The esports market is booming, and there are no truly decentralized betting solutions available yet. That is why the founders of Gimli, firm believers in decentralized governance for the Internet of tomorrow, created the company in May. They realized how much they were missing a safe and community-driven way of betting on their favorite Starcraft II players and saw recent evolution in the blockchain creating infinite possibilities in the space.
Gimli’s concept is built on the Ethereum blockchain and centered around allowing esports streamers to provide bets on their streams, deciding what percentage fee to retain on every bet made by their fans. Initially, 100% of the fee will be kept by the streamers to entice people to join the service as it launches. Eventually, Gimli is expected to take a commission.
Certain high-profile streamers have already bought in, including CS:GO player Sean Gares (over 142,000 followers on Twitch) who joined the Misfits team on January 2017 where he has the role of in-game leader with a rifler, professional Starcraft II player Stephano (almost 70,000 followers on Twitch) with victories in both the IGN ProLeague Season 3 and the Electronic Sports World Cup 2011, MrBboy45 (over 1.3 million subscribers on YouTube), Skyyart (over 760,000 subscribers on YouTube) and many others.
It has become extremely fashionable for startups like Gimli to engage in what is considered a “crowdsale,” where tokens are offered to early buyers through Initial Coin Offerings (ICOs). Gimli’s ICO is scheduled to open on September 16 and last for fifteen days or until all tokens have been allocated. Buyers during the initial sale will acquire GIM in exchange for Ether (ETH) and the sale will be administered by an Ethereum Smart Contract. The number of GIM sold during the sale is capped at 90 million, of which 80 million will go to the general public and 10 million are earmarked for esports professionals. Alongside the 90 million GIM, there will be 30 million GIM for the Gimli team and 20 million GIM for Gimli advisors and esports partners, as well as 10 million GIM in the Gimli Reserve Fund, to be sold periodically to new viewers to facilitate adoption. Gimli says no more tokens will ever be created after the initial 150 million and its minimum financing is $4 million (around 13,000 ETH).
Should the Gimli crowdsale end without selling the full 80 million tokens, any remaining tokens allocated to the general public, then those tokens left over will be transferred to Gimli reserve fund and frozen until the platform launch, which is scheduled for Q2 2018.
Gimli is following in the footsteps of another U.S. esports platform Unikrn, which announced its own crowdsale to begin in September as well. Unikrn, is seeking to raise $100 million through the crowdsale, and its CEO Rahul Sood said he is capping the raise at the amount, because “if we don’t, it’s going to go crazy.”
“As opposed to Unikrn, Gimli is a decentralized platform,” explains Gimli co-founder Julien Charrel. “Bets happen on the blockchain, which guarantees that no one can hack the funds in escrow. In addition, Gimli is not a classic bookmaking platform. It provides its betting services to the streamer. The streamer benefits from a cut of the bet, and thus has a vested interest in Gimli. By aligning Gimli’s interests with the streamer’s interest, this creates an extremely powerful customer acquisition model. This is also a really healthy way for the streamer to increase engagement and retention which is one of the key pain points in the community today.”
Part of the strength of Gimli may be in its executives, who have deep roots in the esports streaming community and access to a wide potential user base. Charrel has a double Masters in Finance and Computer Science from Columbia University and has worked closely on esports live streaming at Dailymotion. Another co-founder, David Waugh, graduated with a Masters in Mathematics from the National University of Singapore and formerly worked as an equity derivatives quant in a major New York investment bank. He is a big believer in the simplicity of blockchain technologies and he joined the Gimli Project to build exciting, decentralized open solutions to solve “real-world” problems.
While Gimli is 100% based on the blockchain and labeled as decentralized, the company will retain some vetting power over who can and cannot organize bets, and in some cases block transfers as well as refund tokens if streamers attempt to use Gimli for illegal purposes.
Gimli is incorporated in Malta due to the European country’s very generous regulations regarding betting and gambling. The Maltese Gaming Authority often works with startups, and licensing costs are reasonable (around $30,000). As Gimli’s user base grows to new jurisdictions, the company says that it will obtain all of the necessary licenses and comply with local regulations. The founders have faith that some jurisdictions may consider Gimli skill-based, given the focus on esports, which are generally considered as such based on the inherent skill required to win competitions. Cryptocurrency regulations vary by jurisdiction, and the company will need to remain cognizant of same as it grows.
No U.S. purchasers of Gimli tokens are allowed during the initial sale.
Darren Heitner the Founder of South Florida-based HEITNER LEGAL, P.L.L.C. and Sports Agent Blog. He authored the book, How to Play the Game: What Every Sports Attorney Needs to Know.