Who Will Share This Hundred-Billion-Dollar Business? A Further Exploration of Blockchain and Texas Hold'em Integration (Part 2)

2024-10-10 119

Source: Guatian Lab

To write this case study, I've been deeply experiencing the product capabilities of both Coinpoker and MTT Sports, and participated in MTT Sports' first week of competition. With incredible luck, I actually won the championship in the first week's competition! And I already received the first week's championship reward of 0.5 BTC and 6,946 MTT tokens on October 8th! Riding this momentum these past two days, I quickly completed the second part to share with more friends for reference.

The first part discussed how blockchain technology can integrate with online poker in various ways. In this second part, we'll use case studies to analyze what pioneers have already emerged in the market. Over these past few years, many projects have entered the WEB3 online poker space - our Guatian partners have researched and experienced more than a dozen of them: Coinpoker, W3poker, NUTSDAO, GalaGame PokerGO, XCard 7Deuce, zkHoldem, PokerDAO (Mental Poker), InPoker, Web3 Poker Club, DreamPokerClub, Macondo, CCpoker, ChipChip, MTT Sports...

Many projects have disappeared as of today, while some continue operating at low cost but with pitiful daily active user numbers. To be frank, some teams just packaged online poker code with WEB3 concepts, issued NFTs and tokens, raised money and ran - though this could be considered basic WEB3 operations. Among those that have managed to keep operating until now, very few have business models that can sustain themselves. In the WEB3 world, we've selected the most influential cases for each of the two types of poker - cash games and tournaments - for analysis.

Case Study 1: Cash Game Representative Coinpoker

Coinpoker can be considered an evergreen in WEB3 online poker. When I get the itch to play these past few years, I can only go to Coinpoker. Frankly speaking, this is out of necessity, because most WEB3 online poker projects don't even last a year before shutting down. At least Coinpoker has been operating steadily since 2017.

One point that Coinpoker emphasizes in their external communications is the transparency and fairness of their card dealing, with their RNG (random number generator) being publicly certified. The game mode is still primarily cash games, where users can deposit USDT to join tables, with about 500 daily active players.

The project issued a CHP Token, which isn't listed on any exchanges, only trading on decentralized DEXs, with rather basic token utility and distribution design. We feel this is because cash game poker would be classified in the gambling sector, so investment institutions and exchanges are hesitant to associate with such projects.

Regarding product experience, I really want to criticize many aspects, but I won't include screenshots. Their interface doesn't even center the player position; there's only one quick bet option of 3x; no Check/Call shortcut keys; and while the main interface seems to have many features, only the cash games have any activity, and finding tables is visually exhausting!

These poor product experiences make it really uncomfortable for someone like me who was used to WEB2 online poker like PokerStars years ago - it's like switching from 4G network back to 2G. Even the crucial deposit process is confusing with no user guidance - I only confirmed I was doing it right after cautiously testing with a small amount. The reason Coinpoker currently dominates WEB3 cash game online poker isn't because they're doing great, but because the competition is just too weak - most haven't survived two or three years, let alone compete on user experience. No wonder so many WEB2 investment institutions view WEB3 products as Ponzi schemes - after all these years, they haven't focused on improving product experience, only caring about CX and token issuance.

Of course, Coinpoker does deserve praise for two points: First, withdrawals are nearly instant; Second, user registration only requires email and phone, making it convenient for WEB2 users to enter.

Case Study 2: Tournament Representative MTT Sports

When we first encountered this product, we found its whitepaper clearly stated MTT Sports Foundation's mission: to use decentralized technology to build the world's most successful multi-table esports brand and promote MTT-style esports into the Olympics. This ambition is undeniably impressive. While esports has already become a major event in some large sporting events, such as seven esports games including League of Legends becoming new events in the 2023 Asian Games, if esports can truly enter the Olympics, it would undoubtedly be a huge elevation for the entire industry's image and help reinforce the consensus that poker tournaments are not gambling.

In terms of current product experience, MTT Sports is not only dominant in WEB3 online poker, but also a top-tier product even in WEB2. Everyone can click "Play Now" to experience it firsthand.

