In our last article, we described how Ridotto is reinventing the gambling & lottery experience using blockchain. We also explored the role Ridotto is playing to solve these issues using unique and latest blockchain solutions.
In this article, we explore the true nature of staking and rewards that is truly in the gamblers’ hands. Before entering into the full scope of staking and rewards with Ridotto, let’s take a look at how casinos, lotteries, and betting work.
The House Edge
Is a casino profitable? The straight answer is yes, but there is a catch to it. The first thing that comes to mind is that casinos profit from losses made by players. This is not true, as casinos make a lot of profit from “house edges.” The house advantage is a built-in advantage on every casino game that ensures the odds are stacked in favor of the “house”; in this case, the casino. This can also be mathematically defined as the percentage profit the casino takes from every bet that the player makes. For instance, the house edge on a game like roulette is about 5%. This means that for every dollar spent by a player, the casino keeps 5 cents of their money as profit. So when a player bets $5 on red 100 times, he uses $500, and the casino makes $25 whether the player wins or loses. The house edge is not only in a roulette game. It is on every game, including table games, slots, and lottery.
Let’s take a coin flip game to understand how the house edge work. For instance, if you place a bet on a fair game where winning on heads and losing on tails, the scenario will be described as shown below:
For an ideal case, if the player wins then loses on different games, then he gets on average $0 while the house edge or casino gets $0.
In this case, the player loses $0.05 on average when he plays, making the house edge 5% on every bet.
What about other casino games? how to get the house Edge? In fact, there are several ways of calculating the house edge. Let’s focus on the popular one, which is the Kelly Criterion. The formula used is:
Where :
- f* is the best as a fraction of the current bankroll (bet size/bankroll)
- b is the decimal payout odds received on the bet (b>1)
- K is the fraction of the Kelly bet to use (0<K≤).
Using the Kelly Criterion on the popular casino game, it’s crystal clear that the house always wins.
What about the lottery?
The case is not different for lotteries. You might have gotten a ticket for a lottery, but the chance of you winning is slimmer than the word “slim.” Where does all the money go? For instance, the Powerball lottery money utilizes only about 50% of the total money made for the lottery winners. The rest of the money is spread amongst other areas like local taxes. In this case, the lottery operator always wins while winners only get half of the money. Without all the fees, the biggest jackpot could be $3 billion rather than $1.5 billion.
The vigorish
Betting companies use a method called “the vigorish” to earn commission on losing bets. This represents the amount charged for every bet placed and is only collected by the bookmaker if the bettor loses a game. This is similar to the house edge method for casinos.
You are the house
The traditional ways casinos and the gambling sector make a profit are deemed non-transparent and ridden with challenges. In contrast, Ridotto leverages the Blockchain to deliver a truly transparent and secured gambling platform where the player can be the house.
In fact, by providing liquidity to Ridotto protocol, you become the house. All earnings, rewards, and fees will be shared across the pools. All the related information concerning the risk and reward (APR/Multiplier) is made available to every user.
Applying the house edge (HE) over a given amount of a total game spent (TGS), we can identify the minimal pool reward (MPR) using the formula below :
The APR can be calculated following the formula below :
Example on Ridotto
The table below shows how much you can earn by providing liquidity to Ridotto pools. The liquidity pool will have a limit over the total value locked so that the earning will depend only on the number of plays. The more players we have, the more APR you can get.
As an example, providing liquidity to the American Roulette gives the user an APR of up to 263%. For total gameplay of 1M$, the American roulette pool will share to the pool a reward of $ 526K. It will increase to $26M rewards for an estimated total game of $ 50M.
Conclusion
Ridotto brings about a paradigm shift in the gambling sector and how players earn rewards by staking and providing liquidity. This disruption in the gambling, casino, and lottery sector has been birthed by the need for change from how traditional casino businesses constantly earn from players and are designed to always be in favor of the house. Ridotto leverages Blockchain technology to provide the best earning opportunities for players and liquidity providers. Ridotto is the next-generation gambling protocol.
About Ridotto
Ridotto is the first cross-chain gambling and lottery protocol based on complete transparency, anonymity, security, and fairness. Our approach is to provide an open protocol driven by the community, where users can play or build games and earn rewards by providing liquidity to the DeFi ecosystem.
On top of the protocol, we developed the Ridotto platform. An easy-to-use and user-friendly app that offers a genuine and vibrant gambling experience.
Website: https://ridotto.io
Twitter: https://twitter.com/ridotto_io
Telegram Announcements: https://t.me/ridotto_io
Telegram Community: https://t.me/ridotto_community
