What is Rollbit? Is it worth the hype？

Recently, the GambleFi sector has been on the rise, with Rollbit (RLB) standing out as particularly dynamic. Today, we'll delve into this project and explore the reasons behind its soaring popularity.

Overview of the Rollbit Platform and RLB Token

Rollbit Platform: A Leading Name in the GambleFi Space

Rollbit is a comprehensive GambleFi platform founded in February 2020. It offers a diverse range of products, including casinos, sports betting, futures trading, and an NFT marketplace. As of now, Rollbit boasts a market value exceeding $633M. According to its official website, the platform has amassed over 1 million registered users.

In March 2021, the Rollbit platform underwent an upgrade to V2, which involved improvements in rule design and user experience. Currently, when it comes to participation, Rollbit caters to both Web 2.0 and Web 3.0 users, making it user-friendly. You can register an account using your email, or enter the platform through your Steam or Twitch accounts. Additionally, you can directly engage with the platform's activities by connecting a cryptocurrency wallet (currently, only MetaMask is supported).

In terms of products, like many GambleFi platforms, Rollbit adopts a "gaming lobby" model, offering different games across various sections. Besides some of the common traditional games, Rollbit has introduced several innovative features.

Within the Casino section, the platform has set up several games to enhance interactive experiences among users. This includes "Challenges" that any user can initiate, and "Bonus Battles" where users interact and compete using the available balance in the prize pool.

In the sports betting section, Rollbit allows players to place bets on a wide range of sporting events. This includes, but isn't limited to, the NFL, NBA, Soccer, UFC, and esports.

Another standout feature of the platform is its futures trading section where users can trade more than twenty leading cryptocurrencies. The trading leverage can go as high as 1,000 times.

RLB Token: 100% Airdropped

RLB is the utility token of the Rollbit platform, initially introduced as part of the Rollbit Lottery product. Token holders can earn rewards by staking, and they can also participate in lottery drawings and other activities.

Unlike many tokens, RLB was not issued through the typical ICO (Initial Coin Offering) process. This means there was no external fundraising or OTC (Over-The-Counter) trading at its inception. 100% of the tokens were introduced to the market via a free airdrop.

This method of token issuance attracted an initial cohort of "believers" to Rollbit. Why, you might ask?

Let's reflect on a similar case in the DeFi sector: yearn.finance. When its token was launched, it instantly garnered significant market attention. The reason was the team neither conducted any fundraising for the project nor reserved any $YFI tokens for themselves. The intention was to genuinely give ownership of the platform to every token holder. This is often referred to as the "Fair Launch" model. This approach earned YFI praise as a true embodiment of decentralized principles. Moreover, the price of the YFI token even surpassed Bitcoin at one point, breaking through $60,000.

Following this line of thought, compared to projects in the same field that reserve a portion of tokens for the team, RLB's distribution, which closely mirrors a Fair Launch, undoubtedly aligns more closely with the decentralized ethos of blockchain. As such, it's easier for the community to embrace and endorse.

Why Has RLB Been so Popular Recently

Implementation of a Token Buyback and Burn Program

On August 9th, one of Rollbit's co-founders, Lucky (@Lucky_Rollbit), announced on his Twitter that in order to further enhance the significance of the RLB token to the entire project ecosystem, the platform would launch a "Token Buyback and Burn Program."

According to this plan, the platform would allocate a portion of its daily fee revenues to purchase RLB tokens from the open market and then send them to an address beyond anyone's control, in order to burn them. The funds designated for this token buyback would be derived from 10% of the casino's revenues, 20% of sports betting revenues, and 30% of the futures trading.

This initiative aims to continually reduce the circulating supply of RLB in the market, thereby creating consistent buying pressure to support and potentially boost the token's price. Moreover, as the buyback funds originate from a percentage of the platform's revenue, the more the platform earns, the larger the daily funds available for the token buyback. This means that as more RLB tokens are burned daily, there's a more substantial upward price momentum. It's a narrative where both the platform and token holders mutually benefit, which resonates well with the market. As a result, the RLB token price skyrocketed by nearly 70% on that day.

On August 10th, another co-founder, Razer (@Razer_Rollbit), further announced that the RLB buyback and burn program had transitioned to an automated phase, executing hourly. This news gave a further boost to RLB's price, pushing it soar to $0.20.

Revenue Sharing Plan for NFT Holders

On August 12th, seizing the momentum, Rollbit released another piece of positive news: stakers of the platform's NFT (Rollbot) could receive a 10% share from the hourly RLB buyback and burn.

Based on the real-time data from the Rollbit Dashboard, we can roughly estimate the benefits this plan offers to Rollbot stakers.

As illustrated in the graph below, the number of RLBs currently distributed to users as part of the hourly buyback program is approximately 5,000 coins. With RLB's price hovering around $0.20, the platform dispenses about $1,000 in rebates to users every hour. This amounts to a daily rebate total of roughly $25,000 to $30,000. Given the current sluggish market conditions, this is undoubtedly a generous offering.

