Good day guys, welcome to another article by Cryptolite. Today we will be doing a review on Funfair, looking at the good point and the bad points, and why I am worried about this project.
What is Funfair?
Funfair is a decentralised gaming technology platform which uses the Ethereum blockchain, smart contracts, and proprietary state channels to deliver casino solutions with games that are fun, fast and fair.
It is not a casino or gambling platform in itself, but it creates the gambling apps, the currency, in fact everything a casino might need to setup a gambling site immediately.
The market is online gambling which is currently worth over 47.1 billion dollars, and increasing, so it’s a very lucrative business.
There are already many online gambling websites, so what’s the advantage of a Funfair over regular casino gambling websites?
There are at least 7 advantages I can identify:
i) Fairness- blockchain and smart contracts run the programs, meaning users can be 100% reassured that the betting system is FAIR and not rigged. If I was a gambler, this alone would sell me to use Funfair.
ii) Control of chips/ tokens—You don’t play with chips that belong to casinos, from the gambling to the profits, all the play money is all from your wallet, so you are in control of your money at any point of time.
iii) Potential inflation of the token. Crypto prices are likely to go up in price over the next few years. So my chip is not just a worthless piece of plastic, it’s an investment that should I choose not to gamble now, might be worth 3 times as much in a few month’s time. Surely that’s attractive to a gambler!
iv) Decentralised server— This means the server can never be hacked! Casino owners will love this! They can sleep in peace without worries of people trying to steal their money.
v) Fast setup-- If a casino wanted to use Funfair, literally within seconds they could set it up. Because the entire infrastructure is already there.
vi) Transaction speeds— Usually online trasactions to get money in and out of online casinos can take minutes. In VIP cases where there are large amounts of money involved, it can even take up to days. FUNFAIR promised transactions within 30secs, so it’s super attractive to both casinos and gamblers.
vii) Cheap processing—this one is for the casino owners. Funfair’s network processing literally costs 10% of any other blockchain casinos.
So for all the above reasons, why wouldn’t you want to use Funfair?
But I’m gonna throw in a spanner in the works here. The above advantages they list, are basically the advantages of using blockchain in gambling. It doesn’t actually say what makes them stand out as a blockchain projects. So the question we now want to try and answer is what makes Funfair unique as a blockchain technology.
To do that let’s take a deeper dive into the white paper to see what we can find.
WHITEPAPER
Their white paper is not good guys. To start with, its only 6 pages long, (normal good whitepapers of other blockchain projects even simple ones are at least 15-20pages long, complex projects can go up to over 60 pages), and out of the 6 pages, 2 pages are the cover and content page. So any substance then is only in the last 4 pages. This is essentially a 4 page whitepaper.
When you look at the details of the project, they talk about RNG (random numbers generation) which is a pretty standard feature of all gambling software, and this thing called Fate Channels.
Fate Channels are a modified type of state channels. Most interactions between blockchains are done within the blockchain. A state channel is an interaction between blockchains that happen outside the blockchain. It can potentially make things faster and cheaper. Lightning network for Bitcoin was the first state channel attempt. Fate channels which is what Funfair uses, is like a state channel with modifications, the biggest being they throw in random number generation in that interaction between the two parties, because it’s essentially a gambling interaction. The rest of their whitepaper is all about “Fate channels” and they nothing else. There’s no vision, background, market strategy, token utility nothing. .
Funfair’s whitepaper doesn’t look like a whitepaper of a major project, it only looks like a description of a Fate Channels which is in their own words “simple”.
Alright, look, whitepaper is not everything, they are the first major project in the gambling/ blockchain space, so maybe an early share of the market is probably they are banking on to earn money, not their technology.
Let’s Test out their showcase
Ok so they have quit a few games ready to go. The graphics are clean, its load well and the game is smooth. The interface is abit bare.
Let me show you what I mean. If you google “online gambling blackjack” a lot of the sites have a dealer that adds a personal touch, or at least hands on the table. There might be other minor elements like dealer’s chips, and the tables are usually a bright color with some contrasting element e.g. a logo etc.. to make the overall picture more vibrant and lively.
Funfair’s interface by comparison is somewhat old and bare. No contrast, no interaction elements e.g. a dealer etc.. so I think it can be improved. But in terms of running smoothly, it does that and the actual individual graphics e.g. the fun chip is decent.
