Here’s a look at how Dragon is trying to use blockchain technology to shake up a multi-billion dollar market in the world’s largest casino and gaming hub.
Blockchain technology is currently being employed to revolutionize a wide range of industries, from education to travel to entertainment. Many of these industries have remained relatively stagnant for half a century or more in terms of core operational model and the impact of blockchain technology on the fundamentals of said industries cannot be understated.
Of course, through the initial coin offering (ICO) model, individuals who might not have been able to gain exposure to these revolutionary changes under the legacy venture capital (VC) model now have the potential to do just that and this has led to a rush to uncover the top opportunities in the space.
One of these right now is Dragon.
The industry that Dragon is targeting is the gaming industry and, initially, at least, the company is focusing on the sector in Macau. While similar in terms of population to Las Vegas (population in Macau the end of 2016 was 612,000, while this number rises slightly to 640,000 for Las Vegas), the percentage of visitors to Macau that gamble exceeds that of Las Vegas (74% versus 69% respectively) and, perhaps more importantly, gross gaming revenue in Macau outweighs that of Las Vegas by nearly 3:1 ($28 billion versus $11 billion respectively during 2016).
Stats supportive of the above paragraph available here.
Despite these very large numbers, however, there currently exists a large number of inefficiencies and what we might call pain-points under the Macau market’s current operational framework.
It’s one of these pain-points that Dragon is going after right now. Specifically, the costs associated with the large sums of money used in high-stakes gambling in Macau’s junkets.
As per Dragon’s whitepaper (available here):
“A major junket in Macau might be hosting over 100 elite gamers at any one time, often producing a rolling turnover in excess of US$250 million a day.”
Not unexpectedly, the friction-type costs associated with this degree of turnover can be high – 5% for the junkets and between 5-7% for the players when they repatriate their winnings.
So how does Dragon seek to overcome this problem?
It starts with what’s called the DRG token, an ECR20 token that anybody looking to gain exposure to this company can pick up as part of its token sale (ICO).
Any player that wants to take part in junkets affiliated with Dragon in Macau (and given both the cost savings available and the links to the sector that Dragon boasts, its reasonable to conclude that there will be many) needs to buy DGC (Dragon Global Chips), which are the physical chips designed to be used at the casino and junket locations.
The way the DRG tokens and the DGCs fit together is that DGCs can only be bought with DRG, meaning the high-stakes gamers must purchase DRG (and, in turn, exchange it for physical DGC) in order to participate in the junkets.
Once the games are complete, winnings that are paid out to the player can be converted back to DRG, another cryptocurrency or fiat currency.
This presents a situation in which everybody wins.
The junkets are saving money on the fees generally associated with stake capital. The players are saving money when they repatriate their winnings and, importantly, participants in the Dragon ICO are benefiting from the continuous purchase cycle that the system necessitates.
Further, Dragon has a buyback program in place under which a portion of its profits will be used to buy back DRG tokens on the open market and burn them, reducing the overall supply over time and, in turn, increasing price per token of the DRG coin.
The team behind this one is incredibly strong, led by individuals with very close ties to the junkets that this operational framework seeks to overhaul and improve. This not only means that there is very little doubt about the company’s ability to execute on its development strategy but also that there’s a strong chance that Dragon will be able to penetrate the market quickly and easily by leveraging the existing contacts of its management in the space.
Readers can check out the team here.
A total of 360 million DRG will be sold through the ICO, with more than 70% of this already committed to junket partners and early supporters. The public sale will see 35 million DRG issued.
For anyone looking to take part now (and to get a jump on the wider markets) the presale is open for registration here.
Dragon’s whitepaper can be found here.