On Decentralized Gambling: The WINR Thesis
Decentralized gambling is one of the most appealing use cases for crypto.
Traditional gambling is a murky world, a low-innovation sector where gatekeepers and third parties make money with little or no transparency.
We all know the house is always winning, but does it have to be this way?
Crypto promises to bring a breath of fresh air to the gambling industry by creating decentralized casinos.
As GCR says, “not everyone can fly to Macau or Vegas”.
So, where can we gamble our “hard”-earned money?
This article focuses on WINR, a decentralized gambling protocol attracting renewed attention due to its upcoming catalysts.
Here’s the WINR thesis.
On WINR Protocol
Not only does WINR run its own games on its front end, but it has also established itself as a decentralized and trustless protocol, allowing front-end game operators to connect and deploy seamlessly.
Decentralized Games (Front-end)
Decentralized Gambling Infrastructure (Back-end)
Furthermore, the flexibility of WINR allows both expansion into Web3 games and traditional betting markets, targeting sectors such as sports betting, lottery, or poker.
The WINR protocol was initially launched on Arbitrum and only recently expanded on Solana on 23rd May 2024, with plans to launch on Base and Fantom soon.
Why start with SOL? Because the network can support fast throughput and a low fee per transaction, enabling gaming-related use cases.
The WINR Product Stack
The WINR product stack goes beyond being a simple decentralized gaming casino.
Smart Wallets: Connect to all platforms and execute cross-chain transactions using a single non-custodial wallet.
Smooth process of managing and funding wallets.
Faster transactions, without the need to approve every single transaction.
Liquidity Engine: This is for developers who want to build their games on WINR. The WLP token works as a counterparty for any game, which can be plug-and-play to get immediate access to liquidity.
The WINR Liquidity Engine trickles down into token utility for the WLP token, which represents the assets in the WINR Liquidity Pool:
Users can buy WLP tokens and join the Liquidity Pool, earning a % of the total revenue of the protocol.
Lower Risk: WLP token acts as an index, comprising several assets such as stablecoins, BTC, and ETH, reducing the overall risk and volatility. This is a similar model to that employed by GMX, where their GLP token also acted as a counterparty to all trades on the platform
Fully liquid & Frequently Rebalanced
Frontend Operators:
Anyone can seamlessly integrate with WINR and earn “20% of revenues generated” without the related overheads. Games can instantly integrate into the WINR ecosystem through the DAO approval and benefit from vWINR emissions from their smart contract and earn commissions.
Benefit from a Non-custodial wallet and support for Account Abstraction, which significantly improves user onboarding and off-ramping and allows instant betting.
Benefit from the fastest on-chain Verifiable Random Number Generation Function (VRF), guaranteeing randomness and transparency, saving cost and ensuring smooth execution with its <0.3 seconds.
Benefit from loyalty programs and engagement thanks to immediate cashback on bets and additional bonuses.
On-chain Game Creation: WINR aims to be the de facto backend sustaining the new decentralized gambling industry, supporting creators with a backend to launch gambling and gaming platforms.
WINR game creation is:Cost-effective
Transparent
Safe
Gaming Casino: Besides acting as a backend, WINR hosts several games on its platform.
Perpetual Trading: through its degens.bet, WINR allows up to x1000 leverage on crypto tokens with no slippage, low fees, and one-click trading.
Real-time market data for high-leverage perpetual trading.
Smart position sizing and risk management tools.
Are you still following?
Here’s our WINR works.
The WINR liquidity pool bankrolls all the games built on it, taking the risk and acting as a counterparty to all games.
All the risk parameters are governed by the WINR dao, composed of WLP holders.
All the incoming and outgoing flows from the games are managed and processed by the WINR protocol, which automatically rebalances the WLP assets (and earns swap fees) through buying or selling.
The platform profits are split between LP Providers and WINR Stakers.
Therefore, users effectively become the house.
Once we have introduced the protocol, it’s time to go through the “WINR Thesis,” which sees WINR as one of the most interesting projects to watch with the upcoming launch of their WINR chain.
The WINR Chain
A decentralized, self-sustaining, and deflationary environment for the online gambling industry.
WINR has announced the launch of WINR Chain, an Arbitrum Orbit Chain focusing on developing decentralized gaming.
This seems to be a common trend lately, with others, such as DMT and Degen, launching their app chain, whether as an L2 or L3.