Alright, let’s look at the people involved.
This is the team,
It’s led by this guy Jez San and there’s a little spill by him. He has been in the gaming industry for more than two decades, and was awarded the OBE for services to the computer games industry.
And there are other members of the team with their faces and names. Faces are always nice to see on a website. There isn’t the usual short spill of each person though, you know, like where they graduated from, their previous exp etc.. Hmm… abit more transparency would be nice.
But here is my next big concern with this company. There is no partners or investors or advisors. You go on other big blockchain project websites, there are always partners and advisors and they play and important role in any project. There are 2 good reasons why we need investors, partners and advisors.
i) Accountability. If a company has reputable partners, you know they won’t fold overnight and run away with your money. Now I’m not talking about scam intent, I don’t think this project is a scam. But what I’m talking about is tough times, at the moment, Funfair is at the top of its game, there isn’t much competition, things are going well. But what if a major competitor came along next month, and really threatened the project, what’s stopping the owners from just folding the company and making off with the money? Partnerships and investors help to prevent this by providing accountability.
ii) The second reason for advisors and investors is they serve as a safety net. If a company hits a tough time and needs some bailing out, either monetary or technologically, if they have advisors or investors, it provides some back-up, some resilience to adversity. But if you stand by yourself with no advisors or partners, when shit hits the fan, there’s no safety net to catch you and the fall can be very fast and very hard.
So I’m a bit concerned that there isn’t any partners or investors or advisors listed on this website. This is not normal guys.
FunFair vs Edgeless
With an industry as big as online gambling, you would image there would be competition for FunFair out there. And you would be right. If Funfair’s biggest advantage currently is early market share, then it’s worth checking out how they compare to the competition out there. Funfair’s biggest competitor currently is Edgeless so we’re gonna have a look and to them.
The main difference between Funfair and Edgeless is that Funfair provides the technology to casinos and has a widescope use, but Edgeless is the casino and you actually sign-up and play on their website.
Both are blockchain driven, so gamblers can be assured there is no rigging and both have negative house rules for deposits making it easy to deposit and withdraw within seconds. So again standard blockchain project advantages. Neither stand out.
They both also have a working product, although Funfair is a fair bit ahead in development in this area. Lets take a look at Edgeless game.
Ok, Edgeless interface currently is really bad. It’s clearly a work in progress. On google images, there is a picture of their beta,
and its much better, but still somewhat comparable to Funfair, not better. And that’s only blackjack, their other games are not that developed yet. So Funfair is clearly far in the lead in development.
Now one thing to mention here that Edgeless may have the edge is about anonymity. Owning either tokens is anonymous because it’s blockchain. Edgeless runs their own website/ server, so you know your details are kept on the blockchain and more resistant to hacking. Funfair though, only provides the technology to casinos, so when we play using Fun tokens, we are subject to the casino’s rules not Funfairs. So if the casino wants our ID, we have no choice but to provide our identity on their server which is not blockchain and we have no control over how the casino uses our ID information or what happens if the casino’s server gets hack. Now some people argue that not many Casinos use KYC verification (know your client). True, but they don’t need to, because they have your credit card details so they still get your details at the end of the day. What I am trying to say is there is an additional loophole in Funfair’s operation that could make the security and anonymity of the gambler potentially more compromised.
Edgeless is not perfect too, but it’s a bit more protected as a solo blockchain project. In fact, in this area, if another company came up with a project using an anonymous currency like Monero, that would then be really anonymous and potentially very attractive to gamblers. So whilst there isn’t much competition in this space for now, for a decent competitor to come in this field, its not that hard and it can happen very quickly.
But for now, I think it’s clear that Funfair is in the lead. It hasn’t captured a significant part of the market yet, but it’s a race against time for them to do so before a strong competitor appears.
ROADMAP
Let’s look at the roadmap. Scarce. Maybe even scary. The most scary thing is that its pretty much ended. It doesn’t go beyong Q1 2018. Official public release has already happened. The only development left on their roadmap is a progressive slot game, and they already have 4 types of slot games, so its not a major milestone.
