BX.BET - THE DECENTRALIZED BETTING EXCHANGE

BX is a blockchain-based betting and prediction market ecosystem, designed to change the way the world bets. With BX, we are creating a decentralized betting exchange without a middleman and centralized structures, that has the ability to

disrupt and redefine the traditional betting industry by offering its users a unique and enhanced experience.

In recent years the online sports betting industry has been characterized by strong growth. Since 2009 the market has doubled in size, and currently has a volume of nearly 60 billion USD. However, despite this prodigious growth, the online gambling industry has experienced decreasing levels of trust and diminished reputation in recent years. Traditional online bookmakers face many problems, including lack of trust, lack of transparency, strict regulations, and high operational costs resulting in high margin odds in favor of the bookmaker, all stemming from their centralized structures. Big centralized companies are in charge of the outcomes, odds, and player funds, which ends up in a lack of transparency and trust as perceived by the end user.

BX will tackle these problems at source, by providing a betting ecosystem that utilizes blockchain technologies, especially smart contracts, to give its users full control over their funds and betting transactions at all times. By decentralizing the betting process, BX allows the players to benefit from full transparency and total freedom in their
betting experience, and neutralizes the aforementioned problems and weaknesses of the current betting industry.

The key paradigm of BX is our belief that betting should not be restricted, and that the control and power of all betting transactions should be given back to the community. On BX, users can take over the role of the bookmaker, create their own markets, place and offer bets with self-determined odds, and even participate in the outcome determination of a market. Ultimately the community decides whether a new market or a bet gets accepted or not. The usage of the bespoke BX token as the key component to enable all betting transactions on BX, together with a strongly community-driven ecosystem, creates a unique and unprecedented betting experience with a strong focus on transparency, fairness and decentralization - without any limitations and restrictions.

The BX ecosystem provides its users the unique opportunity to trade bets in three different types of markets: sports (including esports), prediction markets and financial markets. We use an interactive approach to develop each market type with full attention to their individual characteristics and requirements. Our vision is to create an ecosystem which fully supports each of these vertical markets, and provides a truly unique and engaging experience for all players.

The BX token sale aims to introduce BX to the world in a fair, secure and efficient manner. As an integral part of the ecosystem, BX plans to establish the BX token as the central token within the betting industry. The public token sale is divided into two phases: A pre token sale and a main token sale, creating two opportunities for contributors to participate in the success of the project. Both periods contain substantial bonus offers, depending on the contributed amount in the respective phase.

The BX team is highly experienced in launching and operating traditional online betting offerings and has worked at the C-Level of well-known brands such as Betsson, Betfair or Bwin, as well as highly successful own brands like Mobilebet, Wetten.com and esportsbetting.com. Now, we are ready for the next level and determined to realize the vision of creating a decentralized betting ecosystem that reinvents the betting industry, and offers an unique and unprecedented experience for its users. BX is the future of betting.

The abstract is an introduction to the Whitepaper. Please base your contribution decision on the consideration of the Whitepaper as a whole, and not just the abstract.

The present offering of virtual financial assets does not constitute an offer or solicitation to sell financial instruments in terms of the drafted VFA bills under Maltese law.

PROBLEM OVERVIEW

STATUS QUO

In recent years the online sports betting industry has been characterized by strong growth, and remains a fast-growing and highly-segmented market with millions of players. Since 2009 the online gambling market has doubled in size and currently has a volume of nearly 60 billion USD per year¹. However, despite this prodigious growth, the online gambling industry has experienced decreased levels of trust and reduced reputation in recent years. Online sports betting customers and bookmakers are facing several problems:

TRUST ISSUES

With the current situation in the sports betting market, anyone who wants to place a bet online needs to become a customer at a sportsbook, and transfer funds from their own bank account into the hands of the operator. As a consequence players are completely isolated from their funds, which stay in the central deposit of the bookmaker. This requires a high degree of trust - which is sometimes exploited by the bookmakers, to the detriment of their users. On the other hand, this responsibility results in high procedural and financial expenditures for the bookmakers as well.