Why is WINR building its chain?
In the words of Jack, one of the founders, building their chain would let them prioritize features that would allow cheap micro transactions, typical of gambling.
“It still costs around $0.04 up to $0.1 to finalize a bet on a Layer 2. even more with the upcoming WINR v2, as there are many contracts that talk with each other on each bet and WINR VRF response tx. Any general-purpose rollup or L1 will always inherit the congestion issue or fees going high out of nowhere, and thus, it's not viable for tens of casinos running on it—but WINR Chain is”
This way, WINR explains why they could never have a feasible model on any other general purpose rollup or L1, which justifies their choice of deploying their chain, focused on cheaper and faster transactions.
The concept of launching an App Chain doesn’t apply to any crypto niche, but for gambling specifically, different needs arise that cannot often be supported by existing networks.
Furthermore, while app chains sacrifice some of the network effects typical of building on other chains or settling transactions in Ethereum, WINR's purpose is to launch a decentralized casino chain that can host and deploy any game.
For this reason, launching their app chain mitigates the loss of network effect as a special-purpose chain for decentralized gambling poised to attract the new wave of crypto games.
WINR chain will host all decentralized games on a single chain and will be powered by the Arbitrum Orbit stack.
Users will be able to process bets on-chain in just 2 blocks, thanks to WINR VRF.
Why Arbitrum Orbit?
Devs have complete control over privacy and permissions: launch of permissioned and permissionless dApps.
Reliability of gas prices: eliminate risks regarding gas spikes due to events outside of control
Fast iteration: customizable and flexible tech stack allowing fast iterations
Benefits of WINR Chain:
Cost Efficiency: no congestion issues, better performance and reliability due to greater control over network parameters to develop custom solutions.
Decentralized and transparent: decentralized stakers secure and validate transactions and get rewarded. The protocol aligns incentives between WINR holders, the protocol, and project launching.
Easy access to Liquidity: integration of the WLP for all platforms on WINR Chain.
Dual Utility for WINR: WINR will also be used as the base gas token, and a portion will get burned, creating deflationary tokenomics.
To date, the protocol has burned over 8.7% of its total supply, reaching a float of 71% (circulating/total supply), which is a reasonably balanced figure to ensure long-term success and reduce token emissions.
The current tokenomics is also boosted by real yield, generated from the platform's revenue distribution.
Here’s what the shared revenue looks like for March 2024: over $250k!
This is also reflected in the positive performance of the V1 vaults.
Building on Arbitrum
WINR also secured an Arbitrum STIP grant, which gives the protocol over 250k ARB to distribute over three months, starting in mid-June.
WINR will also benefit from the technical upgrade to the Arbitrum tech stack.
In particular, the upcoming Stylus upgrade allows developers to develop dApps in multiple programming languages, including Rust, C, and C++, giving them more capabilities to develop advanced games on WINR.
For more info on Stylus you can refer to my article:
More alignment between stakeholders and showing commitment to long-term success:
Furthermore, as a testament to their long-term focus, WINR recently approved WIP-5, proposing an extension of the vesting schedule of Contributors and the WINR Labs (core team) for 9 more months, slowing down token emissions.
On Games and UI Updates:
Aside from protocol improvements, WINR is committed to continuously improving its suite of games and the protocol UI.
Launch of new games:
UI / UX updated:
Once WINR opens up the SDKs, existing games will be able to publish on the protocol easily.
What’s next?
Q3 24
WINRZ NFT mint on Solana
Creation of single-sided pools for users to play games
Fantom Launch
Q4 24
Badges system for reputation
Chain expansion
Unified WINR app dashboard page for all frontend operators
Launch of WINR Chain
Cross-chain revenue distribution
Release of new games
WINR Game Engine and SDK for game developers,
SportsBet: for decentralized sports betting
Sources and other Threads on WINR:
https://x.com/onchainjack/status/1791433947391377449
The speed of WINR chain: https://x.com/onchainjack/status/1784154143591977324
STIP Funds: https://x.com/WINRProtocol/status/1795085119046266890
Protocol Revenue: https://x.com/WINRProtocol/status/1774796711010980321
https://x.com/onchainjack/status/1792527158637711788
The WINR Thesis: https://x.com/NebulaeVCEN/status/1795777140174340212
https://x.com/sjdedic/status/1790034714285285629