Look guys, I’ve never said anything majorly bad about any of the coins we’ve reviewed so far, between their skimpy white paper the absence of partners, advisors or investors, this roadmap which has basically ended and no major technology which makes them irreplaceable. This project really worries me.
Other considerations I have:
Do all casinos using Funfair have the same games and interface? Or can Casinos build their own interface, even games? Cos it’ll be pretty boring if all the games are the same.
Privacy I already mentioned, I think a more anonymous token like Monero would much more attractive. So something investors can take into consideration.
Speed is the next thing. Funfair is on ethereum which is the biggest but the second slowest platform around. And I’m going through stuff you guys already know, Ether’s speed is 16trx/ sec, Neo the third biggest platform currently is 1000trx/ sec. So if someone came along and did a similar project on NEO, does that mean their transaction speeds are then > 60x faster? Cos if I’m a casino owner and I have choose, the choice is obvious.
Last consideration is token distribution. Their max token supply is 11 billion tokens, at the moment, only 4.6 billion are in the market. I found this description by the team from quite a while back, let me read it to you.
“We’re allocating 42% of the 11.173B tokens (4.7B) that we’re putting into cold storage and will restrict token sales to a max of 1B per year for four years, and an additional 0.7B tokens for the fifth and final year. These tokens will be sold to institutions or large token buyers to minimise overheads and retain highest compliance, via OTC and market trading. The tokens will be sold as close to market price as possible, to minimise dilution and maximise value.”
Potential problems with this is the big token sales per years will be sold to instituitions or large token buyers. But this can be done off the market, which means it won’t affect market pricing much, in fact, it can do the opposite and dampen price rise because it reduces available volume on the exchanges.
The second things is the handling of the tokens to “minimise dilution and maximise value” is very broad and again means that everything is up to the team, there is real clarity about how they plan to do that. It would be nice to get some actual details of the plans rather than just the broad intent to minimise dilution and maximise value. Also as of now, about 60% of the tokens are still in the team’s hands which is a lot. Usually about 65% or more would have been released to the market by now. Again, no accountability and if they were to close down tomorrow, nothing is stopping them from taking that >60% token share of the market. I am not saying they will do that, but there is nothing to stop them from doing so if they wanted to.
Usually we end with a price prediction, but we won’t or rather we can’t. To predict something you have to be able to make an intelligent guess as to which direction it will go. In this case, though, the price prediction is pointless, because the future of the project is unpredictable. Anything can happen next. I could give you a positive prediction but then a strong competitor could be announced tomorrow and the company could close down next month and I wouldn’t be surprised, or they might get 10x gains in the next year because no competition appeared and I also wouldn’t be surprised. There is no way anyone can predict with good certainty whether this coin is going to go up or down in any timeframe. My only speculation is, because it is such a lucrative industry it is only a matter of time before serious competition enters the market, and whether Funfair survives will depend on how much of the market share it has claimed as it’s own by then. If it hasn’t gotten sufficient market share by then, the fall could be potentially fast and brutal because it has no safety net that to catch it.
Personally, I won’t be getting on board this project. Let me explain why I’m not keen on this project personally, and then let me explain to you why you don’t need to listen to me.
- I think the difference between gambling and investing when it comes to crypto trading. Investing is understanding the project and having confidence in its future and the team. Gambling is following the FOMO without really understanding the nitty gritty of the project. Here at Cryptolite, we try to do our homework so that we can invest not gamble. I don’t like this project because that there are no partners or investors or advisors to keep them around or help them in times or trouble, that there is no novel “difficult to achieve” technology that guarantees they will be a major player in the long term, there are a lot of avenues for serious competition to come in quickly, there is no roadmap to tell me what to look forward to and the company holds more than 60% of the tokens currently with no accountability. I don’t have enough information about the majority of the members of the team or clarity about their long term plans for the bulk of the tokens. So all of the above considerations makes Funfair scary investment for me.
Investing in cryptocurrency is always high risk, but this coin is much higher risk than most in my opinion. There are many other good projects on the blockchain and I’m gonna stick with the other coins for now.
-Now let me tell you why you don’t need to listen to me.