The possibility of not getting paid when requesting a withdrawal through an online sportsbook is a real risk that gamblers face. But even without the worst case scenario of not getting paid, the distribution process that sits between the betting and withdrawal is often experienced as a “black box” and major pain point. At all ordinary online betting platforms, players must endure a delay when it comes to cash withdrawal, as it takes several days for their funds to be transferred from the bookmaker to their bank accounts.

LIMITATIONS

Within the current betting landscape, the players are very limited in their freedom of betting. Not only the odds are defined by just one market maker, the bookmaker itself, but also the markets themselves are chosen and created by the bookmaker. The players have no influence on the selection of betting markets available. In addition, through the current constellation of one bookmaker and many players, the betting experience completely loses its social character.

INTERFERENCE OF PROVIDERS

Traditional bookmakers often interfere with the betting activity on their platforms, and thus actively regulate their users‘ betting behavior. They penalize players who win frequently by limiting or even banning them. Furthermore, some traditional online sportsbooks limit the amount that can be withdrawn in a particular period. High-limit players will often need to wait long periods before they eventually get their full payout. This leads to frustration and increasingly diminished trust in the bookmaker.

HIGH OPERATIONAL COSTS RESULTING IN HIGH-MARGIN ODDS

There are a lot of everyday challenges that threaten traditional online sportsbooks with centralized structures: Payment processing, odds determination, sportsbook and risk management, player funds protection and different local regulations are just a few cost-intensive responsibilities bookmakers have to put significant efforts into, just to keep their business running securely and efficiently for both the players and the company itself. This results in a significant cost burden which is reflected in high margin odds in favor of the bookmakers, and thus directly charged to the players, to compensate for the high operational costs.

LACK OF TRANSPARENCY

From a user’s perspective, the odds determination process of most sportsbooks is entirely intransparent. Not only is it difficult to understand which information has led to the specific odds, but it is almost impossible to ascertain whether the resulting odds are fair, or if they are clearly stacked in the favor of the bookmakers - because they do not represent the aggregated opinions of the players. Furthermore, traditional operators provide no information about market sentiments, so there are no insights visible concerning where and how other bettors are positioned for each bet. The whole process thus remains hidden.

All of these problems are a direct result of one simple fact: the current online betting market is highly centralized. Centralized companies are in charge of the markets, the outcomes, the odds, and even the funds of the players. At the same time, these companies are struggling with strict regulations, frozen assets, and high safety requirements.

THE SOLUTION

BX will change the current situation - eradicating all of these issues. With a decentralized blockchain solution, these centralized processes will be replaced by a trustless and distributed ecosystem running on self-executing smart contracts, powered by state-of-the-art blockchain technologies. Players will benefit from full transparency, while gaining total control of their betting experience.

BX - the decentralized Betting eXchange - is a betting ecosystem that fulfills all requirements to act in the best interest of our users, by giving them full control of their actions and funds at all times. The decentralized structure of the BX betting exchange eliminates the possibility of a single point of failure. In combination with the betting exchange model, the BX infrastructure will facilitate a fully transparent and easy-to-use betting experience. We believe that centralized betting models will become quickly outdated, as users begin to fully understand the significant advantages of a decentralized model.

PEER-TO-PEER

On BX every user can place bets without a middleman. Every betting transaction is user against user, no central bookmaker in place. The BX ecosystem is transparent, fair and highly secure.

DECENTRAL

On BX the whole betting process is given back into the hands of the users. All betting transactions run autonomously, securely and transparently on the blockchain and the players remain in full control of their betting actions and funds at times.

FAIR

Without a centralized authority, on BX everyone can become the bookmaker and offer odds. The odds represent solely the probability of occurrence of a specific outcome, resulting from the aggregated opinions of the players.

NO LIMITATION

BX provides its users the unlimited freedom of creating own markets, acting as bookmaker, accepting bets or offering their own odds at any time. There are no restrictions on the type and amount of bets, as the community decides whether a bet or a market gets accepted.

WHY DECENTRALIZE?

BX is convinced that the future will be decentralized. With the continued rise of blockchain technology, it is possible to revolutionize the way the internet is structured today. In recent years, large companies have taken control over huge parts of theinternet.

Most of the things we do online today are controlled by a single company — a middleman who holds all the power. Users have no option but to trust this company to act in their best interests and not just the interest of their own bottom line. We have also seen a similar scenario playing out in the online sports betting industries, when the big players took over and created a centralized betting environment with all its associated negative characteristics.

