BetProtocol $BEPRO Token Utility and Economy

If you haven’t already joined our Telegram, click here to join the conversation! Please also read this article for a quick checklist of why $BEPRO is a Utility Token!

Introduction:

In this post, we’ll be discussing BetProtocol’s native utility token BEPRO (pronounced “Be Pro”). The main points to address are:

  • Why do we need our own native token?

See this article for more info and also our Whitepaper.

Part 1: Why does the BetProtocol ecosystem need $BEPRO token?

  1. Gas Fees

See this article for analyses on each of these topics and also our Whitepaper.

Part 2: Why not use Dai or other cryptos like ETH for gas?

  • Independence: BetProtocol is a general purpose betting protocol for blockchains. Using any one main chain’s currency or a token on any particular main chain would cripple our utility and usability on other blockchains. We currently have an Ethereum implementation and are working on at least two other main chains at the moment. The idea is to keep our options open and be successful on any base layer blockchain.
  1. Beneficiaries of our Charity Fund and Operator Bootstrap Fund

Therefore, it is imperative that BEPRO token is used and not another network’s token because we want the next generation online gambling community we are building to decide these things, since they are informed, motivated and have skin-in-the-game.

Part 3: What are the BEPRO use cases for Operators, Oracles and Players?

Let’s first start off with what we are offering to our Operator clients:

  • Full tech stack for deploying a fully regulated, secure and scalable betting applications: Backend, Operator Dashboard, Frontend, Initial Design

Now, we will explain why Operators need to pay for this in $BEPRO as a staking as pre-paid and on-going fuel model. (It’s like a car almost. You have to fill the tank first, then keep filling it up again when the gas runs out. Developer Bootstrap Fund beneficiaries get their first tank on us!)

Quick Peek at the Operator Dashboard

Operators: Gas Fees, Prevent Wash Trading, Liquidity-of-Last-Resort

Deployment of betting dApps on BetProtocol and transaction use costs will be handled by BEPRO utility token acting as pre-paid fuel. Developers will have to fuel their dApps with BEPRO token in order to deploy on the network and transact bets on their dApps. BEPRO token is designed much like how gas functions in an automobile. Initial dApp deployment (startup) will spend BEPRO tokens, as well as continued dApp running (transacting bets) will spend BEPRO tokens.

BEPRO tokens will be deducted from dApp balances according to the amount of the bets’ value executed by the dApp. As transaction betting volume and values increase in a dApp, the faster they will run out of BEPRO tokens. dApps will need to acquire more BEPRO tokens from the secondary markets to replenish their supply to stay in operation.

Demand for BEPRO is therefore a function of the number of live betting operators, their aggregate betting volume and values of their bets.

BEPRO tokens expended as fuel in this manner will go to BetProtocol to fund on-going development and maintenance of the network, as well as a portion to our Charity Fund and Operator Bootstrap Fund.

How do Operators get setup with regards to BEPRO tokens? Here are the steps:

  1. Estimate initial monthly betting volume. This number is the total aggregate value, in USD, of all wagers to be made on the betting dApp for the first month. In this example, say the operator believes he will have $1,000,000 in total bets his first month.

Of course this is a very simplified example, and in reality monthly betting volume fluctuates, and we have algorithms to calculate and recalculate what the BEPRO MOL is for each operator based on moving averages and price feeds. But it conveys the overall idea. We will also have API integrations with DEXs and other liquidity providers to top up automatically or from a mobile device, when needed.

BEPRO Tokens Preventing Wash Trading

Probably one of the biggest problems in online gambling in the blockchain space is a practice known as “wash trading” or “wash bets”, whereby an operator fakes betting volume by playing its own casino games.

Why would they do this? Simple, it makes them look more popular than they actually are. No one wants to play in a physical casino if the place is a ghost town, and it’s the same online. Volume brings credibility, and encourages people to play. The problem with wash trading is that it fakes volume in hopes of bringing real players with real volume. So how does BEPRO solve that?

Make Operators pay BEPRO for each bet. The bigger the wager, the bigger the BEPRO amount due.

The solution is not to prohibit wash trading — that would be impossible.

The solution is to make wash trading expensive by associating a real cost to it, which scales with the amount of volume.

Currently wash trading is cheap, you just pay the network gas costs on Ethereum or whatever chain you are using for those transactions. Since the tx fee on Ethereum doesn’t go up with the amount of ETH you are sending, wash trading a single 5 ETH bet costs about the same as wash trading a single, ten-thousand ETH bet.

In our system, the first bet of 5 ETH would incur a 0.025 ETH worth of BEPRO fee, and the second bet of 10,000 ETH would incur a 50 ETH worth of BEPRO fee for the operator. Big difference! Operators would happily pay either fee if those bets were legitimate, but in a wash trading scenario, it is a big deterrent.

BEPRO Tokens as Liquidity-of-Last-Resort

In short, BEPRO balances are deducted to pay for betting volume fees, and also act as Liquidity-of-Last-Resort. The paying for betting fees part is pretty straightforward, and has already been addressed. But using staked BEPRO as collateral in an emergency is also a key use case.

Operators always need to maintain an over-collateralisation of wagering funds in their gambling dApps to cover all their outstanding bets, and then some. The reason for over-collateralisation is clear: gambling dApps using an unstable currency like ETH for wagering need to have a large enough liquidity pool of ETH to cover the USD value of all outstanding ETH bets AND to cover a wild swing in ETH/USD market. (it’s Crypto, after all!).

The Operator’s BEPRO stake serves as even a liquidity pool of last resort to protect players in the case that the operator’s reserve is still insufficient to payout all winning bets. The operator’s BEPRO stake will then get liquidated for whatever the wagering currency is in the given dApp, then used to make payouts to winners. We do this to ensure that the player is never left holding the bag if an operator goes bust.

Oracles: Accurate Reporting

(Future Roadmap when Sports betting goes live.)

In the case of sports books, Esports, and prediction market betting dApps, these operators will need to pay a percentage of their revenue in BEPRO to Oracles.

  • BEPRO incentivises proper reporting of event outcomes and punishing improper reporting through BEPRO Oracle Masternode staking.

Example: Chelsea vs. Manchester United

Operator ‘O’ has a BetProtocol sports betting dApp. He publishes a market on the outcome of the Chelsea vs. Manchester United football match. Operator ‘O’ takes bets on who thinks Chelsea will win, who thinks Manchester will win, who thinks a draw, and a host of other betting options like over-unders, etc. The bets are placed and everyone goes to watch the game…and it’s a draw nil-nil!

Everyone who saw the game knows the outcome, but who gets to set that outcome for the purposes of settling the bets?

Oracles.

To become a BetProtocol oracle, you first need to stake BEPRO tokens. In this example, Oracle ‘A’ who correctly reported a draw nil-nil will be rewarded with a revenue share of BEPRO tokens from Operator ‘O’ who used his oracle service. Oracle ‘B’ who incorrectly reported Manchester winning 5–3 will have his BEPRO stake redistributed to Oracle ‘A’, and his BEPRO revenue share from Operator ‘O’ refunded.

Players: Governance, Developer Marketplace & Premium Features

(Future Roadmap when Sports betting goes live.)

  • Pay for Premium Services in dApps in BEPRO

Part 4: The BEPRO Token Economy

  • Operations are funded in part by BEPRO earned as gas from Operators

About BetProtocol

BetProtocol enables entrepreneurs and developers to create gaming platforms in minutes. No coding required. Thanks to BetProtocol’s blockchain technology, these platforms are secure, scalable and regulatory compliant. Its vision is to enable anyone in the world to dream of being a gaming platform owner one morning, and actually be one that same day.

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