The European Championship is approaching. Which sports tokens are worth paying attention to in GambleFi?

We are about 30 days away from the European Cup 2024.

Authors: OUROBOROS CAPITAL, 0XRAMEN, MLZE, AERON

Translation: Deep Tide TechFlow

The European Cup 2024 will be held from June to July. Given that the 2020 European Cup (postponed to 2021 due to the pandemic) attracted over 5.2 billion viewers, we believe this will increase attention on sports-related tokens and GambleFi. For RLB, this is a significant revenue event - currently, sports betting accounts for 30-40% of its revenue, and we expect this proportion to exceed half. As for CHZ, we have observed historically strong performance of such sports events in the approximately 20 days leading up to the start. Additionally, we also see the narrative around fan tokens forming, accompanied by the upgrade of the Dragon8 chain (smart contracts + decentralized applications) and partnerships (such as Azuro) serving as additional catalysts.

Rollbit: Increased Revenue from European Cup 2024

Revenue Increase Since the Start of Buyback and Burn: $50 million per month

Since the start of the buyback and burn (the starting point of the data), Rollbit's revenue has been continuously increasing - from approximately $40 million per month in August 2023 to $50 million per month in April 2024. A significant portion of this revenue growth comes from its sports betting business, which accounted for 30-40% of the revenue in April 2024, compared to 15-20% in August 2023.

Source: Rollshare

Buyback Issue

The current revenue level implies a monthly buyback of $5.5 million, resulting in a 33% reduction in RLB circulation annually. This is equivalent to a 3x price-earnings ratio. So far, approximately 47% of RLB's circulation has been bought back. Despite this, the price trend remains weak, showing a 55% underperformance compared to ETH since the beginning of the year.

The combination of large-scale buybacks and a weak price trend makes it easy to understand why the market continues to question the authenticity of the buyback. Given that RLB's primary trading market is within Rollbit itself and lacks transparency, it is difficult to verify whether the buyback is being sold.

Nevertheless, we believe there is a price floor. At the current revenue level, repurchasing all of Rollbit's supply will take just over 3 years. The amount of buyback is a function of revenue and price.

The more RLB is bought back, the stronger its scarcity, the more concentrated the holdings, and the fewer sellers there are. While we are surprised by the number of sellers historically, we believe that with the continued scenario of "low RLB price/high buyback," the pressure on the token holders for increased transparency from the team will continue to grow, which has historically translated into positive price action.

Revenue Boost from European Cup 2024

The global audience for the 2020 European Cup exceeded 5.2 billion. We expect a similar level of activity for the 2024 European Cup, which will drive Rollbit's revenue growth, leading to greater buybacks during the summer (June to July 2024).

Source: Rollshare

Rollbit's revenue fluctuates significantly, with good days bringing in 2-3 times the revenue of poor days. This is mainly driven by sports betting. With matches almost every day, we expect revenue to increase, thereby driving buybacks.

Low Configuration and Attention

GambleFi has always positioned itself relatively low, making it very suitable as a catalyst-driven long-term investment. We believe the European Cup 2024 will serve as such a catalyst, bringing attention and buyback funds to the token.

Chiliz: European Cup 2024 + Chain Upgrade

During the 2022 World Cup in November, CHZ was the only token with a narrative fit, and the profit from longing the token approximately 20 days before the event was close to +80%. We are about 30 days away from the European Cup 2024.

Source: Coingecko, Ouroboros Research

While we believe that Chiliz's narrative drive as part of the European Cup 2024 will attract more attention, it also has other catalysts, including:

Dragon8 Chain Upgrade: Chiliz's Dragon8 chain upgrade will go live on May 21, 2024, introducing the EIP1559 fee burn mechanism and a new token economic model, with an initial inflation rate of 8.8%, expected to decrease to 1.88% after 14 years. In our conversation with Chiliz CEO Alex Dreyfus, we learned that there will be more dApps (decentralized applications) launched on Chiliz 2.0 after the upgrade.
Azuro Partnership: Chiliz announced a partnership with Azuro to jointly sponsor a developer grant program to build an on-chain sports prediction market.

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