OUR TARGET MARKET

The potential of our target market clearly indicates enormous growth opportunities for the BX ecosystem. In particular, the combination of sports betting and prediction markets will open up new market opportunities in the future. BX combines the best elements of both worlds, with the goal of creating a novel betting experience for our users.

ONLINE GAMBLING IS WORTH 51.96BN USD

The online gambling industry - which is mainly led by betting, casino, and poker applications - has a market size of around 51.96bn USD in 2018. Almost half of this (47.6%) is generated by the EU markets². While online gambling is legal in most countries in the European Union, many other countries around the world have banned or restricted access to online gambling applications.

The online gambling industry is booming. It is an industry that is in rapid expansion, with annual growth rates of over +10%. The total revenue development of the online gambling market is also positive. On average, revenues grew by +24% in Q4/2017 compared to the previous year.

FIGURE 1. Size of the online gambling from 2009 to 2020 (in billion USD dollars)

As demonstrated in the diagram below, which shows the shares of the online gambling industry worldwide compared by product, the online sports betting market is clearly taking the lead, with a market share of nearly 50 percent, followed by the casino market at around 24 percent.

FIGURE 2. Share of the online gambling market worldwide in 2015, by product

SPORTS BETTING

Betting and sports have been bedfellows for centuries. Online sports betting is the biggest sector of the online gambling industry, and is still characterized by enormous growth. It is a highly-segmented market with potential for significant growth for the coming years. The rise of new technologies opens up new opportunities for the user experience of online betting. New features like inplay betting, cashing-out (selling a bet), mobile betting and multi-bets offer new areas for potential expansion. BX will offer all of those features in an innovative decentralized way (see chapter betting types and features). The quarterly betting revenue benchmarking for Q4/2017 shows the tremendous growth rates that are currently being experienced within the betting industry. On the average, the revenue grew by +44% in Q4/2017.

FIGURE 3. Online sports betting: amount wagered and gross win from 2004 to 2012 (in billion US dollars)

FIGURE 4. Quarterly betting revenue growth benchmarking - Q4/2017 (YoY)

In addition to its huge potential, the industry is becoming increasingly dominated by a few selected players. Large centralized betting companies like Unibet, Betsson, William Hill, bet365, bwin, etc. have gained extensive market share and thereby created an enormous market power-base that is centralized to these few actors.

FIGURE 5. Quarterly betting revenue growth benchmarking - Q4/2015 to Q4/2017

ESPORTS

The esports betting market is the fastest growing segment in the world of betting, without showing any sign of a slowdown. It represents one of the most dynamic verticals within the igaming industry, and the adoption of esports among major online sports bookmakers has been rapid. According to the graph shown below, the amounts wagered on esports bets will grow from 315 million U.S. dollars in 2015 to 23.5 billion in 2020. This represents a growth of +640% over a period of just 5 years and shows the incredible growth potential of this young market segment.

FIGURE 6. eSports betting total amount wagered worldwide in 2015 and 2020

PREDICTION MARKETS

Prediction markets are exchange-traded markets created for the purpose of trading the probability of certain outcomes of events. The market prices indicate the probability of an outcome based on the buy and sell orders of the crowd, similar to how stock prices indicate the value of a company based on the buy and sell orders of the traders. A prediction market contract trades between 0% and 100%. It is a binary option that will expire at the price of 0% or 100%. Based on the wisdom of the crowd, these particular markets are exceptionally accurate in predicting the outcome of events.
While this is still a niche market, the most prominent decentralized prediction market, Augur, had a market cap of more than 1 billion USD (January 2018), an increase of more than 2.000% in 2017³.