When I first started playing MTT Sports, I immediately noticed several distinctive product features:

It's a web-based product that can be played directly through URL links on both computers and phones (phones can generate an APP icon directly from the link for convenient access), reducing user entry barriers. Many online poker platforms require downloading an APP, which actually increases the difficulty of user entry.
Players who have tried it can experience MTT's smoothness - a web game achieving APP-like responsiveness and speed requires the project team to have extremely solid technical capabilities.
Account login fully supports three modes: Google account, email+password, and crypto wallet.
Comfortable game interface with good user experience on both desktop and mobile.

Because of these impressive product experiences, we began tracking and researching the MTT Sports project, hoping to get in early.

Here are some analyses after our research

First, Product Positioning.

MTT Sports is not just online poker - as its full English name Multiple Table Tournament Sports suggests, it aims to build "online multi-table game competitions" integrated with blockchain technology. Poker is MTT's first game, and they've also developed an EVM public chain based on Cosmos. To be clear, currently MTT only offers tournaments, no cash games! MTT Sports positions itself as a WEB3 esports project.

Do these kinds of online poker esports projects have potential? Let me give an example: currently the most influential WEB2 poker tournament is WSOP - last year its main event had over 10,000 registrants, a total prize pool of $93 million, with the champion winning $12 million.

The tournament economic model is simple and effective - the prize pool comes mostly from entry fees, with some from advertising and peripheral revenue. This means players' earnings come from individuals with real willingness to pay, not like Ponzi schemes where old users' principal generates returns from subsequent players' principal. Therefore, the tournament economic model is healthy and sustainable - you can profit because you have confidence in the transparency and fairness of game rules + confidence in your competitive abilities. While Ponzi competitive models mainly profit through "getting in early + running fast".

Second, Project Background.

On MTT's Twitter @mtt_sports, we couldn't find any description of the project team's background, nor in the current three versions of the whitepaper - we only know it's operated by an overseas team. Before Token2049 Singapore in September 2024, MTT Sports deliberately maintained a low-profile testing image. But after the first week of competition started in October, all metrics began surging: currently there are 16,000 Twitter followers, 305 Discord community members, 34,000 Telegram community members. But there are already about 600-700 people playing mining tournaments and daily tournaments every day, making this project far ahead in daily active users in the WEB3 poker sector. And friends who have done their KYC know it's very strict - these are basically all real users.

The project rewards are straightforward: Starting October 5th, official competition begins with 1 BTC reward per week until 100 BTC are distributed! Originally most WEB3 users came for profits, some friends only started learning poker then - so don't compare learning ability with WEB3 users, haha! Recently some friends have messaged me asking if this project is reliable and worth following long-term? I can only respond with my personal judgment: Definitely worth it! Because we found some clues about this project's main investors, who have strong industry experience and technical background, which explains why MTT Sports' product experience can be so good.

Third, Project Planning

MTT Sports has three whitepapers - one for the MTT Network public chain, one for MTT Tournament, and one about tokenomics. To promote MTT Sports, the project adopted a free entry model for users - the "free mining" that WEB3 users love most. As long as you think your poker skills are good, top rankings can get rewards. Currently several levels of online tournaments have opened, which we'll introduce specifically later in this article.

There are some points in the whitepaper that particularly caught my attention:

There will be large offline tournaments annually - this shows ambition to compete with WSOP;
Qualified individuals are allowed to open and manage clubs - the Guatian community strives to become one of the first club operators;
Very strict identity verification mechanism, with the highest level requiring facial verification;
RNG dealing mechanism, which is described in great detail, but the current whitepaper doesn't show how to verify if this mechanism is transparent and fair, or how blockchain technology is integrated into the dealing mechanism.

Fourth, Economic Model.

Currently the main rewards for players participating in mining tournaments, daily tournaments and weekly tournaments are MTT Tokens (weekly tournaments also have BTC rewards). This is MTT Sports' only token type. The total supply is 2.1 billion, currently not listed on CEX or DEX. The distribution chart is as follows (see whitepaper for detailed explanation):

We can see the main output comes from tournament rewards, accounting for 40%. This version of the whitepaper gives detailed explanation of MTT token output, which we've summarized in the chart below, but the whitepaper mentions very little about MTT consumption scenarios, so we can only write based on current product experience.

