Polychain puts its money on HotStreak to streamline sports betting using blockchain

techcrunch.com:

In the world of sports betting, instant payments and reliable custody are key to the user experience. HotStreak, a web3 platform for daily fantasy sports (DFS) contests, is wagering that the decentralized nature of the blockchain makes it an ideal solution for DFS platforms.

The sports betting market in the US has grown rapidly as states begin loosening regulations around the industry. It doubled in size in 2021 with over $52.7 billion total wagered over the year, according to Morning Consult.

There are two major issues with large sports betting platforms like FanDuel today, HotStreak CEO Greg Dean told TechCrunch in an interview. The first is that as a player, “getting your money in and out is extraordinarily painful,” he said, because payouts are tethered to legacy payment systems such as ACH transfer that require the user to trust the counterparty against whom they are betting on the platform to actually distribute funds to them.

While users experience the friction of slow-moving, centralized payment systems, operators bear the brunt of building and maintaining their own proprietary currencies on-platform to facilitate payouts, Dean said.

The team behind HotStreak’s web3 sports betting protocol Image Credits: HotStreak

“When you talk to somebody and you explain that [for] billion-dollar companies like FanDuel, when you open up their tech stack and you look inside, you see an on-ramp, proprietary wallet, a proprietary digital currency and a proprietary ledger, all kind of maintained by this centralized, trusted authority. I think we’re going to look back at that and kind of laugh at the industry a little bit,” Dean said.

From the operators’ perspective, he added, creating these payment systems creates overhead.

“It’s just a