FUTURE OPPORTUNITIES

Through the use of blockchain technologies, BX has the ability to disrupt the centralized betting industry, and create a new decentralized betting ecosystem with neither middlemen nor centralized structures. BX will focus on the following three key values:

POWER BACK TO THE USER

BX will allow betting markets to function independently of any middleman, by using the smart contract technology of the Ethereum blockchain. This enables the betting transactions to run autonomously. This, in combination with the creation of a betting exchange, has the positive side effect of making the entire betting experience more social again. By creating the private social bet feature, BX enables private bets as well as public betting markets. In the past, only betting against centralized companies and bookmakers was possible, but with BX, users will also have the opportunity to create
private betting markets for closed groups, such as clubs, offices, organizations, or friends and family. Thus, the user becomes part of a social betting community. Various social interactions enhance the betting experience and convey the feeling of being part of a community, rather than just betting as an individual against a faceless operator. Peer-to-peer bet matching in this way takes betting back to its roots, as a competitive activity between equals rather than an interaction with a monolithic enterprise driven by profit.

DECENTRALIZATION

In contrast to regular betting platforms with centralized structures and middleman-oriented business logic, BX will allow peer-to-peer betting transactions as part of a unique decentralized ecosystem. BX will create all the necessary infrastructure to put the whole betting process and experience directly in the hands of the users. They can create markets, determine outcomes, and place bets, without the need for a middleman in form of a betting operator who doesn’t act purely in the interest of the players. Only the market forces within the community will ultimately decide which markets and bets get accepted.

FAIRNESS

As BX is a betting exchange, the odds are generated solely from the supply and demand of the users (comparable to the functioning of a stock exchange). This will eliminate the non-transparent and unfair odds determination that is common
amongst traditional bookmakers. Within the BX ecosystem, the odds represent the probability of the occurrence of a specific outcome, based on the aggregated opinions of the users. The odds offered therefore represent a realistic and incredibly accurate probability of the outcome of the market.

PRODUCT

”BX IS A DECENTRALIZED BETTING AND PREDICTION MARKET ECOSYSTEM THAT
ALLOWS ITS USERS TO PLACE BETS ON ANY MARKET CREATED BY THE COMMUNITY”

BX is a global peer-to-peer betting exchange, where users can create or join public and private betting markets by using the BX crypto token. With the implementation of the blockchain power of the Ethereum smart contract technology, BX can cut out the middleman and give its users full control over their funds and betting transactions at all times. The BX ecosystem is secure, tamper-proof, trustless and completely transparent.

BX aims to become the leading platform for all decentralized betting and prediction applications. Unlike its centralized competitors, BX counters all the problems and weaknesses of the current betting industry. At the same time, BX can harness smart contract technology to significantly cut transaction and other operational costs, which leads to the low and fair fees which are set solely to keep the ecosystem running.

ROADMAP

Q3 2018 - Token sale is completed. The development of the BX ecosystem proceeds. The BX token is listed on the first exchanges.

Q4 2018 - Release of the private alpha version of BX. This version will be a light version of the BX ecosystem. Starting with the online application, the creation of betting markets, the betting as well as the Oracle functionality is implemented. The Superuser concept is ready to be tested by the community. BX continues to work together intensively with the authorities to ensure that BX is in line with all regulatory requirements and to establish BX as a fully compliant player in the gambling industry. We shall be liaising with our advisors and the relevant regulatory authorities to obtain
any necessary licences if and when required.

Q1 2019 - Release of the public beta version of BX. A new interface to use BX is released with a redesign to present the final and intuitive UI/UX design. The private betting market feature is ready to use, enabling a whole new betting experience. The BX desktop application goes live with the BX wallet included, giving our community a method to store their tokens safely. Market Owner functionality is fully implemented, to ensure liquidity on BX markets from the outset.

Q2 2019 - The native iOS and Android mobile apps of BX go live with full support for all BX applications. Furthermore, the BX developer API is published and ready to use, enabling developers to build customized betting tools and interfaces to use the BX ecosystem. BX fully supports sports, including esports markets, and prediction market functionality.

Q3 2019 - BX rollout with full functionality. In-play betting, multi-betting and bet trading is added. The multi-platform strategy is completed by finishing the webmaster plugins as well as all other applications, creating a unique betting ecosystem.

Q4 2019 - BX adds full integration of all esports markets including twitch livestreams and other gamification features. Furthermore the third vertical market type, the financial markets, will be rolled out and thus complete the betting experience offered on BX.

