How NFTs Can Disrupt the Fantasy Sports Industry
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How NFTs Can Disrupt the Fantasy Sports Industry
@Ishan PandeyIshan Pandey
Crypto Veteran. Tokenization, DeFi and Security Tokens - Blockchain.
Ishan Pandey: Hi Christian, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Tradestars?
Christian Hentschel: Hello Ishan, thanks for having me here today. I’m Chris, a software engineer and entrepreneur. I love tech, and I’ve been in the blockchain space for +4yr now. Mainly in the gaming industry. I contributed to many projects like Decentraland.org, Decent.bet, Pop chest, and some small others before starting TradeStars.
I was at Decentraland in December 2017 when CryptoKitties released the first version of their collectables, and at that moment was a revolution. The crypto community started to work on a standard for this (that became the ERC721), and the team at Decentraland used it to sell around 90,000 of virtual land around April 2018. Some of the items were sold for astronomic figures, so it became natural to me that there would be a need or common use case to fractionalize these assets and allow fractional ownership. Because of my background in the Fantasy Sports space, I started thinking around these concepts when the TradeStars idea appeared.
Ishan Pandey: Can you explain how the trading of fantasy stocks of athletes works? Further, what are the regulations around it?
Christian Hentschel: Fantasy trading of athletes is a new concept applied on a blockchain. The fractional NFT implementation represents athletes’ real-life performances, and on top of a DEX, users can buy/sell fractions of these NFTs. Once users log in to the platform, they can fund their account with FIAT offramp or by connecting an external crypto wallet.
Right after this, several Fractional NFT markets are available for users where they can buy fantasy stocks. At the implementation level, this process feels like using Uniswap, for example. By building a portfolio of fantasy stocks, users can start mining tokens which is the company governance token, and the APY rate at which they receive it is influenced by the portfolio’s athletes performance on the field. This is called "gamifying DeFi" by connecting economics and sports together. This is a novel concept for both the blockchain and the fantasy sports industry.
The legal landscape is very different depending on the country or region. In many of the jurisdictions, you may need a sports betting licence to operate. On this aspect, the legal opinion of a lawyer is much appreciated as each platform and its framework is different.
Ishan Pandey: Please explain how the Fantasy NFT marketplace model functions and how the entire system is conceptualized?
Christian Hentschel: The whole Fantasy NFT marketplace concept is based on the connection between economic mechanics and sports performances.
The athletes’ fantasy stocks have their prices impacted by the real-life performance expectations (and results) and depending on your knowledge of the sport. You’ll be able to maximize the portfolio in order to farm the token at the highest rate. The tokens can unlock or access different tier of contests and rewards inside the game and have governance power.
Ishan Pandey: What are your views on NBA Top shot and the platform’s recent $7.5b+ valuation?
Christian Hentschel: I believe the response is impressive, yet that’s just the tip of the iceberg for what we will see blockchain and the NFT concept will disrupt.
The NFT idea is simple yet so powerful that it can disrupt the whole world. I think about real estate, CO2 certificates, any asset that can be legally tied to, and verified with, a non-fungible digital record. I have no doubt we’re going to see more and more implementations around this, not only in the gaming/sports sector in the years to come.
Ishan Pandey: According to you, how will blockchain-based gaming affect the traditional gaming ecosystem?
Christian Hentschel: It will absolutely change it. No doubts about it. Just think of all the digital real-estate out there in different games and all that will be created, owned and possibly traded by the users. Think of interoperability, like buying a look for your avatar in Decentraland and selling it on your digital store on the Sandbox, or other things alike. The gaming ecosystem will profoundly change by giving users actual digital ownership of the things they love to spend time with.
Ishan Pandey: What are your views on the Play-to-Earn concept, and what current impediments do you see for its wide-scale adoption?
Christian Hentschel: We’re already witnessing how all these interesting concepts around ownership and interoperability are changing and enabling new business models.
For me, the play to earn model is to the gaming industry what the shared economy concept is to the tourism, vacation rental or delivery industries, to name some—a game-changer.
But to fully unleash its potential and mass adoption, the main challenge is to focus on making the technology as friendly and accessible as possible. We should be able to provide a great user experience without the need to explain about wallets, private keys, signatures, etc.
Ishan Pandey: Ethereum rising transaction fees are proving to be a bottleneck for the DeFi ecosystem. According to you, why Matic layer 2 is the solution for decentralized applications that wish to build on Ethereum?
Christian Hentschel: I would definitely recommend Polygon to deploy a dApp. I believe the Polygon team is truly exceptional, hard-working and trustful, and has come with the right set of tools to help solve the scalability issues we’re having currently in Ethereum today.
Ishan Pandey: Do you think combining Blockchain and Fantasy Sports will induce mass adoption of blockchain in the mainstream sports industry?
Christian Hentschel: I do believe so. I think Fantasy Sports is a fascinating use case for blockchain technology and we’re working with the idea to help push the blockchain technology to a massive audience.
In our case, we expect many use cases inside the game to have opportunities in the offline world. This is very interesting and an opportunity in the sports industry in particular, and through actions with teams, leagues and athletes, we will start bridging and making the sports world and blockchain technology closer. And I fully expect we will lead in this category.
Ishan Pandey: There is a rise in the use of smartphones and subsequently hefty restrictions posed on sports betting worldwide by the regulators. According to you, what is the state of fantasy sports currently and which jurisdictions are best equipped to accommodate fantasy sports platforms?
Christian Hentschel: The state of Fantasy Sports varies from region to region. I believe the US Draftkings is leading in the category, but you see companies like Dream11, in India that validates the model in other parts of the world, where I believe there are enormous opportunities for this model to flourish. The current Draft Kings model has already been there for 12 years and leveraged mainly the rise of the smartphone and regulations around skills-based games. I find the model changed, and new users are looking for other types of interactions with their sports passion. I believe India, MENA and south-east Asia are showing a growing appetite for this type of products following already shown trends of the more developed old markets.
The purpose of this article is to remove informational asymmetry existing today in our digital markets by performing due diligence by asking the right questions and equipping readers with better opinions to make informed decisions. The material does not constitute any investment, financial, or legal advice. Please do your research before investing in any digital assets or tokens, etc. The writer does not have any vested interest in the company.
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