Herosphere is an Austrian-based peer-to-peer esports betting operator that will seek to offer 600 million Ethereum-based tokens called Hero Coins.
Paul Polterauer, chief executive and co-founder, said he had been encouraged to seek an ICO for Herosphere. He and others saw the success of the fundraising for esports-related companies such as platform provider First Blood, which raised $5.5 million this time last year.
“We are convinced that that the esports and crypto community have a big overlap,” he told Esports Betting Report. “Also the success of other esports ICOs, with different products, encourage us in this opinion.”
Herosphere is following in the wake of Unikrn which will be launching its own ICO later this month. It hopes to raise up to $100 million via the sale of its own Unikrn Gold tokens. Polterauer said that it was difficult to predict the precise trajectory for cryptocurrencies, but it was fair to say they were becoming “more and more mainstream.”
“We strive to place Hero as the number one choice on the market for other betting providers who want to implement a cryptocurrency or for new providers who want to build a decentralized system,” he added.
Cutting out the middleman with an ICO
Herosphere began life in 2014 as a peer-to-peer sports-betting operator called thesocialbet.com but subsequently pivoted towards esports. It says it has 200,000 users on its platform. But its target is 5 million customers within the next two years.
Its big sell for the ICO is that it can “cut out the middleman” in betting, an element that Polterauer believes has an appeal to the esports audience.
“We see a lot of traditional betting providers adding esports to their portfolio of sports with moderate success,” he said.
“Traditional betting has not seen much innovation in the past 15 years. Esports has a young audience and new generation with different demands.”
More about Hero Coin
According to the white paper, the Hero Coin is an ERC20 token on the Ethereum blockchain. It allows for the exchange and interchange of a point-based pooling system with the purpose of betting.
The platform displays events in the form of prediction games. The Hero Coin is used as a reward and incentive token in the participation of these events. All coin holders will be rewarded for holding Hero. A general reward mechanism is hardcoded into the smart contract.
The minimum reward is one percent of all the Hero volume played. Anyone can become an event provider. They get a reward for their participation and their efforts at event creation.
The white paper cites as an example the potential for a Twitch streamer to incentivize their existing viewers in customized private contests. They are rewarded through the Hero network itself for the creation of the contest.
Polterauer also draws comparisons with skin betting.
“The rise of skin betting has shown us that there is a high demand for alternatives to traditional betting,” he said. “Which is clearly a good sign for us. Hero can be seen as an evolution of skin betting but with a different approach, with trust, security and transparency, since a lot of skin betting sites are very scammy and fraudulent.”
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Looking to 2018 for Herosphere
The company said the proceeds of the sale will go largely to further development. The breakdown is as follows:
- 40 percent: Hero development
- 30 percent: Sales and marketing
- 12 percent; Third parties including PR and affiliate programmes
- 10 percent: Administration
- 8 percent: Contingency fund
Herosphere will only exchange 600 million Hero coins for Ether in the ICO process. But the company will create a further 1.4 billion coins. The company says it reserves the right to exchange for other cryptocurrencies or fiat currency at a time of its choosing.
The development process will take another 12 months before anyone holding Hero coins will be able to use them on a site. The roadmap in the white paper forecasts that a closed beta offering will be operational by the fourth quarter of this year. But the “full integration of decentralized games” won’t take place until the fourth quarter of 2018.
Said Polterauer: “One issue at the moment is the speed of the blockchain. But we are already in talks with projects, working on blockchain systems with significantly more transaction speed, to join their closed beta.”
As part of the roadmap, the company says it hopes to produce live prediction games in the second quarter. A Twitch integration will follow that will allow “influencers” to host private tournaments. The company also hopes to expand into China and host an invitational tournament in late 2018.