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ICO Analysis: DAO.Casino

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ICO Analysis: DAO.Casino

Introduction

This article was posted on Sunday, 11:15, UTC.

One of the nice features about the Ethereum project is that there are known, notable quantities operating it. One of the problems with online gambling is that often enough the operators are completely unknown to their patrons, giving them ample, and frequent, opportunity to exit the industry with all the funds they’ve had people deposit. One of the things that DAO.Casino aims to provide is a way of making such situations impossible and making trust irrelevant:

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DAO.Casino consists of a) an automated value distribution protocol acting as an mechanism of incentives and expressed in a system of Ethereum contracts b) a system that is capable of providing equally unpredictable pseudorandom numbers for the games.

In the same way that Decentralized Autonomous Organizations intend to leverage decentralized technology in order to solve the problems of fair governance, DAO.Casino wants to provide a fair experience to digital casino operators and patrons. One of the benefits of the federate approach they are taking is that people who have previously used DAO.Casino-powered tables will feel more secure in approaching new ones – a ripple effect of “trust” will occur, and all casino operators who dutifully operate using DAO.Casino resources will be able to benefit from this. This makes the proposition multi-fold: you get the association of DAO.Casino, which has marketing advantages; you get the high-quality pseudo-random number generation, and you get the tertiary benefits of a system that is ready to perform.

The token of DAO.Casino named BET is meant as a working token, rather than a dividend producing one. Those who really want to maximize the value of BET tokens will want to actually use them within the gambling ecosystem, and as such they can generate more tokens by investing gambling houses or by providing random number generation services. The rest of the value proposition of this token will be earning through speculation, and while that is far likely to be the way that most people profit from BET tokens, it is simplistic enough that it bears little explanation: one way to earn on BET tokens is to simply buy now and sell at an opportune rate, or do the same after they’ve landed on the markets.

One thing that should be noted is that nowhere on the DAO.Casino website is it noted that they are associated with the actual Ethereum DAO, which is responsible for the works of Ethereum proper.

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Putting BET Tokens To Work

As earlier noted, the obvious way to make money on BET tokens is through speculation. BET tokens have a lot of hype around them, and the cryptocurrency community is certainly hungry for solutions that will enable trustless, seamless, and fair betting. What is not clear is how many of these solutions the market can bear. Will there be multiple solutions for each cryptocurrency, or one masterful solution that applies to all blockchains? The future is uncertain regarding this, but in BET we see an entrepreneurial opportunity in addition to the regular speculative opportunity that comes with ICOs.

To make money in the BET system, you have two main options. The first is to acquire the tokens and use them to help bankroll either an existing casino which switches to the token or one which starts out using the system. Obviously, a better option is those who already have a proven track record of profit making, who are moving to the system to improve its profitability due to the lower cost of operation proposition offered by BET. New casinos which pop up thank to BET will still have the potential to do things wrong – every casino operator will have various options, levers, and switches they can change in order to modify their profitability. You can bankroll any game which is using the token, which makes for a nice variety once the system gets off the ground.

You could also, of course, start your own casino within the BET token ecosystem. If you were to do this, DAO.Casino aims to make this process easier. Your cut of profits, by default, would be around 25% of the profits. The rest would go to those providing random number generation services, those referring new players, and development. These are numbers that can be modified – you may not need any for development if you are buying the technology pre-made, and this portion of the funds can either be spread among the rest or given directly to you. One can envision game developers playing an important role in this economy – those who are able to provide customized games at a lower rate will be successful, while those who want to work individually with casinos will also find a niche. Casinos are all the same at heart when they are legitimate, just wagering on unknown future numbers, but the dressing and the methods by which these numbers are reached is a crucial point of competition between them. DAO.Casino merely wants to play back-end to a new type of casino where trust in the operator himself is no longer part of the equation. While reputation will still be important, even in this situation, it will be less important, thereby creating new opportunities for unknown entities.

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Another way to make BET tokens is by providing random number generation services. While this is not fully finished yet, DAO.Casino envisions a system where any token holder can lock funds and then earn more funds by providing random integer information to games. To be fair, these contracts would need to be publicly available. The system punishes bad behavior such as attempts to predict outcomes, which should encourage good behavior among pseudorandomness providers. From the DAO.Casino whitepaper, which has changes that can be tracked via Github:

To participate as a Random Number Provider a participant is required to a) lock their token in the contract b) send data to the RNG contract from which the PRNG will be generated. Intentional or unintentional , malicious behaviour i.e. an attempt to predict the outcome of the game will result in the locked tokens to be distributed as rewards to other participants. Because of this staking system Random Number Providers are somehow similar to miners in a PoS system.

Token/Proceeds Distribution

BET tokens will be used to denominate any games run in the DAO.Casino system. The initial value of the full supply has a cap of $25 million, and the goal is to distribute roughly over a billion tokens. 10% of tokens will be allocated to the founding members, another 10% to the DAO.Casino legal entity, and another 10% to those who took part in pre-crowdsale bounties.

The proceeds of the token sale will be used in the following way:

  • 5% to legal costs, presumably such as investigating getting legal in illegal jurisdictions.
  • 15% to marketing.
  • 20% to operational costs.
  • 60% to development, including development of the random number generation service.

It should be noted that pseudorandomness is a highly theoretical department of mathematics, and that a research and development project in this realm could easily never return a result. As such, we’re shaving a full 1.75 points off DAO.Casino’s total score for the potential that this part of the project stays in the research phase indefinitely.

The Verdict

Based on everything we know, we can give DAO.Casino a safety rating of 5.25 on a scale of 0 to 10. It is experimental, but it is a worthy experiment that people are going to be interested in. The investor’s chances of recouping his token cost at market is good, but the long-term viability of the project is in question as other plays crop up to compete in the same space. Let’s break it down a little more, looking into the various aspects of the project.

Viability / Risk

The technology presented by DAO.Casino is interesting and will certainly see some adoption. The risk is in whether or not its adoption will be picked up versus other plays in the same space (someone could operate a PRNG service on SONM, for instance, which performs better) and whether or not DAO.Casino will become the primary mode this is done or not.

Growth / Return Potential

The value of the token is likely to rise, nevertheless, but its rate of growth will be very closely tied to the ubiquity of DAO.Casino outfits. Betting on BET tokens is trusting that such outfits are definitely going to proliferate.

Value Proposition

DAO.Casino offers the ability to become a casino operator, and historically, some of the wealthiest people to come out of the cryptoeconomy have been such. Erik Voorhees was once a casino operator, for instance. This is a lucrative opportunity if all of the rest of the fundamentals are there, but like all investments, you are risking that the rest of the project will turn out right. Simply being there at the right time will not be enough with DAO.Casino.

Investment Details

There are early-bird bonuses available to those who invest sooner than others. The rate at time of writing is 1800 BET tokens per Ether invested. This rate drops by 100 tokens every 24 hours, and the token sale has no stated end date. It does, however, have a maximum of 83333.33 Eth to be raised, or about $25 million. At time of writing, it was halfway to that goal.

US participants are disallowed, but as always there are workarounds to this. It does not say that US participants would not be refunded, so there is that, but the wisest way to go about this is simply to have an agent in an allowed jurisdiction act on your behalf. Go here for more information on participating.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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P. H. Madore

P. H. Madore

http://phm.link

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link

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