Esports – also known as electronic sports – is a form of competition using video games that are played online. Most esports games consist of organized, multiplayer video game competitions between amateur, novice and professional players.
Esports is one of the fastest-growing digital markets, with a 33% annual growth rate. Last year, the global esports industry was valued at nearly $500 million. Future projections indicate that revenue for the global esports market will reach $1.65 billion by 2020. And esports will have over 1 billion enthusiasts and viewers by 2023, which will be one-third of all gamers, making it one of the highest-ranking sports of the future.
However, this billion dollar market continues to face challenges that could hamper its growth. Some of the biggest hurdles facing the esports industry include a lack of transparency and structure, which has resulted in fraudulent/non-payments for players. Other issues impacting the industry are a lack of infrastructure needed to support player growth, and the absence of a clear-cut point of entry for those interested in joining or supporting esports.
These issues have become problematic due to the fact that game publishers have the majority of control when it comes to esports, and are above tournament organizers, clubs, players, and regulators such as the World Esports Association. Fans are at the bottom of the barrel. Game publishers also own all of the intellectual property in connection with the games.
Blockchain Technology Gives Power Back
In order to solve esports’ biggest challenges, a blockchain-based startup called DreamTeam has created an infrastructure platform and payment gateway specifically for esports games. DreamTeam uses blockchain technology and smart contracts to achieve three main goals: to provide fair and timely compensation to esports players in the form of digital tokens, to help organize and manage esports teams on a single platform, and to open esports up to advertisers, sponsors and tournament organizers.
“Currently, there are no standardized contracts for players and no open transfer policies in place within the esports realm. DreamTeam is attempting to solve these issues using the power of blockchain technology. DreamTeam will give its users a simple all-in-one solution that will solve all of the above problems single-handedly and provide smart contract templates for any type of agreement in order to address them,” says Alexander Kokhanovskyy, DreamTeam’s CEO and founder.
Through the application of blockchain technology, DreamTeam has created a payment ecosystem that is free from the risks of fraud and non-payment. Last month, DreamTeam announced the launch of its Blockchain User Wallets & Compensation Smart Contracts, becoming the first platform to enable teams to provide compensation to their players, in a test mode. The use of smart contracts on the test Ethereum blockchain allows esports enthusiasts to check out the platform’s capabilities before the launch of a real-value network. It also ensures that player salaries and funds are distributed fairly and are held in escrow, allowing verification of funds before any agreement is made. Tournament winnings can also be verified ahead of time through this same process, which prevents the common situation of tournament organizers failing to pay the winning teams.
This process also encourages credibility within the entire esports industry, as players, coaches, teams and tournaments will all be held to a high standard of trust through verified transactions. Abuse of the system will be nearly impossible, and those who try will have a track record, as the information can always be traced and verified across the blockchain.
Another key aspect of DreamTeam is its ability to manage all elements of an esports team on a single platform. Amateurs can form their own teams by searching for other local players using a robust set of networking and team management tools. In the near term, players will also be able to seek out coaches to help them accomplish their goals. At the top of the platform are professional teams that will be able to scout out amateur teams using the provided statistics functionality.
This platform provides a solution to team organization, management, and the problem of seeking out new esports talent. This also gives power back to the players, fans, organizers, etc., as blockchain technology eliminates the need for third-party intermediaries (game publishers are no longer part of the equation).
Blockchain Technology Gains Traction For Esports
DreamTeam supported only Counter Strike: Global Offensive at launch, and reached over 500,000 users in just 6 months. As DreamTeam gains traction, more esports games are joining its platform to take advantage of blockchain technology. On April 12, League of Legends, the popular game with over 150 million monthly users, joined DreamTeam. The enormous playerbase of League of Legends will have a major impact on the amount of users on the DreamTeam platform and will further encourage mass adoption of blockchain technology for esports.
“DreamTeam is the first platform in the world to allow teams to directly pay their players’ compensations. From now on, players and team owners can sign contracts by using the DreamTeam Test Token and negotiate and set the player’s compensation payout date and amount. This eliminates the risk of fraud and non-payment. It’s actually hard to grasp, as 150 million League of Legends gamers will be able to use DreamTeam not only to build a team, but as their key payment gateway as well,” Kokhanovskyy says.
Moreover, big-time investors are also starting to pay attention to DreamTeam. Earlier this month, the company announced it had received investment from Mangrove Capital Partners, a top-tier European venture capital firm. Among the fund’s most successful investments are Wix (NASDAQ: WIX), currently valued at $3.7 billion, and Skype, which was bought in 2005 by eBay for $3.1 billion. DreamTeam is the first ICO investment that Mangrove Capital has made. In addition to the funding from Mangrove Capital, David Waroquier, Partner at Mangrove Capital, recently joined the DreamTeam Advisory Board.
The Future Of Esports
As the esports industry continues to rapidly grow, the current systems in place are broken. Fortunately, blockchain technology has the potential to transform the entire esports industry, giving power back to the players, coaches, regulators, fans and other key participants.
By creating a single platform for fair and transparent payments, along with the ability to create and organize esports teams and more, DreamTeam is one of the first decentralized gaming platforms to demonstrate the future of esports with blockchain technology.
“DreamTeam is providing esports and gaming enthusiasts with an opportunity to join the growing economy with a potential market size of $50 billion. We are excited to lead the evolution of esports and develop our infrastructure platform for millions of gamers, while building the payment gateway for the future of esports,” Kokhanovskyy says.