Since successfully fundraising in 2017, Wagerr has quickly emerged as the world’s leading decentralized sportsbook. We caught up with Wagerr CEO David Mah, to recap the project’s progress so far, and what is coming next.
For readers who aren’t familiar with Wagerr, could you give a thumbnail sketch?
Sure, Wagerr is a low-fee, participant-owned sports betting application. It pays cryptocurrency rewards to users who secure network transactions and authenticate the real-world events that trigger execution of rigid smart contracts. Wagerr (ticker symbol: WGR) is a decentralized cryptocurrency with privacy features that make it universally accessible and censorship-resistant. It’s self-regulating meaning users decide how to use their own assets, not governments.
David, could you tell us a little about your story as the founder of Wagerr
Before I came to cryptocurrency, I practiced as an ER physician. For years, in my free time I worked on a number of crypto projects. That’s where I learned a ton about blockchain technology.
Then in 2016, I realized that sports betting is the perfect use case for cryptocurrency. There’s an ideal match between the power of the technology and the needs of the user community.
Wagerr taps into the aspect of crypto that I think has the most potential: the ability to design and grow an open ecosystem through smart incentives. With Wagerr, we’ve built a network that lets us design the monetary policy and craft incentives that shape its economy. Because the network is decentralized, Wagerr gives users new choices, better options, and a new degree of freedom.
Since the beginning of Wagerr, I’ve made this project my full-time career. I feel very fortunate to be able to have something I’m so passionate about at the center of my life.
What aspect of Wagerr are you most proud of so far?
The community. Without a doubt: the fact that this application works the way we intended and the network works so well that it sustains a dedicated user community is a great accomplishment. It’s a testament to a sound idea and decent implementation.
We’ve had sort of a “build it and they will come” approach — and the users are here! Sports bettors are using Wagerr. It’s not just the people looking for the price of the WGR coin to “10x” — though, of course, there are some of those folks in any community.
For the most part, these are people who want Wagerr to work. They are excited about its potential and want to be a part of it. Sure, some people are impatient, garrulous, and critical. They’re also experienced and knowledgeable gamers, and they keep us on our toes. Fundamentally, they are partners in a radically disruptive project.
They’re bettors, advocates, developers, ambassadors, and partners. They’re the people who will help reach other established communities and help Wagerr expand. It’s not an us vs. them relationship with the community because they understand that this project is different. It’s not a traditional company or a couple of individuals. Wagerr is not “the man.” It’s way bigger than us. I mean it’s almost spiritual, which I realize is a funny thing to say about a gaming community. But we’re loaded with true believers who see something bigger than corporate profits or even personal gain. There’s a real sense of membership. The ability to be part of something amazing, right from the beginning.
Anyhow, to summarize: It works! Wagerr works the way we intended it to. That’s a beautiful thing in itself. The team has delivered an application, a wallet, a cryptocurrency, a global network, a betting platform, a coherent economic model, and now it’s working on expanding the community and building out the ecosystem.
There are a lot of technical, design, and security challenges we had to get right. Security has always been our top priority. The technical dimensions for “betting against the blockchain” were really exciting to work through. And we’re continuously adding new functionality and improving the existing tech.
The design of the user interface is also extremely important to get right, but it’s something that we can afford to fine-tune once the top priorities are satisfied. The good news is that we’re at the point where we’ve made huge strides in user experience design, which is really about making the application intuitive and easy to use.
We’ve had sort of a “build it and they will come” approach — and the users are here!
You mentioned “betting against the chain.” Could you explain that?
Right, so, say you want to place a bet on the Super Bowl using the Wagerr wallet (which integrates a betting app), you can place a bet for up to 10,000 WGR per bet. When you place that bet at the current odds listed in the wallet, you send your funds to the designated address initiating a contract.
All funds sent to that address are permanently destroyed. Then, the network pays out the winning bets automatically. Essentially, it’s the blockchain that pays out the winning bets by generating new coins. And that payout is usually offset, more or less, by the number of coins being destroyed from losing bets on the other side of that event.
It’s a clever mechanism. It’s different from how traditional sportsbooks work (where the company has to pay the winners no matter how many losers there were — out of their own pocket). That means if the betting is really lopsided the company could wind up not being able to cover the winning bets!
That’s one of the reasons traditional sports books skew the odds so they don’t reflect true probabilities, but influence betting behavior. So, they have to adjust the odds to manage their liability risk, while Wagerr can keep true odds.
