SBC SUMMIT NORTH AMERICA May 7-9, 2024
BetDEX:
a single liquidity pool for sports betting
A singular liquidity pool for sports betting. Fee compression forcing operators to compete on product experience. Funds
always transparent and publicly available. Ahead of speaking at SBC Summit North America, Varun Sudhakar, CEO &
Co-Founder of BetDEX, discusses the technical capabilities of blockchain for sports betting.
Take us back to the formation of BetDEX. When, how and why did the idea germinate?
Te initial spark for BetDEX actually started a few years ago while I was still at FanDuel and saw how massive the market was even though it was rife with poor user experiences. Upwards of 10 per cent fees, counterparty risk (i.e. operators disappearing with your money), and discriminatory practices (i.e. charging extra fees to winners or making it arbitrarily difficult to withdraw your funds if you hit a big win) were not exceptions, but industry norms.
We wanted to create a fair, transparent and even playing field that did not discriminate against smart bettors, and that’s why we started BetDEX.
Where does your interest in blockchain and Web3 stem from?
I was a casual observer and passive participant in the Web3 ecosystem from 2015 onwards, yet my real interest in blockchain arose in 2021.
I had been discussing ideas with my now co- founders about ways to fix the poor user experience in sports betting, but we kept running into the issues of trust and liquidity fragmentation. And we realised that the blockchain can solve these issues.
Te underlying reason why operators can act with such impunity is because of the liquidity fragmentation in sports betting. For example, the price on the Mavericks to win will be different on Ladbrokes, Bet365, Bovada, Shuffle, etc. Te amount you can bet at each operator will vary, the fees will vary, and the ability to withdraw any winnings may differ depending on the operator you choose.
Contrast this with the financial world, a share of Apple costs the same whether you purchase it via Revolut, Robinhood or eToro. Te ‘operator’ in this case doesn’t dictate how many shares you can buy – that’s determined by what’s available on the market.
P144 WIRE / PULSE / INSIGHT / REPORTS
continue to go into Web2 as that is the main cash generation engine for many companies until Web3 becomes more mainstream. You are already starting to see early signs of the latter occurring with venture capital dollars pouring into the Web3 ecosystem, and real and massive web3 businesses such as Coinbase thriving and
Varun Sudhakar CEO & Co-Founder, BetDEX
It’s typically dirt-cheap or even free to buy a share. And you won’t have any difficulties in selling your share or withdrawing any proceeds unless you’re a bad actor and laundering money. Now imagine a world where the sports betting world is similar to the financial world in that there is a singular liquidity pool for sports betting.
Tere will lead to fee compression forcing operators to compete on product experience, and your funds are always transparent and publicly available. Tat’s what the blockchain enables.
Whilst companies are putting increasingly more effort into blockchain and Web3, why is most marketing and development time going into Web2?
Web3 is an exciting industry but it is still in its infancy. Marketing and development will
BetDEX’s decentralised sportsbook model is unique to the betting industry. But are there similar or comparable models in other tech industries?
Certainly, two other businesses immediately come to mind, both also incidentally built on the Solana blockchain!
Helium: Building a decentralised network for cell phones towers, live in the U.S. Recently launched international roaming this week.
Hivemapper: Building a decentralised global map, a competitor to Google Maps. Tey have already mapped over 15 per cent of the roads in the world.
What are the limitations of centralised platforms, and how does BetDEX address these?
Ability and willingness to arbitrarily discriminate against users: As we are built on an open-sourced protocol which anyone can access, we cannot discriminate against our players. If we did, users would just access the protocol via another operator or even directly.
The underlying reason why operators can act with such impunity is because of the liquidity fragmentation in sports
betting. For example, the price on the Mavericks to win will be different on Ladbrokes, Bet365, Bovada, Shuffle, etc. The
amount you can bet at each operator will vary, the fees will vary, and the ability to withdraw any winnings may differ depending on the operator you choose.
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