FunFair was founded by UK entrepreneurs Jez San, Oliver Hopton and Jeremy Longley in early 2013 when they saw the blockchain as a way to create a platform that could solve many of the problems faced by the online gaming industry.
In a nutshell, Funfair is building the underlying infrastructure on the blockchain so anyone, anywhere can create casino games where the player is playing the casino one on one.
Now in the world of online gaming you need to be able to do 3 things really well:
You need to be able to generate truly random numbers
You need to efficiently transfer money between participants
You need to validate that all players are using the same software
Not only do you need to do these things well, but all players need to trust your system.
Its this trust factor that has prevented the online gaming world from even getting close to competing with its offline big brother.
Just as an aside, it’s estimated that the worldwide online gaming market is worth about $50 billion, while offline gaming is around $500 billion. 10 times larger.
But back to trust.
You can see it’s completely understandable that if someone is playing against proprietary software, on the internet, it’s not hard to suspect, especially when you keep losing, that there’s some code buried behind the scenes that’s tipping the odds away from you.
Leveraging the blockchain goes a long way to solving the trust issue as all the transactions are ultimately open for inspection and verification.
However, helpful as this is, using the blockchain then creates two big problems that have plagued previous projects attempting to put gambling on the blockchain.
Speed. Like many blockchain projects, Funfair is built on the Ethereum blockchain. As you know, the chain tends to get congested. It would be a terrible user experience if all players had to wait for a block to be mined to produce the winning number every hand and then again to receive their payment.
Fees. Each time a transaction gets written to the blockchain, there are gas costs. Given the average player’s bet size in online gaming is in the $10 range, gas costs could chew up $1 for every play and end up wiping out a players winnings. And if you’re the casino, these costs could be more than the house edge, so you end up running a loss maker.
Funfair came up with a ingenious solution they call Fate Channels. Basically, a Fate Channel is a State Channel opened for the duration of a gaming session, supporting custom gaming messages between the FunFair client and server. The only transactions on the blockchain occur
at the “beginning” and end of the gaming session.
With this invention, a gaming session that can include hundreds of bets is instant and the costs are an order of magnitude lower. The Funfair team have set themselves a goal for their costs to be 10 X cheaper than anything out there today.
Funfair token is called the FUN. Total supply is 11 Billion. Current circulating supply is 4.6 Billion. 4.4 Billion are being held in cold storage. The remaining 2 Billion are held by the founders in escrow and are being released over an 18 month period that started in September 2017.
The FUN is the fundamental method of interacting with the FunFair smart contracts: players make bets with FUN, game makers and affiliates get paid with FUN and operators will receive profits in FUN.
Fees charged throughout the system will obviously be charged in FUN but for the first two years these FUN fees will get burned creating a deflationary dynamic.
Basically a very robust token eco system that gives lots of reasons to hold the tokens.
In conclusion, Funfair is building out infrastructure that could power a massive online gaming business.
I’d describe their distribution model as a franchise model as its cleverly designed to reward all stakeholders and affiliates.
Funfair seems to be one of the best thought out projects in gaming. That said, its early days and they have a mountain of work to do to achieve their full potential. 2018 and 2019 will be super important years for them to demonstrate consistent progress.