What links dApps to the Blockchain is a strong interconnectedness. dApps leverage Blockchain platforms and their distributed network, but at the same time a truly decentralized Blockchain project can only be based on a dApp.
Traditional app developers in order to be able to offer optimized products and succeed in promoting them have to pay high fees to marketplaces such as Google Play Store or Apple Store. The payment system is also facilitated and easily integrated into the apps in the aforementioned centralized marketplaces. However, the crypto economy has begun to disrupt this paradigm: dApps leverage the native Blockchain system for asset transfer, this allows them to be able to integrate payments without having to depend on any marketplace.
Another advantage offered by dApps is the ability to access the platform by linking to one’s digital asset wallet: this means fewer credentials to remember and less data to transfer to register. Finally, all data is distributed among the various nodes of the Blockchain and does not reside in a specific server, making it almost impervious to cyber attacks and data fraud. The parent platform of dApps was Ethereum‘s, through the use of the Ethereum Virtual Machine (EVM), the first to enable the use of Smart Contracts.

The benefits of decentralization

The decentralization on which dApps are founded gives rise to advantages that until yesterday were unthinkable on traditional apps. Everything that takes place within dApps is governed by Smart Contracts and there is no authority that can succeed in changing what has taken place within them. This is due to the property of immutability inherent in Blockchain technology. Assets that are purchased on a dApp can easily be moved to its connected wallet or to another wallet that supports the tokens on the dApp and, through the wallets, to another platform.
This was impractical on centralized dApps.
Interoperability amongst different platforms can only be guaranteed by the Blockchain, many of the future initiatives will be based on this principle and will be one of the main reasons to lean toward implementing a project using this technology. The user who purchases an asset on a dApp will be able to have knowledge of the meaning of digital ownership.

Early uses of decentralized apps

As we know Blockchain has its roots in the financial market. The first dApps were developed to give rise to the so-called DEX i.e. Decentralized Exchanges. Even today, the largest volumes of dApps, in terms of economics and number of users, are registered on decentralized exchanges. Among the most famous are Uniswap, which through a mathematical formula linked to a Smart Contract gives birth to an Automated Market Maker (AMM), whose primary task is to set the price of assets in real time through oracles. DEXs are widely used mainly for two reasons: first, to avoid the KYC (Know Your Customer) procedure that requires sensitive user data, now mandatory for centralized exchanges (CEXs) such as Binance or Coinbase; second, to have access to financial products restricted by CEXs in some countries, such as derivatives in Italy.

dApps and sports: in which segment will they be able to be used?

As mentioned before, dApps first found application in Decentralized Finance (DeFi) platforms. The scope of sports betting does not differ much from decentralized finance: it is possible to bet on one of the teams to win, as if they were two assets with two different Liquidity Pools (LPs). An oracle activates the call function of the Smart Contract based on the final result determines the winning team, based on the stake invested on the winning team the profits paid from the liquidity pool of the losing team or player will be distributed.
One of the most interesting projects, representing a hybrid of DeFi and Sport Betting, is that of ScoutX, a platform based on Polygon’s blockchain. To date, it is possible to bet and earn by predicting the future earnings of tennis players, again the operation will be governed by an Automated Market Maker activated by an oracle, as is the case with decentralized exchanges. The project to date is limited to tennis but is set to reach many other sports by 2022. This new frontier of Sports Betting proposes a reimagining of the platform with the role of the counter setting the odds for the matches in the schedule. With the use of dApps, the platform acts only as an intermediary, creating a Peer-to-peer link and earning from the commissions generated from the trades made.

dApp, universal or limited use?

dApps represent the technological substrate that enables the full functionality and exploitation of the features that are made available by Blockchain technology. However, the use of dApps cannot universally replace that of centralized apps. In cases where the identity of a user needs to be verified, the data will need to be stored in a centralized database that can be accessed by a central authority.
Everything executed on dApps is processed through transaction approval; a large number of transactions can end up congesting the network by slowing down the execution of operations on the dApp. Another limitation of dApps may be the difficulty of offering the same quality standards for user experience that are offered by traditional centralized apps. For some users, who have no other experience in the Blockchain world, it may be difficult to configure the various tools they may need to securely interact with the Blockchain.

Thus, dApps also have limitations and disadvantages: one must be aware of how they work to be able to define when their use is useful and when it is a limitation. Certainly they can be useful platforms for easily integrating Smart Contracts that enable all the various transactions. In addition, it will be possible to avoid give one’s data if the activity performed does not make it necessary, opting for a dApp rather than a centralized app.

