Rollbit Project Overview - A Crypto Casino
Disclaimer: Nothing mentioned in this article should be construed as financial, legal, or investment advice. We do not have any affiliation with Rollbit and do not support gambling in any shape or form. Always refer to the rules of your jurisdiction. We do not encourage any form of gambling and are simply viewing and evaluating Rollbit as a business.
When it comes to crypto, both people inside and outside of the space often question - how does one value a crypto project? To be honest, there’s not a straightforward answer for this due to the different nature of the many projects in the space. With that said, there are projects that do generate real revenues and profits, with Rollbit ($RLB) being one of them. Rollbit is a licensed online gambling platform that allows users to wager crypto on the various gambling products that Rollbit offers. Although the platform is an online casino and there are always opposing points of views on casinos, we will try to “remove this stigma” in our analysis of Rollbit.
The Online Gambling Market
The global online gambling market was valued at $USD 63 billion in 2022, and is expected to continue to grow at a CAGR of ~11% till 2030. This translates to a valuation of ~$87 billion for the market in 2030. Bear in mind that this encompasses web2 online casinos that have been in operation for years who have claimed a stake of that market size. Despite this, Rollbit still has a market that it can capture due to its crypto-based approach to an online casino.
Source: Grandview Research
Rollbit Core Casino Products
Live Sports Betting
Rollbit’s sports betting platform provides users with a wide variety of options. This is one of the value propositions - the inclusion of niche sports such as various e-sports, alpine skiing, ski jumping, etc. which helps them capture the niche market for fans of these sports.
So far, the estimated profit earned from Rollbit’s sportsbook is ~$2million (credit @painzy). The maximum profit share % holders can receive is 40% based on the characteristics of the respective Sports Rollbots. There is a total supply of 4,000 Sports Rollbots and the profit share payout to holders happens on a monthly basis. Twitter user @MikeyyCrypto shared their Rollbot earnings since the purchase to indicate ROI of a Sports Rollbot Holder:
https://twitter.com/MikeyyCrypto/status/1660736537808588820
Rollbit and Live Casino Games
Rollbit offers your standard live casino games (roulette, poker, blackjack, slots, etc) and Rollbit Original games. Rollbit original games are also provably fair, users are able to view this under each game’s page.
Diving into the profits earned from their casino, have a look at the calculations compiled by Twitter user @ethimedes below
Based on the calculations, we can see that Rollbit earns ~$4 million a month // $50 million a year in casino profits.
Crypto Futures (up to 1000x leverage)
One of the more unique products that Rollbit offers is a leverage platform where users are able to use up to 1000x leverage on selected coins offered (Btc, Eth, Sol, Bnb, Matic, Doge, and more). This particular product has received a lot of backlash from some of the figures in crypto due to Rollbit’s uneven risk-reward and payout structure for their Futures product. A deeper dive can be found on this Twitter Thread put together by user @btcvix
https://twitter.com/BTCVIX/status/1661849135962632197?s=20
Figure: Rollbit Futures ROI Calculator
The BTC pair on their futures product has the highest 24H volume, coming in at 1 billion. Rollbit takes a % of your profits based on the figure above. The risk-reward payout ration here is highly skewed to benefit Rollbit as you can see from the price move vs profit you can make, so use at your own risk. For simplicity of calculation we will assume they take 0.1% off volume (similar to other CEXs). This would indicate that they generate $1 million per day and ~ $30 million a month. (note that this may undervalue Rollbit’s actual take-home because of the dynamic (and high) fee method for their futures platform.
Putting that aside, the product itself is a unique one as this level of leverage and ‘degeneracy’ is not available anywhere else. Given that the target market of crypto are people with a higher-risk appetite, this product does make a lot of sense from a product market fit perspective; not to mention the simplicity of the interface. Users are also able to use the ROI calculator to explicitly view and self-manage their risk-reward of their trade.
Rollbit Lottery & Jackpot
Note: the total wagered amount in the image only refers to the amount for the current lottery pool.
As of the time of writing, Rollbit has burned a total of 35% of the total supply, which equates to $52 million (based on a $RLB price of $0.03). As the user base continues to grow, we should expect the amount wagered and burned to increase; creating a deflationary flywheel for $RLB. When users stake $RLB for the lottery a 0.2% fee applies; Rollbot V1 holders receive 0.1% as a revenue share, and the other 0.1% is taken for $RLB burn.
The lottery happens every 100th block of Bitcoin mined, and the average reward given out per lottery is ~$16k. On average, we could equate this to $16k in rewards generated every ~16 hours. Users are able to wager their desired amount of $RLB for the lottery; the more you wager the higher the probability of winning it. Rollbit also introduces a social aspect to the lottery, allowing users to form teams to participate in the lottery together to increase the chances of winning.
