How many of the legacy structures can crypto eat up? I would personally say a lot. I know that so many people do not exactly believe in these things happening for so many reasons including regulations, and security. The latter is because of all the DeFi hacks that have been flying over the rooftops, but if we shift our attention away from that, there isn't really much left that we could identify as a "major weakness" of the crypto ecosystem.
As with many of my ideas, this is also some thoughts over a shower session.
Decentralized Sports Betting
I nearly typed "I love sports betting" I wonder where that came from cause I don't love anything betting, but I do love sports and also love crypto and blockchain innovations, so looking at it from that angle, it would be a killer dapp that I'd praise to the masses, so if you read this and can build it, go ahead, you don't even have to give me credit for my mere thoughts.
Decentralized sports betting would function quite similarly to traditional sport betting. A player places a bet, waits for the match to be over, reviews his position, is it a win or a loss?
The difference here is that it would give more control to players in terms of how they manage their balances and more flexibility to winning parties. So in a literal sense, here's how it could work.
If you've seen this coverage on Contango, you may already have an idea of how bringing traditionally centralized products to DeFi would look, but unlike Contango, two parties will be involved in each bet.
Chelsea vs. Arsenal
So let's say I wish to bet that Chelsea wins this and I go for straight winning, I would have to place a "bet order", now I would need an opposing gambler to fill my order by betting against it with Arsenal to win. I imagine that when an order is placed, similar bet options to that order contract are closed so that any opposing party will most likely take the opposite bet.
What happens when an order is filled is that both funds of the gamblers get moved into a "Time locked Smart Contract" which monitors match times with extra time depending on the type of match. This contract holds these assets waiting to make one out of three decisions upon match closure.
The first choice is to release it to person A
The second is to move it to person B
And the third would be to move it to a community wallet, maybe call it the "bet pot".
How?
Let's believe that Chelsea did in fact win the match, that would mean the smart contract would transfer all the funds to me, if not, then to the other person but where does the last part come into play?
The last part comes into play when both parties predicted wrong, so that would mean Chelsea did not win and neither did Arsenal, so being a draw match, none of us wins and the bet pot gets the funds instead.
Key Features and Flaws To Be Considered
Bet amounts may need to be equal or at least 70%. However, we may simply decide to allow the initiator of the bet to choose his limit. Meaning that he would choose the minimum amount allowed for the opposing party to counter his bet, this ensures that players can decide on how much they want to earn on bets.
Consensus will be needed for adding games. That is, the community will simply vote on needed games and it will be hosted on the network, rather than just moving all garbage to the frontend.
Oracles would play a crucial role. Yea, the tricky part, the smart contract has to be able to detect when a match is over and what the results are. I imagine that this smart contract is built with either a multi-sig of a handful of reputable token holders, or simply influenceable by community votes. This ensures that in situations where a final conclusion on the bet results cannot be attained by the contract, the community can manually review the bets and release funds to the winning party.
Limited bet options. The truth is, at least for the beginning days of such a dApp, there may be very limited bet options given that this system works like p2p trading, or futures where there has to be two parties to bet against each other. This would make it inefficient from an angle of flexibility of options but will also make room for more control.
Fees, earnings and the possible utility. The community account can be used for so many things, the fees earned could be a cut from finalized winnings and the other earnings would be from losses taken from games that both parties couldn't draw a winning bet.
Now, this earnings could be used to develop the platform, and also, could be used to counter bets from others. The community can simply vote on "bet proposals". What's the advantage here?
The advantage is that the "bet pot" or call it treasury would stand to attract more value in any way unless they lose. The reason for doing this is to attempt to bridge the gap on open orders that may never get filled. This would chase away gamblers so a way to keep the system active would be to leverage the treasury as a liquidity provider and opposing bet party. When the treasury could be voted to oppose some bet orders, given that if both parties bet wrong, the treasury still gets the money back, only when it takes the wrong bet the wealth gets transferred, which is a good thing nonetheless.
Now this is all just draft thoughts, giving more time for proper analysis could potentially end with deploying a killer bet Dapp.
Let me know what your thoughts are if any.