The other reason the traditional sports books skew the bet is because they need to be able to count on the income. So, they give customers worse odds to make sure they can pocket a decent percentage. Unregulated sportsbooks also notoriously negate bets, deny withdrawals, and close your account if you start winning too much. Customers literally have no recourse.
That’s their business model, and it is what people mean when they say, “The house always wins.” The companies win at their customers’ expense.
Wagerr doesn’t need to manipulate the odds, so the fees are lower and bettors stand to win more on Wagerr than on a traditional sports book when they put the same size bet at risk.
That’s a huge advantage right there. For career sports bettors, it’s a no-brainer. What I’m saying is that Wagerr’s true odds, are actually better than the low fees touted by legacy casinos and sports books because they hide their fees in the odds. Wagerr is not only transparent, it’s less costly to the player.
It’s important to understand that difference because we have a better model. It’s not a moral judgment. They’ve got a captive audience that didn’t have any choice — until now. And they had a business model that worked. It worked so well that most bettors just take the house edge for granted. We want everyone to rethink that.
Wagerr doesn’t need to charge big fees because most of the work is being done by the blockchain protocol, and by the community that maintains network security and authenticates real world data about sporting events. Of course, there’s also development and marketing work. and a tiny portion of the fees (0.12% of every bet) also supports these efforts.
OK, so back to “betting on the blockchain.” You can also contrast it with, say, head-to-head betting, where you and a friend each put $10 down on competing teams. If you do that at home it’s winner take all, but Wagerr is developing a mechanism that escrows the bet and resolves it automatically for a small fee. You don’t even have to know (or trust) the person on the other side of the bet. And you don’t have to live in the same place to settle up.
So, betting against the blockchain means you don’t have to have a direct match with another person. The chain itself can function as the other party.
This gives Wagerr incredible flexibility to create smaller markets and accommodate sports bettors with niche interests. Wagerr can handle cricket or rugby as easily as it can accommodate the Super Bowl or World Cup. The more sports Wagerr includes, the larger the betting community becomes.
The more sports Wagerr includes, the larger the betting community becomes.
Since you mentioned fees, could you also explain how and why fees are “burned.” What’s the theory behind that, and how is it working in practice, so far?
Right. So, Wagerr permanently destroys about half of every fee. Because, after all, who is it that needs the fees? The CEO? The employees? The government? The blockchain doesn’t have any of those expenses! But to keep the network sustainable, Wagerr maintains a system of incentives.
So, when masternode operators earn fees each time a user placed a bet, they are the House. It’s not like William Hill where you’re either an employee or a customer. With Wagerr, anyone can acquire Wagerr and run a masternode. And anyone with WGR can place a bet. The choice is yours within the context of your conscience and the laws and regulations of your jurisdiction. So, the house edge of Wagerr comes, in part, from the fee system.
“Be the house,” was a Wagerr slogan from the start. You can literally be the house in Wagerr by owning WGR and operating a masternode. There’s just nothing like it in the legacy world. Anyone running a masternode earns a portion of the betting fees, so the more WGR is bet, the more node operators stand to gain.
So, the theory is: burning fees means there’s a perpetual deflation mechanism driven by usage. In practice, the deflationary mechanism may be moderated by moments of inflation — when the blockchain has to pay out more on the winning side than was destroyed on the losing side. And it may also be accelerated by moments of deflation when a disproportionate amount of losing bets are placed and destroyed relative to the payout to winners.
Finally, the burn rate interacts with price to maintain dynamic equilibrium. Since most people will bet in fiat values, they’ll be betting more WGR (and burning larger fees) when the market price of WGR is low. And when the price is high, they won’t need to spend as many WGR to make the same size bet. So, when the price is low, the rate of coin destruction accelerates, functioning as a mechanism for price moderation.
Just a quick example. If WGR is trading at $1/WGR, and I want to bet $100, I bet 100 WGR and if I win, then about 3 WGR get burned.
But say the price of WGR is ten cents and I want to bet $100. Now my bet size is 1000 WGR. And if I win the bet, about 30 WGR are burned. Over time those larger burns rebalance the supply-and-demand dynamics, supporting price stability and leading to equilibrium over time.
What are the challenges and opportunities you see for Wagerr in the crypto gambling space?
Adoption. Like I said, we’ve operated on a “build it and they will come” model. As we continue to expand the technical capacity for sports betting, we’ll need to actively engage the broader betting community, including traditional bettors who are new to crypto.