FUTURE PROSPECTS

BX’s central mission is to enable its users the best betting experience on the market. With the establishment of an decentralized, blockchain based betting exchange, the users will experience a whole new level of betting. As the current version of BX is based on the Ethereum network, it relies on its performance and scalability. Performance is a really important factor and will be a central and crucial point during the development process. If Ethereum implements the promised performance upgrades to its core network as announced, the performance should exceed the high performance expectations and standards of BX.

However, the BX development team has also investigated other possible technical solutions. The creation of a new single-purpose blockchain system which would be exclusively used within the BX network is one such promising scenario. Using a proof-of-stake blockchain in combination with a masternode network could be a good setup to perform all BX betting applications. Furthermore, we shall be benchmarking all other blockchain projects that support smart contracts. There are a lot of very promising projects out there, some of which could be reasonable alternatives to the Ethereum network, such as EOS, NEO and Stellar.

COMPETITIVE ANALYSIS

The vision of BX is to create an entirely decentralized betting infrastructure, so that all of the disadvantages of traditional betting operations are eliminated. This is accomplished by cutting out the middleman and giving the user full control over their payments and betting operations at all times. To implement this vision sustainably, BX will become an omnipresent infrastructure layer with user interfaces at various points of the world wide web on any device. With the multi-application approach, the BX markets are embedded on a wide variety of pages and apps.

BX‘s direct competitors are primarily other decentralized applications that enable a specific kind of betting operation on the blockchain. All of these projects are not yet live and have a different operating focus. While most of these competitors focus on either esports or prediction market applications, BX will be the first of its kind to combine all types of betting events into a single decentralized application. Due to this flexibility, the user has no limits in terms of creating betting markets. Ultimately, the demands of the market will decide whether a market is accepted or not.

In addition, BX will bring the full functionality of a betting exchange to the blockchain. The concept of a betting exchange became widely accepted as Betfair entered the market in 1999 and evolved into one of the biggest players within the betting industry. Nevertheless, the central architecture of traditional exchanges suffers from a lot of problems. These problems can be eliminated through the creation of a decentralized infrastructure that provides the full functionality of a betting exchange with enhanced features. We are convinced that BX will revolutionize the way betting will take place in the future.

Another unique selling proposition of BX is its sophisticated Market Owner concept, which represents a clear incentive to generate constant availability of liquidity in all betting markets. The risk with peer-to-peer betting markets is that due to low interest and low betting volume in certain events, no betting offers are available and no one is willing to continually provide liquidity. With our Market Owner concept, BX can nip this problem in the bud by giving a robust incentive model for the Market Owner to ensure liquidity in every market at all times.

Another feature that sets BX apart from its competitors is the possibility to create private betting markets for an exclusive closed group of players. This gives users a level of freedom they have never experienced before. It allows users to host and organize bet markets among friends, colleagues and other closed groups. In addition to its high customer benefit, this feature opens up a substantial cross-selling potential. The combination of an exchange and the private betting function will attract a multitude of users to the BX platform, and convert them into active bettors.

THE INITIAL TOKEN SALE

With the creation of a betting ecosystem characterized by a high degree of security, trust and fairness, BX aims to rebuild and redefine the bad reputation of the betting industry. An integral part of this ecosystem will be the BX token, which is used as the basis for the decentralized operations of the betting exchange. BX plans to establish the BX token as a central token within the online betting industry. We believe that the community itself plays a crucial role in shaping a fair and decentralized exchange. For this reason, we will give the community the opportunity to participate in its future
growth, right from the start.

The BX token sale is divided into two phases. There will be a pre-token sale, where contributors can participate in the project before the main token sale starts. As an incentive to participate in the BX token sale at an early stage, there will be a particularly high bonus token payout to all pre-contributors. To participate in the pre-token sale, a minimum volume of 300 USD is required. The main token sale will begin shortly after completion of the pre-token sale. The goal of this token sale is to facilitate a fair, secure and efficient token distribution—and to introduce BX to the world.

BX-TOKEN

The BX token is designed to enable the full functionality of BX, which makes it an integral part of the ecosystem. It is tradeable and can be divided into smaller fractions, thus fully serving the complex requirement profile of the BX ecosystem.

The BX token will be the enabler for all BX betting applications. It will be utilized to conduct all transactions inside the BX ecosystem. The token is based on the ERC20 Ethereum token standard, which has become a widely accepted and highly secured token implementation standard.

