Rollbit The Ultimate Exploitation of Blockchain Gambling – An In-depth Look at GambleFi’s Top-notch Platform

Rollbit Unleashing the Full Potential of Blockchain Gambling - A Comprehensive Review of GambleFi's Cutting-edge Platform

If their reported income and futures quantity data are true, then this is a great project. Without a way to verify this, investing in Rollbit is no different than gambling.

Original Title: Rollbit: A Gamble on GambleFi

Original Author: Kunal

Original Source: Medium

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Translated by: Lynn

This week, I will focus on another hot area, the tokens of GambleFi. GambleFi combines the excitement of gambling with the security and transparency of blockchain technology. Essentially, traditional casino games and sports betting are introduced on the chain to make online gambling more verifiable and transparent. The harsh reality is that habits like gambling are always popular, whether it’s a bull or bear market.

The biggest platform in this field is Rollbit. Rollbit is a cryptocurrency casino that claims to have 1 million registered users. They also claim that the daily betting volume is estimated at 40 million, with a total betting volume exceeding 5 billion. Rollbit was launched in 2020 and has since introduced various new features. Since June 2023, their native token RLB has risen by 530%.

Revenue details for Rollbit in the past 30 days

1. Price trend and catalyst since the beginning of the year

As shown in the graph, two key growth drivers are the migration to Ethereum and the introduction of the buyback and burn feature.

Catalysts for 2023

2. Product Supply: Online Casino

Rollbit’s first product is their in-house casino games, which currently account for about 70% of their total revenue. They offer all the games you would see in a typical casino, such as slots, blackjack, baccarat, and more. They have a total of 4621 games on their platform. Well-known live casino game B2B providers like Evolution Gaming and Pragmatic Play are supporting many of the games on Rollbit.

Rollbit makes money when the house wins, and as we know, in the long run, the house always wins. In addition, Rollbit also charges a commission, taking a 3-5% commission on each bet.

Their whitepaper mentions that they have obtained full licensing and authorization from the government of Curacao. However, the license holder is not authorized to offer services in any other jurisdiction where online gambling is deemed illegal or blacklisted by the government of Curacao, France, the Netherlands, Australia, the United Kingdom, Spain, or the central government of Curacao.

Technically speaking, the market size of Rollbit is quite limited. So how can they achieve the numbers reported? In terms of background, Rollbit comes from the online casino and sports betting industry, with an annual revenue that is close to one-third of 888 Holdings. 888 Holdings is an international sports betting company with multiple brands and is listed on the London Stock Exchange.

3. Product Offering: Leveraged Cryptocurrency Trading

Users can trade futures of over 20 top cryptocurrencies with no bid-ask spread and leverage of up to 1000x. Under the fixed fee option, they charge a fee of 0.04% for entry and exit of trades. Under the PnL option, if a user’s trades are profitable, they can take a commission of 5%. Rollbit claims to offer instant trade executions with zero slippage. They also claim to have a trading volume exceeding 100 billion.

An advanced comparison of 24-hour trading volume data for major CEX and Perps shows Rollbit’s position. I find it hard to believe that Rollbit can surpass mature crypto derivative platforms like GMX, DyDx, and Synthetic. Rollbit’s future trading volume even exceeds that of leading CEX Coinbase for spot trading.

Rollbit is likely the counterparty in futures trading, which means they incur losses when traders win and vice versa. Using GLP as their agent, the revenue generated by their futures platform seems unbelievably good.

In their whitepaper, there is no information about the clearing mechanism, how zero slippage is achieved, and how there is no bid-ask spread. Providing leverage of 1000x at such low costs seems unbelievably good.

4. Product Offering: Sports Betting

Sports betting accounts for about 11% of Rollbit’s total revenue. Similar to the casino, they charge a fee of 3-5% for each bet. Rollbit even supports betting on all major sports events, from football to ping pong. SSC Napoli is even their official European betting partner.

5. Buyback and Burn

30% of futures trading revenue, 20% of sports betting revenue, and 10% of casino revenue will be used to buy back RLB every hour. Of the bought-back RLB, 10% will be allocated to Rollbots (Rollbit’s flagship NFT release), and the remaining 90% will be burned.

I plotted the cumulative RLB burned daily, and the chart is almost perfectly linear, indicating consistent daily revenue. The R-squared value of the regression equation generated is 99.4%, suggesting that approximately 1.3 million RLB tokens are burned daily.

Chart showing RLB burn after the buyback and burn mechanism goes live.

The forecast for NTM indicates that an additional 10% of the total supply will be burned. The linear increase in RLB destruction seems almost too good to be true. How can daily earnings not have ups and downs? One explanation could be that on bad days, past reserves are used to maintain burn, which is also supported by their whitepaper.

Calculating the numbers for NTM based on the generated regression equation

6. Uses of RLB Tokens

Every Rollbit user is eligible for a base rebate level of 5%. Players can increase their rebate up to an additional 10%, depending on the amount of RLB they hold. Rebate is a percentage of the betting costs returned to the wagering user.

In addition, the higher the amount of RLB held, the greater the discount on 0.04% futures trading fees. Paying the fee with RLB will further reduce the amount paid.

7. Token Economics

Currently, approximately 68% of the circulating supply is in the Rollbot deployer contract. RLB in this Rollbot deployer contract gets transferred to Rollbit’s ERC-20 hot wallet. Analysis of large transactions on the hot wallet reveals that most RLB is being used to provide liquidity for Uniswap.

In just 3 months, the Rollbot deployer contract has released 12.5% of the total supply of RLB. Considering the RLB in the deployer contract as circulating supply would be unfair, as the amount released from the contract adds inflationary pressure.

8. Risks

Overall lack of transparency, inability to verify income and futures trading volume data. The token itself has traded only 0.63% of its market cap in the past 24 hours. No code audits have been conducted since its launch. No information provided about future roadmaps. Their whitepaper seems outdated and the lack of detailed information is a major red flag for me. Too many aspects of Rollbit seem too good to be true, and it appears to be a bubble waiting to burst.

9. Conclusion

I do like the idea of GambleFi and bringing gambling onto the blockchain. The potential market for gambling is huge, and I do see this vertical space evolving. However, I just don’t believe in Rollbit. Unless you consider token fluctuations in the hot wallet, the RLB token itself can only be seen as deflationary. If their reported income and futures volume data is accurate, then it’s a great project. But investing in Rollbit without a way to verify this is nothing more than gambling on their part.

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