One part of that is education. Many experienced gamers take it for granted that the House always wins, and they’re resigned to getting a bad deal as the price of admission because it’s been a rigged game for so long. Now that Wagerr offers a better option, we believe that once gamers understand how traditional sports books siphon the juice out of bets through hidden fees like by manipulating the odds, the financial advantages of Wagerr will bring more users.
We also need to educate governments and regulators. The practice of Prohibition continues in many regions (and we know from history how well that works out). A self-regulating blockchain eliminates the harms governments seek to block by prohibiting gambling. And it does so without any dependence upon governments and regulation.
Of course, in some cases gambling income is big money for many governments. State lotteries, for instance, are a means of transferring tons of money to the government by offering a huge jackpot. In this case, the state is the House — and the house always wins. Wagerr is in a position to offer a much more attractive risk/reward profile, hands down.
So, given that Wagerr offers better prospects, as well as transparency and provably fair odds, the next challenge after education is to make it really easy to get started. That’s a challenge the entire crypto space is facing. That’s why we’re working on a series of strategic partnerships that will facilitate onboarding by making it easier to get from dollars or euros to Wagerr cryptocurrency and back to government issued currency.
What are your metrics for monitoring Wagerr adoption?
Users have bet 100 million WGR so far. Let me put that in context for you. There’s only about
200 million WGR in existence. That means that nearly half the coin supply has been used for the primary purpose of the Wagerr project.
And that’s only part of the story. Nearly 3000 masternodes are operating, meaning that another 35% of the entire coin supply is being put to use to power the Wagerr blockchain network. So that leaves like 15% of the entire coin supply that hasn’t been put to active use yet. That kind of turnover (or velocity of money) is incredible.
Growing demand with limited supply is a winning formula. Just imagine what happens when there are even more bets being placed and even more WGR locked up in masternodes. There just won’t be that much supply available in the markets.
Readers should check it out for themselves. The Wagerr block explorer offers a graphic display of Wagerr activity with charts showing what’s happening on the network.
What excites you most about Wagerr’s future?
The new Wagerr Electron Wallet! It’s exciting because it creates a much better user experience. I mean, the current wallet works. It’s an adaptation of the clunky old “Qt” crypto wallet that almost every coin has, with a clunky betting app bolted on top. The legacy wallet is functional, but it’s not the ideal user experience.
Based on Electron Framework, the new wallet changes everything. It will really be the modern betting app, and it will include all the wallet functionality users need to manage every aspect of the Wagerr ecosystem, from betting, to sending and receiving funds, to masternode management and blockchain governance through voting.
We have an impressive cadre of community beta testers who are giving it rave reviews. And we’re hearing about wallet envy from other coin projects. We’re leading the way.
We are really kicking ass when it comes to data management. The Wagerr system is data intensive, and there’s no way around that. But we’ve done things with data management that make the app much more responsive and we’re making the blockchain lighter with more efficient encoding of events and bet contracts (a 60-85% reduction!). Before the Electron wallet (or maybe I should just call it the Wagerr App), we were limited in the number of events we could offer (up to 20). The upgrades enable 200+ concurrent events. We’re ready for growth: more events, more sports, more markets.
The Electron Wallet framework not only makes is easier for users to sort by sports and events to see exactly what they want to see; Wagerr users will also be able to enjoy lotteries and table games.
Since we coded it from the ground up, we made sure that the Electron Wallet is highly extensible. That means that as we add new features, we have a framework in place that can easily accommodate new functionality and user experience improvements. We’ll be able to add new features quickly and seamlessly.
The user interface is an important part of onboarding people who are new to crypto. With an app that’s familiar and intuitive, new users will feel right at home.
In a detailed blog post, FunFair discussed at length the challenges to onboard users to dApps.
“We can see plain as day where we lose people in the onboarding funnel, and much of the time it’s very early – at the start – the moment they’re asked to download a Web3 browser or wallet and to create an Ethereum account,” the team said in the post.
“We believe we could reach a lot more users for our dApp if there were far lower friction, no requirement to download or install anything new, and a UI that had a much more comfortable learning curve.”
To tackle the problem, the FunFair has spent almost a year building “an easy to use wallet that targets this significant onboarding friction”.
The result is the FunWallet, which FunFair says will run “in any web browser inside an iFrame, on any device, mobile or desktop, Safari or Chrome” and requires no plugin, download or install. In other words, users will be able to easily log into their FunWallet from their phone with an email and password.