Sources:

• https://ethereum.org/it/developers/docs/dapps/
• https://medium.com/visionary-hub/building-a-sport-betting-dapp-d5f1048ba524

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NFT Ticketing: the first applications

This use of blockchain and non-fungible tokens does not enjoy the same popularity as Fan Engagement tools, yet its application has already been successfully tested at the highest level.
UEFA first tested this technology at the Europa League final in Gdansk. Subsequently, ticketing on NFT was also used at the Champions League final in Porto.
Relying on non-fungible tokens made capacity management more agile and secure, checkered audience arrangement in compliance with anti-Covid regulations, speed and automation of refunds, and resale of refunded tickets due to the designation of a new venue.
Head of Revenue Operations Philippe Margraff said, “The two finals were handled excellently and demonstrated to us the effectiveness of blockchain-based mobile ticketing.” For this very reason, UEFA announced after a few days its intention to sell one million tickets at Euro2020 with the help of this new technology.

Tickets in NFT format: speed and process automation

Reading between the lines, it can be seen that the use of NFTs for ticketing has brought significant benefits in terms of speeding up and automating processes, all made possible by the Smart Contracts on which NFTs are based.
In fact, with smart contracts, reimbursements upon the occurrence of certain conditions-such as a change of location, a Covid positive or a forced quarantine-become automatic and fast.
Similarly, it is possible to easily transfer one’s ticket to another user.
Another advantage given by the use of NFTs in ticketing is being able to adapt very quickly to sudden changes in regulations caused by the progression or vice versa of the pandemic.
Once the know-how for designing and distributing NFTs is acquired, the creation time is also very rapid. Each ticket in NFT format can be ready for sale in less than a minute.
Distribution is also automated; the moment the ticket price is paid, the Smart Contract validates the sale of the NFT and delivers it to the chosen address.

Ticket on NFT: certified authenticity

Registering a ticket on blockchain is equivalent to guaranteeing its authenticity. In fact, each NFT has a specific digital authenticity certificate. The large-scale use of tickets on NFTs would put an end to the phenomenon of scalping or the phenomenon of selling fake tickets even online, and would also limit the so-called scalping 2.0, that is, the wild secondary selling practiced online by some brokerage companies.
We have not infrequently witnessed events that sold out within minutes only to see how large spaces turned out to be unoccupied. This happens because the markup applied in secondary selling, thanks to the artifactual scarcity of the asset, allows them to make a large profit even if not all the tickets are resold. Some companies have already been fined for these unfair practices. This situation certainly causes impatience in fans who buy at much higher prices or are excluded from the event they have been waiting for. What certainly comes out of it is loyalty. In addition, fans would be able to keep that ticket whose authenticity and uniqueness turn out to be certified in blockchain, without the risk of losing it … and who knows, this might become a collector’s item

Perpetual revenues

An additional opportunity arises for sports clubs: create a dedicated fan space for resale of tickets at a locked-in price and perhaps a commission to be charged on each resale. This kind of initiative would succeed in offering an alternative that would shield fans from speculative maneuvering. In addition, companies could leverage NFTs’ Smart Contracts to generate perpetual revenues. Should the ticket cover an iconic event, any resale made even in markets outside of corporate markets would bring royalties into the companies’ coffers.

In the next article of this blog, we will look at other aspects of ticketing in NFTs, including the benefits related to traceability (e.g., in terms of safety of sports venues), and cost reduction for adopters.

In the next article of this blog, we will look at other aspects of ticketing in NFTs, including the benefits related to traceability (e.g., in terms of safety of sports venues), and cost reduction for adopters.

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The blockchain to identify the best opportunities

First, these innovative technologies can be leveraged to identify, by both clubs and sponsors, the most cost-effective contracts for each form of business, in terms of affinity and economic value.

Large sports clubs can make the most of smart contracts. The advantage of not having to manage and control the correct performance of the clauses preparatory to the termination of the contract (thanks to the blockchain), translates into a huge saving of time and expense.
The stipulated sponsorships can be much more detailed also from a geographical point of view: hyperlocalising the investments, from an economic point of view, is considerably more advantageous.
Speeding up processes and reducing costs are the first two steps towards the future of sponsorship, and the resulting benefits could also benefit the individual athletes they are aimed at.

Smart Contracts and sponsorships of the future

The first key step in establishing a contract, entered into a distributed registry, is to find the most appropriate sponsorship format. Clubs and sponsors identify the partner that best meets their business needs from a database. Once the eligible parties have been identified, the negotiation phase begins, in which the key conditions for the parties to sign the agreement are established. Only once these conditions are determined, the contract will be registered on blockchain and will acquire legal validity. Sponsors, in this way, can identify the most suitable clubs in a timely, selective and cost-effective manner. The same applies to clubs.