Crypto investors are not always well-educated about their choices. At the moment alot of the investments on the cryptomarket is driven by hype and FOMO (fear of missing out). The PR and advertising of this project is very good, and do have hype of the market. A lot of people will understand them enough to understand the benefits they bring to the online gambling arena as a blockchain project, look at the top resumes and jump on with the FOMO. They will miss the fact that this project has nothing to distinguish or protect them in the long term from other similar blockchain projects, but nonetheless because there is FOMO, the price will likely rise in the near future.
Funfair is without a doubt ahead of the pack in the gambling blockchain arena at the moment. So in the near future at least, they will probably hold the largest marketcap in these gambling/ blockchain projects and rise in value, provided they don’t fold. So end of the day, money is money, quick money is still money and some might decide to risk in this project for the above reason.
Anything can happen in the future. Who knows, Funfair might be able to majorly capitalise on their time lead or develop a new technology that makes them super big forever and prove me wrong. I am not a professional, nor a financial advisor, all the above is just my personal very noob opinion. I could be wrong and for the sake of those who are already invested in this, I honestly hope I am wrong. But please do your own research and make your own decisions, so whatever happens you won’t have any regrets in future because you can look back and tell yourself that at this point in time you did you could to make the wisest decision possible.
So that’s it guys, that’s my opinion of FUNFAIR. I hope thats alright, and no one is hunting me down to stone me, this is my first review where I give a negative review on a coin. Doesn’t feel good really, I prefer to be positive if I can. But I really wanted to give you my best, impartial and most detailed opinion, that’s what you subscribe to us for. And that’s what you deserve as our community. And we do an impartial review for every coin we review. So I hope you’re not offended if you’re a Funfair supporter, I do wish you and the coin all the best, I honestly do.
Not sure if now’s a good time to ask for a follow. But if you liked this video and found it helpful, do follow us and leave us a comment, tell us if you agree or disagree, or if there’s any coins or topics that you would like us to cover. If we can do it, we will, because this channel is made just for you.
Big thanks to all those who have recommended coins for us to review, I myself have picked up some great coins like SophiaTX from your recommendation, and that’s what we want this blog to be. A place we can all share our good coins so that the whole community can be aware and consider it for our own individual crypto journey. And along the way, Il try do some homework and present abit more information if I can so we can grow together in our knowledge as a community. In future, we might setup a telegram chat group if we grow big enough, but for now, we are kinda small still and stuck on steemit, so please feel free to spam the comments guys. We love it. :D
Alright! Enough talking, have yourself a great day, we will catch you guys tomorrow!
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We are not professionals and this is not financial advice, just us sharing our thoughts with you. Always do your own research and make your own decisions.
agree!!
Thanks for enlightening us.. This is really nice
Fine investigative work. I own a little, so I hope it works out.
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TrufflePigWhile I enjoyed the first couple minutes of the video where you describe the project in simple and easy to understand, I disagree with the rest of your unchecked investigation. Honestly it made me question your motives.
WHITE PAPER: There are two types of white papers on the site. The COMMERCIAL and the TECHNICAL. The Commercial has 23 pages and goes in much details. However you only chose to talk about the technical. Why? I don't know. Which is why I am questioning your motive.
TEAM: You are completely wrong about this and does point out the fact that you really have not looked much into this project. At the time when you made the video they may not had direct link to individual's linkedin accounts, but if you even bothered to google one of them you will see their profile. Most of the employees are well experienced in their field. One of them was a project manager of PKR, which was a very successful online poker site founded by Jez San and later was bought by Poker Star.
SPEED: You contradict yourself on this one. Fate channel solves the transaction speed problem and Jez actually explains the process in details in the Commercial white paper and here https://funfair.io/state-channels-in-disguise/
INVESTORS: Again, you are completely wrong. There are investors such as Pantera Captial, KR1, and BlockTower Capital. Personally I wouldn't be surprised if there are no investors in this new volatile market, but the fact stands. There are investors. You just didn't bother to look it up or just outright ignored that.
This project is unique and has a huge potential. The are many challenges the team is constantly working to resolve such as regulations, price fluctuation of the token, and easy and fast access to acquire the tokens legally without having to go to sites like coinbase and binance...
I actually followed some of interviews Jez had a while back and he has a big vision for the game industry using block-chain tech.
For those commenting here saying good investigation, please don't let others do your homework for you.
I agree... Very poorly researched article.