How to use Smart Contracts for eSports App?

Trying to find ways to use smart contracts to improve your esports app? 

This is a great market that will pay off big time for those that get it right.

Challenges plaguing esports that Blockchain can help tackle

eSports streaming platforms like Twitch, and esports management platforms like Esport-Management have played a central part in global eSports growth. However, a number of challenges plague this industry segment:

• Overall industry revenue for esports events is large, and it‘s growing significantly. However, players get only a small part of this revenue.
• Esports lack a legitimate and self-sustaining ecosystem, which is a challenge for professional gamers and sponsors.
• Players look for fame as well as earnings from esports, however, most viewers don‘t get enough information about players. Viewers need to follow players on platforms like Twitch or YouTube in order to get their esports news. Read “The undeniable truth of blockchain technology in eSports” for more information on this.
• Service providers don’t receive fair rewards since the esports segment lacks the necessary transparent systems.
• Lack of transparency also results in match-fixing, sometimes even in popular games.
• Any industry needs to demonstrate that it operates fairly, otherwise, investors won’t invest. As a result of the lack of transparency, the video gaming industry runs this risk. Consequently, a uniform portal enabling secure participation and transparency is imperative.
• esports needs more content to support its growth, however, the current ecosystem doesn’t sufficiently facilitate content producers to monetize their content.
• Intrusive ads during live streams put off viewers, and many streamers use ad-blockers. This creates challenges for esports marketers.

I have explained these challenges in “10 ways blockchain will revolutionize the esports industry”.

Can blockchain and smart contracts help?

Players drawing only a small part of the revenue, the lack of transparency, and the absence of a uniform portal are the key challenges facing esports. By its very nature, blockchain technology can address these. Blockchain works as follows:

• It’s a “Peer-to-Peer” (P2P) network where every “node”, i.e., a computer on the network can interact with each other.
• No central server administers this network, therefore, every node has the same authority.
• Each node has the entire transaction history on the network, which makes each node a complete ledger. Blockchain derives the name “Distributed Ledger Technology” (DLT) from this feature.
• This design enables disintermediated transactions.
• This also makes the network permanent, since no one can shut the network down by disrupting a single server.
• Blockchain also uses digital signatures, data encryption, cryptographic hash functions, and consensus algorithms to protect data from tampering.

Read more about blockchain in “Top healthcare blockchain business ideas”.

Starting with Ethereum, later generations of blockchain also offer smart contracts. These have the following characteristics:

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• Smart contracts are open-source, therefore, they are transparent.
• These are tamper-proof pieces of code that execute automatically.
• Their execution can‘t be reversed, therefore, they can help in contract administration.
• Smart contracts transfer cryptographic assets from one account to another, based on predefined conditions.

Read more about smart contracts in “How to deploy a smart contract on Ethereum?”.

As you can see, blockchain and smart contracts can address the lack of transparency in the esports industry. They can also increase the chances of talented players and service providers accessing a greater share of the revenue.

Employing smart contracts to improve an esports app

Let‘s consider a few use cases to illustrate the impact of smart contracts on an eSports app, as follows:

1. Using smart contracts to transparently manage the prize pool

esports have so much potential, however, the number of professional players is low. A report puts the number of amateur and semi-professional players at 16,000 per 1 professional player. Read “Smart contracts to increase esport tournaments reliability” to learn more about this.

Amateurs will only want to become professionals if they see a viable revenue stream, however, the opaque management of esports prizes doesn’t help this. Smart contracts can make a difference here, as follows:

• Based on predefined rules, smart contracts will distribute the money in the prize pool automatically between winners.
• Even within an esports team, smart contracts will distribute the prize money based on predefined conditions.
• Smart contracts are open-source pieces of code. Everyone can view them, therefore, the contractual terms and conditions are open to all. No one can tamper with smart contracts after deploying them, further improving the trust.

Read more about these characteristics of smart contracts in “Smart contract transparency in the decentralized world”.

2. Employing smart contracts to give greater control to players

Esports like many traditional sports are plagued by match-fixing, and reports indicate that this is a widespread issue. Team managers exercise a lot of power, and they force players in game to throw matches. This helps team managers to manipulate betting odds. Smart contracts, when used in an esports app, can reduce this, as follows:

• Blockchain and smart contracts can lower the cost of setting up esports tournaments.
• This reduces the dependency of players on team managers.
• Away from the interference from esports organizers with deep pockets, players can set up their tournaments and leagues.
• As I have explained earlier, players can use blockchain smart contracts to manage the prize pools.
• This autonomy can significantly help players to stick to fair play.

Yamzu is one blockchain project working on this use case. Read about how Yamzu uses smart contracts to improve the autonomy of esports players in “Blockchain and its potential for eSports”.