Another advantage is found in the possibility to establish a priori thresholds of expectation: for example, the definition of a minimum turnout of participants at the event below which the sponsorship is considered ineffective. If the assumptions set out in the contract are not met, the next stage of the contract will not take place. For example, if attendance at an event does not meet the established criteria, the sponsor may pay a proportionately reduced payment. Conversely, in the optimistic event that the thresholds are abundantly exceeded, clubs can receive increased rewards. It is up to the blockchain to transparently monitor the successful outcome of negotiations.

Blockchain for athletes and clubs, culture and entertainment

Today, contracting through distributed platforms and smart contracts is primarily leveraged by clubs and businesses.
In the not too distant future, however, the model could be extended to individual athletes as well as those in the arts and culture sector. Artists, journalists and those who benefit from copyright, through smart contracts, can sell their products avoiding labels and therefore interacting directly with their audience.

Small sports clubs, which are struggling in the traditional sponsorship market, may find interesting new opportunities through blockchain. For example, the technology can help local sports by facilitating the selection of local businesses for clubs in the same geographic area. In this way, profits would grow for “smaller” realities that can take advantage of the investments of local businesses.

Another area of application is advertising space on the sidelines at sporting events. These, often, remain unsold due to the very long time required for the negotiation and conclusion of agreements, as well as due to the high costs of the long chain of intermediaries. Failure to sell space translates into a substantial economic loss. Through blockchain technologies the time of negotiations can be shortened considerably, and up to a few hours before the event it becomes possible to sell advertising space. And through the elimination of third-party figures, costs can be significantly reduced, while increasing the transparency and security of the partnership.

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The advantages of Smart Contract

The main advantages of Smart Contract are:

– independence from intermediaries
– immutability of the code
– economic saving
– simplification of operations
– great precision and reduction of the margin of error.

How Smart Contract works

The practical operation of the Smart Contract consists in the translation of a traditional contract into a code capable of systematically verifying the existence of certain conditions preparatory to the implementation of other consequent conditions. In other words, only when condition A is met then it is possible to proceed towards the implementation and development of condition B. Smart Contracts, therefore, aim to check and subsequently transcribe, according to the “if/then” logic, the conditions agreed by the contractors and defined by the articles of the contract.

The first phase of drafting is the only one that requires monitoring and IT support. In fact, the translation of the contract into code requires the assistance of an expert who has the necessary technological and legal background. The individual clauses of the contract are signed at the stipulation stage. The self-executing process, at this point, guarantees immutability and thus makes it impossible to revoke the transaction as well as unforeseen, arbitrary changes and modifications after the fact.

The blockchain, in a perspective of synergy between the two technologies, is the ideal technical support for Smart Contracts, as it facilitates the creation of consensus between the parties. Not only that. In the stipulation of traditional contracts, the intervention of an intermediary is always necessary to guarantee and protect the contracting parties. In the case, instead, of smart contracts, the blockchain can be automatically resoloutory, being essential characteristics of its functioning the immutability and the control by all the components of the network, of the data that are inserted each time.

Evaluation and validation: the PoW mechanism

The evaluation and therefore validation of the contract will be the work of the platform users through the PoW (Proof of Work) mechanism. Within the contract the specifics and details can be as many as necessary to meet the needs of all parties. At the basis of the contract there are rules determined by both parties, which govern all exchanges, protecting transactions against any possibility of modification or intervention by external agents. The resolution of any disputes must always be foreseen and predefined at the time of the stipulation, regulating also the procedure for the eventual dissolution of the contract.

The marriage between Smart Contract and blockchain, therefore, can facilitate the initial phase of the negotiation: the protection of the parties is extremely simplified and guaranteed, allowing to consult an intermediary figure only in the phase of translation of the agreement into a string of code. Subsequently, it will be an app that will oversee the proper conduct of the operations required by the code. The app notifies the parties in a timely manner that one or more crucial clauses are fulfilled. The two parties then give their consent to proceed with the next steps.
All the operations take place in an automated way; for this reason they do not require the control of a correct execution by an external super partes controller.

The presence of an IT and legal expert

The critical issues that can be encountered in this contractual methodology lie in the need to use an IT expert. This specialist must be able to correctly transform the agreement into a cryptographic code (the code string), in the initial phase of negotiations.
The appropriate legal preparation of this professional figure is aimed at ensuring that possible divergent interpretations of the articles are avoided in subsequent litigation. For the proper conduct of the various stages of the agreement, any possible hindrance or misunderstanding must be avoided.

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