Learn more about the challenges in Esports

The very first preconception that we want to address is that because Slips does not solve a "hard finance" problem - it should not be considered in the same bracket as lenders like Compound or other DeFi heavyweights.

Just a quick glance at the chart above will show the true size of the market that Slips addresses. Video games and Esports are mainstream and in a world where the majority of citizens face rolling lockdowns and live sports are functioning in limited capacity, we are presented with a perfect opportunity.

But why do we need to decentralize Esports? Is this just a quick get rich scheme we've concocted? The answer as you would expect us to give, is that "no", surprisingly enough there are serious structural issues in Esports that a technology like blockchain is perfect for solving.

General Problems Facing Esports

Growth not sustainable - valuations out of sync

The chart above shows an exploding market. Anyone with a business in this space will want to shout from the rooftops about how great everything is! But it's not strictly true, Twitch calculates "viewers" differently from Neilsen.

That's not to say there isn't massive demand for Esports. The success of games like Fortnite and the number of people willing to pack themselves into arenas to watch people play on a small screen tell you everything that you need to know!

But only a bold face liar would state that the industry is not in a bubble. Publishers like Epic (creators of Fortnite) use the profits from their games to subsidize their leagues. Even publishers without blockbuster titles know having an esports scene for their game is free marketing so funneling some of their profits is a no-brainer.

But sadly anyone whose pay-cheque relies on developers continuining to subsidize their jobs is in a precarious position.

Most teams are running huge deficits

You would think with publishers writing huge blank cheques that the teams would rolling in cash but sadly that's not the case. The majority of professional teams contacted during a study in 2019 to discuss their finances couldn't openly state that they were profitable.

So where is all the money going? Sadly as you will see below, it does not get spent on infrastructure (e.g. coaching and training) and the players are not seeing a fair share of the spoils.

There is a clear two fold solution to the problem: improve the transparency so you can see where the money goes and improve the incentives for team owners to invest into their roster and infrastructure.

Game companies have complete control

The problems above can be solved with technology. We can create audit trails, distribute prize money fairly and come up with clever solutions to put more power into the hands of players and less in the hands of the establishment.

But one of the biggest problems that Esports faces is that the gaming companies own the IP of the title and everyone in the ecosystem is at their mercy. It's only because game developers are being benovelent that Twitch streamers can broadcast their game play in the first place.

Without a complete overhaul of copyright and licensing laws, there is no "quick fix" solution to a problem like this. Some people might see Decentralized Autonomous Organizations (DAOs) like the ones Slips helps create as a stop gap solution until the laws can be made fairer for everyone.

Specific Problems Facing Players

Prize pools are not divided fairly - players are struggling

Earlier we mentioned that despite millions being pumped into Esports, this money was not trickling down to the players. The main reason for that is how prize pools are actually split. An Esport tournament usually creates a prize pool and sends out invitations to existing teams like Cloud9, Fnatic and FaZe to enter.

Tournament organizers need the big names to establish their events so that explains why the winners walk away with 50% or more of the pool and anyone below third spot gets very little for their contribution.

That is why our smart contracts make players and their accomplishments first class citizens and uses a "franchise" model for teams. Not only does that make seats in the league for teams more valuable (and a tradeable opportunity) - it makes it easier to distribute funds to the people that fans actually turn up to watch.

Amateurs are struggling to break through

If you are a fan of traditional sports, you will be aware that most have a well established pipeline that finds talented amateur players and helps turn them into pros through training academies, feeder clubs or relying upon college level drafts.

The cream of the crop always rises to the top and at the bottom end, gamers will always play their favorite titles without requiring financial incentives. However a huge gap of players in the middle that aren't quite world class but still talented enough to make a career out of their gaming skills are left stranded by the existing system.

The system relies upon thousands of hours of unpaid labour and new starters funding training, travel costs etc themselves. The results are obvious: London Spitfire could not field a UK team and relied upon a team of Koreans because there were not enough talented British players in the Overwatch scene.

This means that talent is not being replenished. Something that could be easily solved if there was actual incentives to invest in young players and their training. By tokenizing players, Slips gives more than just team owners a stake in the careers of promising prospects.

Players are not connecting with fans emotionally and leaving money on the table

Even if you are not a fan of basketball, you will have heard of Michael Jordan. You might not know that Christiano Ronaldo plays for Juventus FC now but you most certainly know who the Portuguese soccer superstar is. NBC and ESPN know that people watch stars, not sports.

The stars of traditional sports have crossed over into the mainstream and their popularity helps them capitalize on a world of opportunities such as endorsments, ads and lending their name to product lines. Despite the massive popularity of Esports and record viewer engagement, no Esports superstar has been found hawking laundry detergent or razors!

Part of that is because sitting at a computer screen doesn't allow them to guesticulate and emote. So they do not get the viewer's heart pumping in the way a footballer or a tennis player can. The other part is the way that Esports broadcasts are presented in the first place.

Whilst most of Slips can be boiled down to code written to make life fairer and more rewarding, we also realize we need a stylized presentation that sets us apart from other events. We hope others (with deeper pockets) will take our lead on this and we will soon have our first mainstream esports superstar. If it's a player utilizing Slips technology, you might get a opportunity to invest in the next Ronaldo or Michael Jordan.