EURO 2024 narrative for GambleFi: RLB + CHZ to benefit
Heightened activity in sportsbetting to drive incremental attention to RLB and CHZ. This article was first available to OLAP holders on 15 May '24.
EURO 2024 happens in June to July 2024. With over 5.2b viewers in UEFA EURO 2020 (held in 2021 due to COVID), we think this will drive incremental attention to sports related tokens and GambleFi. For RLB, this will be a significant revenue event - sportsbetting now generates ~30-40% of its revenue, and we believe this could rise to more than half. For CHZ, we’ve seen historically how such sporting events lead to outperformance ~20 days before the event. Additionally, we see a narrative forming around fan tokens with additional catalysts from the Dragon8 chain upgrade (smart contracts + dApps) and partnerships (eg. Azuro).
Rollbit: EURO 2024 + More revenue
Revenue up since initiating buyback and burn: $50m / month
Since turning on its buyback and burn (this is when the data starts), Rollbit has been growing its revenue - this is up from ~$40m a month in Aug'23 to $50m a month in Apr'24. A large part of this revenue growth is made up by its Sportsbook, which is now 30-40% of revenue in Apr'24 vs. 15-20% in Aug'23.
Addressing buybacks
Current levels of revenue imply $5.5m of buybacks each month with 33% of outstanding RLB supply bought back each year. This is essentially a price / earnings ratio of 3x. Around 47% of all RLB supply has been bought back. Despite this, price action has remained weak, underperforming ETH by 55% since the start of the year.
The combination of large supply buybacks and weak price action is no wonder the market constantly calls the authenticity of buybacks into question. Given that the primary RLB trading market is on Rollbit itself and opaque, it is hard to verify if buybacks are being sold into.
That said, we think there is a limit on how low price can go. At current levels of revenue, it takes slightly over 3 years to buy back all of Rollbit’s supply. The amount bought back is a function of revenue and price.
The more RLB bought back, the scarcer the RLB, the tighter the holdings and the fewer the sellers. While we have been surprised at how many coins sellers historically had, we think the longer a “low RLB price / high buyback” scenario persists, the more tokenholder pressure there will be on the team to increase transparency which has historically translated into positive price action.
Revenue boost from EURO 2024
UEFA EURO 2020 saw more than 5.2b global viewership. We expect EURO 2024 to capture similar levels of activity, which should drive Rollbit’s revenue higher, resulting in larger buybacks through the summer (June to July 2024).
Rollbit’s revenue is volatile, with some well performing days bringing in 2-3x the revenue of weaker performing days. This is largely driven by sportsbetting. With matches occurring almost everyday, we expect to see elevated revenues and consequently buybacks.
Underpositioning and Attention
The positioning in GambleFi has been light, and is ideal as a catalyst driven long. We think EURO 2024 is such a catalyst, and should drive attention as well as buyback flows to the token.
Chiliz: EURO 2024 + Chain upgrade
CHZ was one of the only token which had narrative alignment during the World Cup in Nov'22, longing the token roughly 20 days prior to the event had yielded close to +80%. We are roughly 30 days away from EURO 2024.
While we believe Chiliz will see incremental attention as a EURO 2024 narrative play, it also has other catalysts lined up, including:
Dragon8 chain upgrade: Chiliz’s Dragon8 chain upgrade goes live on 21 May’24, introducing an EIP1559 fee burn feature and new tokenomics, introducing inflation at 8.8% initially and falling to 1.88% after 14 years. In our convo with Chiliz' CEO Alex Dreyfus, we understand that more dApps will be coming to Chiliz 2.0 post the upgrade.
Azuro partnership: Chiliz announced that it is partnering Azuro by co-sponsoring a grant program for developers to build onchain sports prediction markets.
Disclosure: The opinions expressed in this research piece are solely those of the author(s) and do not constitute financial advice. Ouroboros Capital may hold position(s) in the token(s) mentioned in this research articles. These position(s) may influence the author's perspective and analysis of the token. Readers are encouraged to conduct their own research before making any investment decisions.
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