Actually MTT Token could have many more consumption scenarios. After brainstorming, here are some suggestions for the project team:

Lower-tier tournaments can be free to enter, while higher-tier tournaments and offline events can use MTT tokens as entry fees;
Players establishing and operating clubs need to stake MTT tokens, and later when popularity increases, club seat auctions can be conducted with MTT tokens as the bidding currency;
During offline events and activities, some merchandise sales and partner sales can accept MTT payments;

So looking at the economic model, MTT Sports doesn't have as many fancy features as other WEB3 projects - no NFTs, single token, more aligned with competitive gaming business logic: want to earn money, you need to win. The current tournament mode can serve as MTT Sports' basic scenario, with future expanded scenarios potentially including club versus club competitions, or poker celebrity idols becoming MTT brothers and sisters, haha, which would create more application scenarios for MTT Tokens.

Fifth, How to Get Started (Game modes vary and change over time, the following is for reference only)

Let's explain simply using the computer web version: After entering the website, first register an account, then complete KYC verification by level. Then select Tourney from the left sidebar on the main interface to enter.

Currently there are three types of tournaments in Tourney that you can register for and enter at the scheduled time. The mining tournaments happen every hour. Based on the number of participants, the top 20-40 players (in the money) each receive 10-15 MTT Tokens, with the rule being that the tournament ends when the specified number of players in the money is reached. Before October, first place also got a champion title - small reward but great honor! Mining tournaments are for practice.

The daily tournament starts at 20:00 (UTC+8), where after reaching the money you continue until first place is determined, with different rewards for different rankings. For example, first place in the daily tournament gets around 800 MTT Tokens.

The weekend tournament currently has the biggest rewards, with a weekly total prize pool of 1 BTC + 100,000 MTT tokens. The final table of 9 players shares 1 BTC, while the top 200 players split 100,000 MTT tokens. The weekend tournament has the most participants - the first week's tournament already had nearly a thousand participants.

Tuesday through Friday there are multiple qualifying tournaments (Seat to DAY1), where the reward for top few dozen rankings is an entry ticket to the weekend tournament. On Saturday, users with entry tickets can participate in the DAY1A tournament at 20:00 or DAY1B tournament at 24:00. If you accidentally lose everything in between, you have one rebuy chance but must spend 110 MTT tokens. Top rankings from DAY1 can enter the DAY2 tournament at 20:00 on Sunday, bringing their chips from DAY1 into DAY2. DAY2 is a brutal elimination tournament, most torturous, with only 9 people making it to the final table at 20:00 on Monday.

After registering for tournaments, click My Games under Tourney to see how many tournaments you're registered for, with thoughtfully added countdown timers reminding you when you need to enter.

Other function tabs like Rank and Shop are also open now - everyone can explore and familiarize themselves.

Sixth, Future Outlook

MTT Sports occupies a very unique position in the WEB3 sector - it's currently the only product we've seen that only does tournaments without cash games, while other online poker platforms all have cash game modes. This has given many investment institutions and exchanges interested in poker and esports a green light regarding MTT tokens: MTT Sports doesn't involve sensitive gambling, so they can cooperate.

Currently MTT Sports' profit model is very clear - as long as they calculate entry fees and other income to exceed prize pool payouts, this is a profitable business model. Combined with the strong shareholders' investment of 100 BTC, this ensures long-term operation of the project.

Currently users can earn MTT tokens by participating in various tournaments. They can hold and wait for the token's value to materialize - we believe MTT tokens may bring everyone bigger surprises.

Final Summary

Guatian Lab has been riding the waves in WEB3 application sectors for over three years, researching categories covering chain games, social, and RWA etc., continuously exploring what kind of projects can attract real users and build sustainable business models.

Two points have gained consensus among some partners:

Blockchain technology can be used to compensate for WEB2 product shortcomings or upgrade products for better user experience - for example, online poker's card dealing, anti-cheating and asset storage can all be improved using blockchain technology;
The product quality itself should at least reach a normal level - we don't demand everything be "Black Myth: Wukong", but at least not appear too fake and inferior.

For Part 1, see: Who Will Share This Hundred-Billion-Dollar Business? A Further Exploration of Blockchain and Texas Hold'em Integration (Part 1)