity

The traditional gambling sector has seen massive growth over the past couple of years due to COVID and looser regulations on sports gambling. The gambling sector in the United States is estimated to be valued at $270 billion (source) and is expected to grow to $1.4 trillion in the coming years, I see an opportunity to find real gems when I read stats like this.

To date, any traditional casino has an engrained advantage against the people that come and use their services to ensure that the business is profitable. That’s why the expression ‘the house always wins’ exists. With the introduction of GambleFi and the inherent nature of blockchain technology users can now have a a provably fair gaming experience.

The Risks

• Regulation: The regulatory stance on the sector is still widely grey and has little oversight. Narratives in crypto move really fast but regulators do not so.

• User Experience: Across the board, I think crypto has a user experience issue that hinders the ability for new people to join networks. While more people are coming into the space daily, the usability of a lot of things is hard for normies to comprehend

• Geoblocking: Right now, if you are in the United States you have seen a huge rise in geoblocking for a lot of defi projects. This is due to the regulations around crypto being wildly unknown. How is a space supposed to grow to new heights if a massive user base is blocked from using the platforms?

• Winner Take Most?: Winners in markets tend to take the most. While I do not think that is entirely the case with gambling as a whole because there are so many casinos/platforms out there, I think betting on the winners always results in the best returns. Will all of GambleFi projects be winners? I don’t think so.

GambleFi in 2 Minutes

GambleFi, in its simplest form, is just online casino venues that leverage the power of blockchain technology. These projects are highly addictive, I know this because I was testing out $YOLO on Blast L2 and found myself making outrageous bets while poking a bear. I am not even a gambler, but when I felt the power behind these games I knew that they would 1) only get better and 2) have massive opportunities for upside.

The best parts about GambleFi are the fact that transparency and verifiable fair results can be produced from the protocols. The biggest thing that differentiates a lot of these platforms in my eyes is the tokenomics behind them. Some platforms in the future could offer revenue share to holders or create incentive structures for users that pushes up the price of the coin.

Key Takeaways

• GambleFi creates transparency and fairness in the gambling industry

• Gambling is already highly addictive, now create fun games and innovative on ways for people to partake in this form of entertainment = having a good-looking recipe

• Unclear regulation around this sector of the market creates a big risk to holders of these coins

• GambleFi is not new, it has just recently taken off – Is this a winner-take-most market? Let’s see

Projected Growth of Crypto Gambling – Why Now?

We already went over how much growth is projected to happen in the gambling space as a whole, I don’t think it is necessary to go over that point again. We believe that people will still gamble and the overall trend will grow. What I think we are seeing in the crypto space right now is that a winner is making its way in the space that not only started a narrative shift but also has real partnerships that excite me.

Thesis

When I identify trends that I see actually getting traction and I decide I want to invest money into the space I look for a number of things. I want to see a big trend with room for growth (obviously) and I look to identify the winner in the space to bet on them. Winners always result in asymmetry. This is my basis on how I make investments in the first place. Here is a YouTube Video I created explaining my thought process for making investments, I learned from VCs who made hundreds of millions off investments in Honey and various software businesses.

Rollbit

Here are some analytics on Rollbit (Dune Dashboatd: cryptokorto) so you can understand the dominance that they are showing in the space right now:

Starting in July of 2023, the whole narrative took off when Rollbit migrated over to Ethereum, a move that would later make all the sense in the world. Rollbit has a growing user base and has the majority of the volume on Ethereum right now. Not to mention that they have an interesting component going on with their tokenonmics that is hard to unsee.

Rollbit has everything any traditional gambler or Web3 degen could want and more. Betting on the king of space has always proven to be a winning strategy in any realm of investing, whether it is VC or crypto.

Tokenomics

Back in 2021, I remember seeing Binance (the then-largest Centralized Crypto Exchange in the world) have a massive price spike. Being someone who got into crypto back in 2017, the only platform I really used was Binance and holding the underlying token at the time gave me the benefit of saving on trading fees. Once I discovered Coinbase and just started to keep everything there, I ditched my BNB and Binance as a whole and ultimately missed this move. Come to find out, they were buying and burning their token and when a massive influx of demand came in the token shot up in price to insane heights.

All this to say I think we see a repeating patent with Rollbit.

Rollbit is buying and burning their token at crazy rates. At this point, they have burned close to 50% of their token supply and continue to take more off the market with the price being as low as it is. You can find a dashboard here. (Can only access with a VPN)

Rollbit is a business that is already making (at the time of writing this) close to $4 million per day. They use a portion of those revenues to buy their token back and permanently take it off the market. Mixing this with the potential that we see a massive hype cycle in the crypto space in general over the next 12 months I think the opportunity of generational wealth is in front of me.

At the end of the day, the best marketing in crypto is always going to be number go up and until that happens I have will patiently wait to see how this plays out. At the end of this month, Rollbit will be burning the rest of the supply that was on Solana. No one really knows how many coins will be taken off the market maybe other than the team so I expect an exciting couple of months.

Final Thoughts

There are a number of underlying factors that play into the growth of gambling particularly in the United States. People are trying to make it all in one swing and degeneracy is continuing to be a growing trend here. Look around. People are willing to risk it all for the chance to “make it” and these platforms like Stake, DraftKings, and FanDuel are capitalizing off it. I am not here to argue whether or not capitalizing off people’s addictions or human greed is a good or bad thing, I am here to make money, just like everyone else. Argue the ethics with your pastor.

This is an article that shares the insights I have gathered about a particular space that I am interested in. I have a vested interest in Gamblefi and Rollbit, this is not investment advice and should be only used for educational purposes. This is crypto, you could lose money and I could be wrong with my assumptions. Please, do your own research and come to your own conclusions.