3. Utilizing smart contracts to make esports platforms robust

We will now look at using smart contracts to make esports platforms more robust. As I have already explained, the lack of a robust uniform portal makes participation and investment in esports difficult. Smart contracts in an esports app can resolve this, as follows:

• With their transparent nature, smart contracts will make the rules of the platform and games visible to everyone concerned.
• Just as smart contracts help in managing prize pools and avoiding unethical interference from team managers, they also provide a transparent platform to sponsors.
• Since smart contracts execute autonomously, industry stakeholders can feel assured that their money is spent exactly how they had intended.
• Service providers can use this smart contract-based platform to get rewarded fairly for their work.
• Fans can use smart contracts along with cryptocurrencies to support their favorite players on a transparent platform.
• Game developers can use a smart contract platform to quickly launch their esports games and reach a wider audience, even if they started with a low investment.

You can study “eByte eSports Blockchain”, a project using smart contracts to offer a decentralized esports app platform. The platform works as follows:

• It uses a consortium blockchain and has its own cryptocurrency.
• This platform is open to developers for esports gaming app development, just as developers use the Ethereum platform to develop “decentralized apps” (DApps).
• eByte has an elaborate system of smart contracts. eSports teams, players, tournament organizers, team managers, etc. can use these smart contracts to transparently manage tournaments, reward players, etc.
• Fans can support their favorite players and teams using the eByte platform, where they can donate using cryptocurrencies.

Read more about the eByte solution here.

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4. Streamline the esports donation process with smart contracts

As I also touched on earlier, unlike traditional sports, esports players don‘t have an assured revenue stream. This is due to many reasons, e.g., malpractices on the part of tournament organizers, high entry barrier, etc. However, fans can donate to esports players and support their journey, which is a good practice.

Unfortunately, this doesn‘t work well, due to the following reasons:

• The donation process is not transparent.
• Fans can donate, and then after some time demand the entire donation back.
• The player has no option but to return all of the money.
• This happens often. Fans often state that the donation was without their knowledge when asking for the return of the money. eSports players have no way to challenge this.

Using smart contracts can drastically change this process, as follows:

• Smart contracts have the rules coded in there in a transparent manner. The donation transaction will be recorded in a transparent manner. Fans will not be able to claim later that the donation transaction went without their knowledge.
• Smart contracts transfer crypto tokens, and the transaction is irreversible. Money once donated can‘t be taken back. This further helps in creating greater transactional security.

Read more about this use case in “4 ways blockchain is going to revolutionize esports”.

5. Improve in-app purchases with smart contracts

Esports apps need to offer in-app purchases. There are several complexities involved here:

• These apps serve a wide range of stakeholders, therefore, the purchase transactions are of various kinds.
• For e.g., there could be in-app purchases of common merchandise. On the other hand, some esports might involve in-game assets, and players or team managers might need to buy them.
• Esports has a global following, therefore, these in-app purchases occur from various geographical regions. This requires dependence on payment gateways operating at a global level, and these transactions could be slow.

With blockchain and smart contracts, the scenario could change significantly. You can improve the in-app purchase functionality in your esports app with smart contracts as follows:

• Using cryptographic tokens will expedite the transaction. Your users will no longer depend on payment gateways and their inefficient processes. You can code smart contracts to completely govern the in-app purchase transaction.
• For common merchandise, you can use the ERC20 token standard if you are developing your app using the Ethereum network. ERC20 is a popular standard, and most crypto wallets use it. Read “ERC20 token standard” to learn more about it.
• If the in-app purchase refers to unique in-game items, then you can code those crypto tokens using the ERC721 standard. This helps you create non-fungible tokens, i.e., each token is different from the other. You can read “Noobs guide to understanding ERC-20 vs ERC-721 tokens” to learn more about this standard.

Read “How to create a secure in esports app purchase/payment system using blockchain” to learn how smart contracts can aid in eSports app in-app purchases.

Planning to improve your esports app using smart contracts?

According to Verified Market Research, “the esports Market was valued at USD 915.30 million in 2018 and is expected to reach a value of USD 2,976.74 million by 2026 at a CAGR of 18.35%”.

Smart contracts have significant potential to improve and revolutionize eSports apps, however, such projects tend to be complex. Changing smart contracts after deploying them is impossible, therefore, comprehensive testing is the key.

You need to plan extremely thoroughly for such projects, and I have explained this planning process in “What to plan for when undertaking blockchain software development?”.

If you don’t have all the relevant expertise then consider getting professional help from reputed software development companies. Read “How to find the best software development company?” before you engage a development partner.

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DevTeam.Space can help you with their experienced blockchain developers community. Write to us your initial smart contracts for eSports app requirements via this quick form and one of our technical managers will get back to you for further assistance.

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