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One of the biggest industries in the world is gambling, which is worth over $270 billion. The online betting industry generates more than $60 billion, as gamblers interact via a variety of online platforms.
The adoption of emerging technologies is one of the most important factors driving growth in this sector. Even though crypto seemed like a joke at first, gamblers didn’t hesitate to try out cryptocurrency.
While traditional investors still believed crypto was going nowhere, bitcoin casinos like Cloudbet began operating in 2013 when traditional investors were still skeptical that it would succeed. DeFi is just coming in, and it has already had a huge impact. However, this is still just the beginning of its impact.
DeFi gambling has received rapid acceptance among bettors, and this is just the beginning. In contrast, developers are doing everything in their power to provide unique products with a natural solution for the gambler. Read on to learn more about this topic.Latest update 7 December 2022
A lack of education regarding DeFi as well as the cryptocurrency sector in general is still an issue for the masses. Developers focus only on coding and do not put much effort into educating ordinary investors about their products.
Its primary goal is to make financial services accessible to everyone so that no one is limited by their circumstances. Bank accounts are a key component of it since it even seeks to replace traditional banking services. Users own DeFi accounts, which serve all of the same functions as conventional bank accounts.
The difference is that DeFi accounts can be opened in minutes and anonymously. They are also non-regulated, meaning the user has 100% control over their funds. As with traditional banking, DeFi users can save, invest, and take out loans.
A DeFi system is decentralized, fast, and more efficient as compared to a centralized system.
Using blockchain-based applications (dApps), such as Compound and DAO, lenders and borrowers can connect with one another. This means that anyone can lend money and earn interest on it. The products available are way superior to standard savings accounts when it comes to saving.
Due to the fact that no third parties and monopolies are able to exploit the savings of DeFi users, they earn a lot of interest on their savings accounts. As casinos have bank accounts, gambling utilizes DeFi as well. Therefore, gambling is DeFi’s main advantage.
Although there are many unique gaming and gambling products that are being developed by DeFi, they still represent a very small percentage of the overall decentralized finance industry as a whole.
A number of governments, including those in China, have prohibited banks from dealing with crypto. Crypto gamblers have been particularly adversely disadvantaged. With DeFi, crypto gamblers are free to transact any amount of money without any limitations. A new level of fairness has been introduced by DeFi when it comes to betting. It is run on a blockchain and is not influenced by third parties.
DeFi brings a trustless gambling ecosystem based on blockchain technology, which creates a sterile gambling environment with limited fraud and gameplay manipulation risks, all from a single source of data. Let’s not forget the volatility risk that cryptocurrency gamblers face.
The digital coin market is very volatile. It is very common for players to lose a large amount of money whenever their portfolios tank. As a result of DeFi, they can hold their funds in liquid or staking pools and earn interest that can cover losses if prices plummet. Alternatively, they gain even greater profits if the prices remain stable. Players can also exchange their funds between cryptocurrencies at very minimal fees by holding their funds in stablecoins, such as USDT, and swapping them instantly.
There is no doubt that anyone who has interacted with products like Augur will agree that innovation is perhaps the most rewarding aspect of DeFi to crypto gamblers. Augur promises to lead users into a risk-free future of gambling. Imagine a wagering platform that refunds a stake when a wager does not pay out.
The introduction of blockchain into gambling is a sure bet for transparency. This will make it easier for the betting industry to become safe and trustworthy. Decentralization dethrones greedy operators by introducing fair profit sharing for all.
However, the biggest impact DeFi will have on gambling will be the improvement of user experience and the introduction of new innovations. It is a constant evolution of DeFi, and programmers are finding new ways to integrate additional benefits for players so they can maximize their earnings.
DeFi’s Chipz platform uses Ethereum technology to give bettors a unique gambling experience based on blockchain technology. It is another innovative product built by DeFi that utilizes blockchain technology.
It offers them a one-stop platform for them to bet on any random occurrence, including sports, politics, and entertainment. Users can become bookmakers, by creating their own sports, and allowing bettors to participate and earn staking fees.
These are all possible because of the power of smart contracts, and none of these are governed by third parties or regulated by regulatory authorities.
As has already been mentioned, DeFi is a very wide platform for gambling. It includes different types of gambling, including crypto casinos, sports betting, poker, and even some new and unique gambling products like yield farms.
It is possible for players to share in the casino’s profits with DeFi slots. Gamblers purchase NFTs representing ownership, and these grant them automatic rights to receive passive income whenever the casino distributes profits to players.
The funds can be reinvested, staked, or channeled into liquidity pools so that players can make even more money by reinvesting these profits or staking them.
After experiencing DeFi gambling dApps, you will never go back to classic poker. The former has always been tagged with a large house edge and unattractive return to player rates. The benefit of decentralized poker is that it takes away the power from the house by distributing profits fairly among the players.
In platforms such as Coinpoker, players are given a 15% profit share directly and additional amounts are distributed through bonuses and promotions. As a result of this kind of gambling, there is also a greater degree of transparency and privacy.
As a result of blockchain technology, DeFi sports betting eliminates third-party bookmakers and uses intelligent contracts to validate results and pay winners automatically. Bettors can lock in their wagers, and the smart contracts will validate and pay the winner automatically.
Upon placing bets, players are required to fund their accounts with a Web3 wallet. Winnings will automatically return to the gambler’s Web3 wallet when they win.
In DeFi, yield farming is a way to maximize crypto gains. There are two types of yield farming: stable yield farming and degen yield farming. Stable yield farming is more of an investment with calculated risks and low returns.
A degen yield farming project, on the other hand, is essentially a zero-sum game in which you either win big or you lose your funds. The projects begin as hyped-up projects paying investors as much as 3% per hour and end up drawing huge amounts of capital.
Normally, investors invest in the native token of the platform, which rapidly increases in value over time. Early investors can make 100x their investment within days and weeks and then start selling their tokens in order to cash in their profits.
In the end, this causes prices to stop moving upward, and a panic wave hits the later investors, causing them to sell all of their tokens, and eventually, the price drops to almost nothing. It is believed that this type of product is similar to a rising hot air balloon, hence the name.
The risk of them bursting at a high altitude is high. Degen products rarely have a real project backing them. They feed off the hype and function as pump-and-dump projects. This is the riskiest form of DeFi crypto gambling.
There is no question that DeFi gambling will continue to grow. The crypto community seems to be strongly supporting it due to the numerous advantages it offers. Risk-free gambling with zero losers, lower betting fees, staking, and yield farming are just a few of the benefits of DeFi gambling.
On the other hand, the lack of regulation leaves room for uncontrolled hype. As a result, risky investments such as degen farms have risen. It is undeniable that DeFi is an exciting technology.
A general rule of thumb for DeFi gambling is to only direct a portion of your risk capital toward it, just like it is with traditional gambling.