Q&A: BetDEX CEO Varun Sudhakar

Blockchain betting exchange BetDEX came out of beta mode in May. CEO Varun Sudhakar tells Crypto Gambling News how the platform has evolved and where it’s headed next.

What gap in the market was the BetDEX Exchange created to fill?

Sports betting is a massive industry, yet it’s one that provides consistently poor user experiences with high fees (10%+), counterparty risk, restrictions against winning players and more.

The root cause of all these problems is liquidity fragmentation. If you buy a share of Apple, the price is the same on Revolut, eToro or Bank of America. You can easily do a six-figure stock purchase without the price changing.

In contrast, if you look at the price to back Scotland tonight on the Euros, the price will be different across Betfair, Matchbook and Pinnacle, and the amount that you can bet at each operator varies. 

By building a sports betting exchange with a permissionless and open-sourced back end on the blockchain (i.e. the Monaco Protocol), we hope to create an environment where operators can take advantage of pooled liquidity and offer bettors a dramatically better user experience.

The BetDex team hail from FanDuel, Betfair, BetDAQ, and BoyleSports. How did life at those operators inform the creation of this product?

This is a massive industry with incumbents having big brands and massive marketing budgets, yet the actual sports betting experience has grown quite stale with commoditized products.

However, the industry has only seen incremental improvements versus truly disruptive changes in the last decade or so. There is a lot of room for improvements in areas ranging from payments to UI to customer experience.

Payment in particular is a huge source of friction as gambling is considered to be a ‘high-risk’ activity in many jurisdictions.

What are the standout features of BetDex that make it a better experience than a traditional sportsbook?

First, the trading experience. As an exchange you can much more easily trade in and out of betting markets, for example you can ‘day trade’ on the exchange. Our prices are also typically better than even the ‘sharper’ sportsbooks like Pinnacle.

Also, incentive alignment. In an exchange, you are betting against other users, we have no incentive to see you lose. In a sportsbook, you are betting against the company who is on the other side of the bet, so they want to see you lose.

What feedback have you had from the beta launch of the platform? What has changed as a result?

We have expanded market coverage. We launched with just soccer pre-match winner markets, but users wanted a lot more betting options. This wasn’t surprising at all. As the platform has grown, we have expanded our inventory and you can now bet on American football, hockey, soccer, tennis, cricket, baseball and more.

Users wanted a lot more liquidity on the platform since they wanted to place bigger bets. We have onboarded institutional market makers and now key betting markets have between $5,000 and $10,000 of anchor liquidity available at any given moment. This will grow as the platform expands.

Some said, “great idea, but blockchain is too complicated”. Many users we spoke to loved the idea of what we were building, but thought the blockchain aspect was too complicated, specifically asking a user to procure SOL for gas fees or to procure USDC on their own to bet with was a step too far for the mass market.

We have since abstracted away a lot of the blockchain complexity by developing our own wallet solution where users can deposit with whatever they have on hand (debit card, bank account, ETH, BTC, etc) and we will fund the player account with USDC to bet with. This wallet solution also allows BetDEX to cover gas fees on behalf of its users.

Our goal here is to make the deposit, betting, and withdrawal experience similar to – if not better than – what users are used to on platforms like Betfair, while surfacing the benefits of on-chain pooled liquidity in the form of better prices, tighter spreads and liquid betting markets.

What is the ambition for the platform over the next 18 months?

Continue to scale the BetDEX Exchange and successfully acquire users not only from web3, but also web2 who are not used to crypto or blockchain.

Assist other operators and businesses in building their skins on top of the Monaco Protocol to grow the ecosystem.

Where do you see crypto gambling industry heading in the near to medium term?

Crypto gambling is here to stay. Crypto adoption is expanding rapidly across the world, and there are too many benefits that crypto has in terms of payment friction and fund transparency that operators can’t afford to ignore.

There is also the opportunity to truly disrupt the industry by creating a trustless betting ecosystem with pooled liquidity which anyone can participate in on the blockchain, this is much more difficult to do but the rewards are massive.

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Written by Hannah

Hannah is editor of CryptoGamblingNews.com and has almost 15 years experience in journalism, including reporting on law, TV, gambling, crypto and alternative finance. She is particularly interested in the future of money, the transition of gambling from 'vice' industry to mainstream entertainment and the application of blockchain technology to wider society.

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