Migration to the Ethereum Network

This event occurred at the end of June. Even though there was a gap between this and RLB's subsequent strong momentum, it undoubtedly set the stage for it.

Initially, RLB was deployed on the Solana blockchain. However, last year's FTX collapse had a series of negative impacts on Solana, affecting various projects within its ecosystem. On June 28th, considering the developmental bottlenecks brought about by the Solana blockchain, Rollbit migrated RLB to Ethereum.

Wondering what exactly happened to Solana? For details, please refer to the research article: Solana Rating Update - Solana Network or Solana Not-Work?

As a dominant public chain in the crypto market, Ethereum's vibrant ecosystem infused RLB with vitality and garnered more attention. In the 10 days following Rollbit's announcement of the token migration, RLB's price rose from $0.021 on June 28th to a record high of $0.0695, marking an increase of over 230%.

In the announcement, the Rollbit team also stated that users will be given ample time to migrate their RLB tokens to Ether and that user positions will not be affected in any way.

Narrative of GambleFi in a Bear Market

In the current market where liquidity is limited, many users turn to meme coins or gambling-related projects for entertainment or potential profits. This shift might be due to the lower barriers of entry in these areas, and also because they often boast higher user activity and liquidity—highly attractive features for those looking to make quick moves.

For insights on the meme coin domain, refer to the course: Memecoin Playbook - How to Spot and Trade Memecoins

Moreover, compared to traditional platforms, blockchain-integrated GambleFi platforms possess more appealing attributes for players, such as fairness, transparency, and decentralization. These characteristics might attract users who prioritize fair game rules or anonymity.

Accompanying Skepticism of Rollbit's Popularity

While many in the market have been bullish, and RLB's price trajectory has indeed not disappointed (so far), with this wave of popularity comes a fair share of skepticism. Some have even dug up certain questionable aspects of the project's past.

Concerns Over Transparency Stemming from Suspicions of 'Invisible Market Makers'

Currently, Rollbit is not entirely operating on-chain. If one were to make assumptions with a degree of suspicion, the betting, revenue, and transaction data users see on the platform's frontend could potentially be fabricated from a black box.

On August 20th, a Twitter user, thiccy (@thiccythot_), posted claims about possible invisible market makers among the major holders of Rollbit.

According to thiccy's observations, multiple large holding addresses were consistently dumping RLB, often in hundreds of thousands per transaction. While some of these sales occurred before the token buyback and burn program was implemented (when RLB's price soared), such phased selling can be seen as regular profit-taking. Still, it does raise questions: The Rollbit team could definitely have been more transparent. If GambleFi loses its decentralization and transparency, how does it differentiate itself from traditional casinos? Is the only advantage of anonymity that only the market maker enjoys?

For reference, currently, in the crypto market, platforms that claim to be entirely on-chain for GambleFi include but are not limited to @WINRProtocol, @Goal3_xyz, and @SankoGameCorp.

Controversial History of Pumping and Dumping

A "surprising" discovery comes from a user named Alisko2000 on Reddit's largest crypto community, r/CryptoCurrency.

This user claims to have accidentally stumbled upon some dubious past activities related to "RLB Shiller". For instance, a KOL named @gainzy, who was once watched closely by the so-called "Blockchain Detective" ZachXBT, was suspected of receiving sponsorships from Rollbit and offloading RLB tokens. This selling reportedly exceeded three million dollars at its ATH.

Of course, having influential individuals endorse a platform isn't inherently wrong; after all, even the best product needs a shoutout for more people to see its buried value. However, in the crypto market, it's not rare for KOLs and project teams to jointly "pump and dump", taking advantage of their followers. Given Rollbit's questionable past and the current bullish market trend driven by various KOLs, it raises concerns: Are they preparing for another harvest?

Will the Flywheel Keeps Spinning

In the story of Rollbit, the platform currently operates on a compelling "flywheel" model: the platform makes money, takes a cut, rewards users, which in turn boosts users' confidence, leading to increased market buying pressure, then the platform continues to make money and the cycle repeats.

Breaking down the token buyback and destruction plan and the staking dividend plan discussed earlier, this win-win scenario for both the platform and its users is created like this: The platform profits and then shares a part with its users. This whole cycle is fundamentally based on the platform's profitability - to be blunt, the money earned from players participating in its games. This model does resemble the essence of a "Ponzi scheme". Such schemes might be appealing for a short time, but often, they're unsustainable in the long run.

So, why does Rollbit resemble a "Ponzi"? What is a "Ponzi Scheme", and what characterizes it? For more on this, refer to TokenWiki: What is a Ponzi Scheme

Coming back to Rollbit, both the platform and token holders profit from players. Players have wins and losses, but token holders enjoy consistent dividends. So, how long can a GambleFi platform, which doesn't seem to have more advantages than traditional online casinos, attract players to "donate" their money? If the platform fails to retain player loyalty or enhance its client acquisition continuously, the flywheel might eventually slow down or even stall.