In the world of sports betting, instant payouts and reliable retention are the key to the user experience. HotStreak, a web3 platform for daily fantasy sports competitions, claims that the decentralized nature of the blockchain makes it an ideal solution for DFS platforms.
Sports Betting Market
The sports betting Sunday in the U.S. has grown rapidly as states have begun to loosen regulations on the industry. According to Morning Consult, the betting market doubled in 2021, with a total of over $52.7 billion wagered during the year.
Difficulties Experienced by Users
There are some problems with major sports betting platforms like FanDuel. One of them is that, as a player, it is extraordinarily painful to take and give your money, because payouts depend on outdated payment systems, such as ACH transfer, which require the user to trust the counterparty on whom they are betting. In this regard, users are struggling with the difficulties arising from the slow-moving centralized pay systems. These situations cause a great inefficiency to carry out the work.
What HotStreak Offers
Instead of relying on counterparties to initiate payments, HotStreak’s decentralized SHARP protocol facilitates near-instant payments and handles custody of assets according to a set of predetermined rules in the protocol itself. According to the company’s website on the platform for payments, the payment period is 10 seconds.
If a user wants to bet or participate in a DFS competition, the goal is to build something that can really change the industry and change the way people interact with sports games in general. Because the idea that the user must give his money to a central person to keep it is now being destroyed.
HotStreak raised about $1.5 million for its seed round in May last year, largely from angel investors, who CEO Dean said were “giant crypto enthusiasts”. September October 2022, the company announced that it has raised an additional $9 million in funding for the Series A round led by VC company Polychain Capital, a new investor in HotStreak.
CEO Dean said the product has improved significantly since the seed round. The HotStreak team plans to use the new fund to further develop its own platform and the underlying protocol it is working on. CEO Dean said this summer that between $3 and $5 million worth of transactions occur monthly on his companies’ platform and that they are now making a profit, but he did not share specific figures on revenue or profitability.
Nigel Eccles, co-founder and CEO of FanDuel, who has invested in and advised numerous sports betting businesses, is joining the startup as chairman of the board as part of Series A, and this could help the company stay committed to opportunities to work with other companies in this area.
A Method Of Making Money Hotstreak
HotStreak itself plans to make money by selling its software to other spo betting platforms, just as it makes money from the entry fees it receives from players for using its platform, which it says is listed in the app at the beginning of each game.
Dean and his team are not the only founders who recognize a place for blockchain-based innovations in the field of sports betting. Last month, BetDEX, a startup co-founded by former FanDuel executives including Eccles, launched its own Solana-based sports betting protocol with $21 million in funding it raised from Paradigm and FTX last year. BetDEX is more focused on reducing fees in the area, while HotStreak is focusing on improving pay and retention processes.
As a result, we can say that focusing on DFS to start with gives HotStreak a legal advantage, but the platform will probably start offering more traditional sports betting products that require more demanding and costly legal transactions.