Among other purposes, the BX token will mainly be used to:

● place bets
● create betting markets
● determine outcomes of a market
● claim rewards and betting profits

TOKEN SALE PROCEDURE

The following chapter outlines the general process of the BX token sale. Prior to the actual start date of the token sale, potential contributors must register on the BX landing page, and accept the terms and conditions to satisfy legal requirements.

As soon as they are registered, participants must fill out the KYC (know-your-customer) form. It is important to confirm that the participant’s private information will be stored safely in line with the new General Data Protection Regulation. This procedure is necessary to ensure that the tokens are not sold to natural or legal persons who are not allowed to participate in the distribution of digital tokens, due to applicable laws and regulations in their country of residence. The BX team reserves the right to exclude people who violate these conditions from the public token sale. After the approval of the KYC procedure, the contributor is approved to participate in the token sale.

As soon as the token sale starts, all registered users who have been approved beforehand can contribute. All contributed funds will be stored in a highly safe and secure account on an array of cold wallets. These wallets will act as the escrow account for the received funds after a successfully completed token sale. Furthermore, the token sale contract will distribute all BX tokens acquired during the main token sale to the provided wallets of the contributors. This will happen shortly after the end of the token sale.

TOKEN DISTRIBUTION

The BX token sale will be available on www.bx.bet

BONUS STRUCTURE

TOKEN DISTRIBUTION

● 60 % of available tokens are available for public distribution
● 10 % of available tokens are escrowed for the team. These funds are locked for 2 years with eight 3-month vesting periods
● 10 % of available tokens are reserved for advisors. These funds will be locked for 6 months
● 5 % of available tokens will be used for bounties and the affiliate program of the token sale
● 15% of available token will be kept as a company reserve

USE OF FUNDS

The funds deriving from the token sale will be used as follows:

● 50 % Development
● 25 % Marketing
● 15 % Operations
● 5 % Legal
● 5 % Miscellaneous

DEVELOPMENT

These funds will cover all development expenses to develop the BX ecosystem in a high-performing, secure and user-friendly manner. It includes the design and implementation of the BX multi-platform strategy, all BX smart contracts, and their cryptographic mechanisms. The BX development team will consistently develop the multi-platform strategy, including the web platform, the desktop application, the native apps, as well as the webmaster plugins and the API. Furthermore, we will use parts of the development funds for all R&D activities to ensure continuous technological advancements and thus maintain competitive advantages.

MARKETING

Through our long-lasting experience in the gaming industry, we know the enormous importance of building a strong brand in an innovative category with excellent and efficient marketing campaigns. So the marketing budget will be used for acquiring new users and reconnecting with existing ones via planning and executing targeted marketing campaigns. This budget will additionally be used to update our community and thus keep our supporters always up-to-date with every new milestone achieved.

OPERATIONS

These funds will be used for the salaries of all BX employees, as well as all costs incurred during operation, like office, traveling and other regular expenses.

LEGAL

These funds will cover all legal expenses associated with the development and release of the BX ecosystem.

MISCELLANEOUS

With the use of these funds we will cover all additional expenses that occur during the development of the BX ecosystem.

TEAM

The BX team has collectively more than 90 years’ diversified experience and brings to the project a holistic grasp of the online business ecosystem. Our team has been working with ventures of all sizes, markets and industries. We live and breathe entrepreneurship, and have been launching and developing new iGaming ventures with exceptional efficiency and an outstanding success rate for years. Our passion, creativity and professional execution skills are the three building blocks underpinning our success. Our tremendous experience in the iGaming industry helps us to understand the needs of the players, and implement solutions to create the ultimate user experience.

ADVISORS

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For more information and joining BX.BET social media today, please follow these resources:

Website: http://www.bx.bet/
Whitepaper: https://bx.bet/static/files/whitepaper.pdf
Telegram: https://t.me/bxbet
Twitter: https://twitter.com/BXBETico
Facebook: https://www.facebook.com/BXBET/
Medium: https://medium.com/bxbet
Youtube: https://www.youtube.com/channel/UCGmpGplemqWL8l2wxOXamOw
ANN thread: https://bitcointalk.org/index.php?topic=4641799.0

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