Additional Products:
Rollbot NFTs
Rollbit has two NFT collections - Rollbot V1 and V2 (Sports Rollbot), and holders of either NFT provide a form of revenue sharing. V1 provides a certain % of rakeback from a user’s casino wagers, a % of the lottery fees distributed amongst holders, and a share of NFT sales on the marketplace. V2 Sports Rollbots are targeted towards the sports betting enthusiasts; it provides monthly free sports bets, betting combo boosters, and a share of up to 40% (depending on characteristics of the NFT and sports) of the Rollbit Sportsbook. By holding the NFTs, you are able to generate a form of monthly passive income and earn based on real user activity, thereby creating a revenue flywheel between platform users and NFT holders. As of the time of writing, the cheapest Rollbot on the marketplace is selling for ~+$700.
Casino Rakeback
Casino rake backs are similar to credit card cash backs in that you receive a % of your wagered bets that can be claimed to be added to your balance. This helps Rollbit keep users engaged - bringing back users for potentially one last bet using their rakeback.
0% Fee NFT Lending
Users are also able to use selected NFTs as collateral for lending at a 0% fee, but are required to pay back the loan within 7 days.
Rollbit User Growth
Rollbit has been in business since 2021, but the platform only recently came into the limelight of Crypto Twitter in early 2023. Since February 2023, Rollbit generated 4+ million visits to their website a month, and this has stayed consistent over the last 3 months.
Source: Similarweb
Looking at Rollbit’s unique depositors, we also see a general uptrend indicating that unique users are still consistently depositing and utilizing the Rollbit platform. Continuous and steady growth will be key for thr platform.
Source: Dune Analytics, @dcfpascal
RLB Tokenomics
Rollbit also has their own $RLB coin on the Solana Network. The total circulating supply (same as max supply) is currently at 3.25 billion coins. Rollbit had no pre-sale or VC investors. Early $RLB holders were airdropped based on their usage of the platform in 2020. At the current price of ~$0.03, Rollbit would have a MC and FDV of ~$120 million. The unique characteristic of the $RLB token is that it has utility, with one being that $RLB serves as a ticket for entry into the Rollbit lottery; the lottery prize is a portion of the casino’s earnings. Additionally, 0.2% of the staked $RLB is taken by Rollbit as a fee, and half of that amount is permanently burned. As of April 2023, 35% of the original $RLB supply has already been burnt.
The deflationary mechanics around $RLB due to the monthly burn and lottery staking constantly reduces supply, hence accruing value for token holders. Not to mention, as Rollbit continues to generate revenue from their casino products, this is constantly being distributed back to $RLB holders who decide to stake and participate in the lottery.
$RLB can be purchased on various Solana DEXs, but they also just rolled out the ability for users to also buy $RLB directly on the Rollbit website - providing users the option to buy without needing to go through a DEX.
Rollbit Roadmap and Future Plans
Rumors have been circulating that Rollbit has plans to go multi-chain, with Ethereum being touted as the next chain the $RLB coin will be available on. The team has also been hinting at possible utility updates for the $RLB coin itself, which will be worth keeping an eye on. A future CEX listing is also part of the team’s long term roadmap, but we don’t anticipate that this will be happening anytime soon.
Risks
Obviously, every project has its own risks which we have to take into account. For Rollbit, a major risk is regulatory risks, especially given the wide array of products Rollbit offers. No one likes it when there’s a new kid on the block eating market share. We are uncertain of how much regulatory issues Rollbit may face as it continues to grow, but do expect bumps along the road, especially when the line of business Rollbit is in does not come across as the most “clean” of industries.
User stickiness is also a risk given the various other web3 casino platforms available on other chains like Ethereum and Arbitrum. The casino with the best PMF and provides the most value to users will likely be the one that gains a market leader position in the coming future.
Final Thoughts
As a project, we believe that Rollbit may potentially be undervalued based on its business and fundamentals. With estimated earnings totaling up to be $40 million a month ($480 million annualized), the project could be viewed as undervalued with its current market cap / fdv of $100 million. As a project that earns ~$40mil per month and is able to distribute a portion of these profits back to $RLB stakers, it creates a mutually beneficial relationship between the user and the Rollbit platform. If Rollbit continues to 1) maintain its user base and 2) grow with increased new unique users, we would expect their revenue and profits to increase as well.
Thank you for reading our Rollbit project analysis, and thank you to the brilliant folks on Twitter who shared their thoughts and calculations. If you enjoyed this piece, be sure to subscribe to our Substack and give our Twitter a follow.