Cryptocurrency Comes To Esports: Betting Site Unikrn Launches ICO

Written By Scott Longley on July 6, 2017 - Last Updated on January 22, 2018

[toc]The chief executive of esports-only betting operator Unikrn, which has launched an Initial Coin Offering (ICO) for its own cryptocurrency, has warned that “shady” skin betting operators are likely to try and take advantage of the thriving market for coin offerings.

Here comes Unikoin Gold

Rahul Sood, the founder and chief executive of Unikrn, said he believed there was a natural fit between esports betting and cryptocurrencies after his company announced an offering for UnikoinGold, an Ethereum blockchain-based token.

Unikrn hopes to build on the success of its existing Unikoin token, which gives users the ability to bet on esports in regulated markets and win prizes in markets where Unikrn is not licensed to operate. The company has turned over a quarter of a billion tokens since launch two years’ ago.

“I think esports is at the cutting edge of sports and video games and crypto is at the cutting edge of commerce,” said Sood. “Since we already have the Unikoin, it only makes sense for us to turn it into a crypto.”

According to the white paper issued to promote the offering, the new UnikoinGold will give additional functionality to its previously centralized token system. Users will be able the trade the Ethereum blockchain-based ERC20 token on the open market. The market will decide the value of each coin.

Unikrn promises further benefits to UnikoinGold holders including exclusive immersive skill and spectator eSports products.

The old Unikoin will then become UnikoinSilver and users will still be able to earn, bet and compete anywhere in the world. Along with UnikoinGold holders, the Silver users will be able to acquire raffle tickets to win prizes. Those prizes include in-game item skins and gaming hardware.

Skin betting and ICOs

In the white paper, the company warns that skin-betting sites are likely to take advantage of the widespread enthusiasm for token sales. It suggests that “nothing would be more devastating” for the future of Ethereum-based cryptocurrencies than for a “series of scams to emerge on the various exchanges.”

The soaring value Bitcoin and Ethercoin are fueling the booming ICO market. The total value of cryptocurrencies as of the end of May exceeded $91 billion.

The public should be “super careful when buying cryptocurrencies” around skin gambling, said Sood.

Skin gambling is illegal; pure and simple,” Sood said. “[Game developer] Valve doesn’t support it, in fact Valve has, will, and will continue to shut down unregulated skin gambling sites.”

A number of gambling-related ICOs have taken place already or are in the works. Jez San, the ex-founder of PKR, successfully launched an offering at the end of June for his initiative. He raised $26 million, while DaoCasino raised $12 million on the first day of its coin crowd sale at the beginning of this month.

A closer look at the Unikrn ICO

The Unikrn ICO will distribute a total of one billion UnikoinGold tokens:

  • 20 percent sold in the process
  • 50 percent held internally
  • 15 percent given out as part of partnerships and marketing
  • 15 percent will serve as a betting reserve

The pre-sale will take place for a 30-day period in September and October with accepted currencies being:

  • The US dollar
  • Ether
  • Bitcoin

After the presale, buys must purchase UnikrnGold using Ether.

Of the money from the ICO, Unikrn said that 60 percent would go to platform development with the remainder going largely towards marketing and administration costs.

Unikrn said that existing stakeholders in Unikrn would have the opportunity to participate in the presale at a 20 percent discount to the sale price.

Unikrn’s investors

Unikrn has a star-studded list of venture capital investors including:

  • Ashton Kutcher’s Sound Ventures
  • Mark Cuban, the owner of the Dallas Mavericks
  • Shari Redstone’s Advancit Capital
  • Elizabeth Murdoch’s Freedland Ventures
  • 500 Startups
  • Hyperspeed Ventures
  • Indicator Ventures
  • Binary Capital
  • Australian gambling giant Tabcorp

The company raised $10 million in 2015.

It is not clear whether any of the original investors will be participating in the UnikoinGold offering. However, Binary has launched its own investment management company called Binary Financial. That company brokers large value cryptocurrency transactions as well as providing a proprietary crypto trading platform.

The token expertise for the UnikrnGold ICO is comes from CoinCircleErick Miller from Hyperspeed runs CoinCircle. He recently co-founded the Blockchain Lab with UCLA. CoinCircle will develop and help underwrite the first tranche of coin sales.

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Gambling and cryptocurrencies

The attitude of gambling regulatory authorities towards cryptocurrencies is still in its nascent stages. However, Sood points out that the Isle of Man, where Unikrn holds a license, has already approved alternative currencies for betting in regulated environments.

“The Isle of Man is way ahead of the game,” he said.

However, Sood failed to answer questions with regard to the position of the UK Gambling Commission, where Unikrn is also licensed.

The commission has been far more cautious with regard to cryptocurrencies and has said previously that any operator wishing to accept digital currency as a means of payment “must satisfy themselves and the Commission that they can meet their obligations for anti-money laundering and for social responsibility.”

Its position with regard to an operator which has generated its own cryptocurrency remains unclear.

“We aim to work with all regulators to understand the ins and outs of a dedicated crypto betting platform,” said Sood.  

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