Lunabets: The future of decentralised bookmakers
To begin with, it is critical to comprehend what decentralisation involves to understand the distinction between a standard sportsbook and a decentralised one like LunaFi. Peer-to-Pool transactions are decentralised when they happen without the intervention of a third party. In light of this, the protocol cannot be controlled by a single entity.
In the case of LunaFi, the ecosystem is governed by an open DAO consisting of community stakeholders, industry experts, and partners. $vLFI is the token that enables token holders to participate in the protocol's governance. The DAO is mainly responsible for making choices on the allocation of revenue to the treasury; going forward; it will play a more significant part in determining the margin applied to potential winnings. This concept is distinct from conventional sports bookies, centralised businesses governed by a board of directors. With a monopoly on the market, decision-makers in traditional bookies lack the incentives to act in the interest of their users, which can often lead to profit-motivated unfair practices. With users at the forefront of decision-making, malpractices like these cannot occur on decentralised betting protocols like LunaFi.
"The House Always Wins"
The most novel concept that comes with decentralised bookies is the idea of contributing to the "House Pool." Traditionally when a bettor places a wager, they are betting against the bookie who provides enough liquidity to payout if the call is good. In doing so, the bookie seizes all the profits that can be made from bad calls.
Rather than forfeiting these revenues to centralised companies, decentralised bookies like LunaFi, on the other hand, turn the house into a House Pool where any user can contribute liquidity. In return, LPs are rewarded with a share of the profits from the House Pools and earn additional yield in $LFI rewards.
In the worst-case scenario, conventional bookmakers frequently encounter liquidity problems and react by limiting withdrawals, which is unfair to consumers who have won the bets. However, safeguarding mechanisms on LunaFi ensure that there is always ample liquidity in the pool's smart contract to payout in all scenarios. This is achieved by ensuring that LPs are discouraged from withdrawing from the House Pool, and new LPs are incentivised to take on added risks.
Revenue Source For Users
Traditional and decentralised bookmakers have different user revenue streams. Clients of decentralised betting applications are compensated far more. Rather than clients only profiting from winning wagers, in the LunaFi ecosystem, $LFI is distributed to incentivise participation in betting for the provision of liquidity and governance rewards.
LunaFi User Income streams
- Staking - Earn $LFI for governance/security participation
- Providing liquidity - $LFI rewards to LPs
- Bet mining rewards - $LFI bonuses for reaching certain betting milestones
- Bet Winnings - $LFI awards for winning bets
Traditional Betting User income streams
- Bet Winnings - Revenue from winning a bet.