Tokenization refers to the process of converting an asset or anything of value into a digital token that can later be traded on a blockchain platform or used as a chip in an online casino. Virtually anything can be tokenized, including the profits casinos make.
In this article, we explore the tokenization of betting and the rise of different tokens that are powering crypto casinos toward a new era of iGaming.
The Rise of Utility Tokens in Crypto Casinos
As their name suggests, utility tokens are designed to serve a particular purpose or utility. In terms of crypto casinos, they are used as coins to power the gameplay and facilitate transactions.
For example, players can use utility tokens to unlock platform-specific features like access to exclusive games and features.
Moreover, utility tokens can be used to reduce payment fees, much like on certain exchange platforms. Take Binance.US, for example. Binance allows the use of its native token (BNB) to reduce trading fees by between 10 and 25%.
Ultimately, utility tokens can sometimes offer additional rewards or incentives, making the gaming experience more engaging and potentially more profitable.
Utility tokens integration into crypto casinos demonstrates a clear shift towards a more efficient, user-friendly, and innovative online gambling environment.
For example, utility tokens may enable purchases within the game, such as acquiring unique avatars.
Governance Tokens: Empowering the Betting Community
Governance tokens can be seen as getting a step closer to decentralized decision-making, even when crypto casinos are at stake. These tokens function like shares in a company, giving holders a vote in the casino’s governance and development.
Another purpose of governance tokens is to give holders a share of the profits. So, by getting governance tokens, you are effectively procuring a share of the casino and all the benefits that come along with it.
Governance tokens grant players a say in casino operations.
The same thing has happened with governance tokens from DEXs like Uniswap or YFI from Yearn. Finance, which has gone from $790 at its inception in July 2020 to close to $25,000 by December 2020, posted a market cap value of $740 million.
Maker DAO, which has fully transitioned to community-based governance, is a good indicator of how the betting community can get its voice heard and directly impact the development of the industry.
Benefits and Challenges of Tokenization in Betting
The tokenization of betting brings significant benefits, such as enhancing transparency and security in transactions with utility tokens. Every transaction is recorded on a decentralized ledger, making the process transparent and easily auditable.
This sort of transparency is vital in building trust among users, as it guarantees the fairness of games and the legitimacy of transactions.
Governance tokens, for example, facilitate decentralization, allowing users to participate in project governance, an essential element of the DeFi ecosystem that crypto casinos are definitely a part of.
When it comes to security, tokens are a game changer. Take the Ethereum blockchain, where transactions with tokens like ETH are secured and verified across multiple nodes, making it extremely difficult to tamper with transaction data.
The tokenization of betting enhances transparency and security in transactions, recorded on a decentralized ledger for easy auditing.
On the other hand, governance tokens may end up in the possession of just a few individuals, just like with the shares of any company so that power can be easily concentrated.
Also, there are regulatory concerns. Few reputable gambling jurisdictions, save from the Malta Gaming Authority, are willing to give cryptos and tokens the green light.
Ultimately, there’s a growing need for user education since not many understand the application and the advantages thereof, even in the tech-driven community of crypto casino players.
Examples of Tokenization in Online Casinos
It’s safe to say online casinos are no strangers to tokenization, but few do it like BC.Game and BetFury.
BC.Game
BC.Game stands out with its extensive selection of over 80 cryptocurrencies, offering a diverse range of options for users to get into their betting groove with more confidence.
Moreover, BC.Game innovatively tokenized its gaming license. After securing a license from Curacao Interactive Licensing N.V., they digitalized it by uploading it to the decentralized storage blockchain, IPFS.
Subsequently, the license was minted into a Non-Fungible Token (NFT) compliant with the EC-721 standard and transferred to BC.Game’s Ethereum Name Service (ENS) account.
BetFury
On the other hand, BetFury uses its native token, BFG, to deliver smooth transactions within its platform, making BFG an integral part of the casino’s gaming and reward systems.
The Future of Tokenization in Betting
The future of tokenization in betting is marked by significant advancements, especially in terms of making financial services more transparent and open.
There is no need for intermediaries, which gives individuals more control. Standardizing tokenization is another step in the right direction, which can result in seamless token transfer and exchange between blockchains and reduce transaction costs.
On the flip side, the same standardization should apply to regulatory compliance, which is one of the biggest challenges of tokenization.
Without greater adoption, investors can’t get the protection and predictability they are after and the economic stability necessary for an even wider penetration of crypto tokens in the casino industry.
Final Thoughts
Throughout this article, we’ve delved into the dynamic world of tokenization in betting, especially how utility tokens streamline gaming transactions.
In contrast, governance tokens grant players a say in casino operations — the practical examples of BC.Game and BetFury exemplify these trends in action.
Looking ahead, there is a bright future where these tokens further democratize and enhance the crypto casino experience. However, they must first navigate the complexities of regulatory frameworks before growing into more than just a feature of some crypto casinos.
