The popularity of decentralised projects in the gambling niche is growing rapidly. This is influenced by the development of Web3 and the digital economy, as well as the increasing demand among users for transparency and the creation of a global market without borders or licences.
Casino Market experts talk about the features and prospects of launching a DAO casino.
About the Concept
In the entertainment industry, it can be described as a decentralised autonomous organisation. Such tasks as administration, decision-making, and profit distribution are carried out through smart contracts and a vote among token holders. Classic management methods are not applied in this case.
In online casinos, the DAO model allows the owners of digital assets to coordinate the work of the virtual platform:
- speak up for changes in gaming rules or payment procedures;
- choose content providers;
- distribute profits or dividends;
- decide on marketing campaigns or token listing on the exchange.
The work of DAO organisations, like many modern entertainment portals, is based on the blockchain. Distributed ledger technology is responsible for the security of a company and customer data. It also ensures autonomous operation without being tied to banks or other financial institutions.
How a DAO Casino Functions
Such a project is a decentralised ecosystem where all key processes (acceptance of bets, payment of prizes, management, and the accrual of bonuses) occur through smart contracts.
Gambling Platform Architecture
Let us consider what components an entertainment site consists of:
- DAO protocol. With its help, it is possible to solve key tasks: add content or change the rules (payout percentages, token denomination, and in-game currency rate).
- Smart contracts. They automate bids, financial processes, and bonuses. Such solutions are responsible for collecting and distributing income.
- Blockchain-based game engine. It guarantees the honesty and transparency of settlements, ensures the publicity of money transfers, etc. The product is also responsible for compliance with the Provably Fair principle, according to which prizes are automatically credited to the winner's account.
- Casino token. It is used for betting, voting, staking, and profit-making. Popular blockchain assets include $BET, $FUN, and others.
- Player’s budget. The eWallet system provides direct interaction with smart contracts. Opening deposits are debited from accounts, and the funds are credited to them in case of victory. Customers use Web3, Metamask, etc.
How the Gameplay Works
The main steps that clients should take:
- Connection to the platform. Casino visitors log into their crypto wallet (for example, MetaMask or Trust Wallet) and then select a solution (slot machine, cards, roulette, or crash entertainment).
- Choice of a bid. At this point, the funds are not transferred directly to the online resource but are recorded in a smart contract.
- Generation of results. The Provably Fair algorithm is used here. The outcomes of sessions are determined randomly and are recorded in the blockchain. The honesty is verified using cryptographic algorithms.
- Payment of prizes. If a person wins, the rewards are automatically sent back to their wallet. If a user loses, his bet remains in the pool or goes toward the DAO casino's income.
Mechanics of Management
Token holders play a key role in managing the gambling platform. Decisions are made through closed voting in Snapshot, Aragon, Tally, etc. A token is usually equal to 1 vote.
Owners of digital assets participate in:
- addition of new games (bonus systems, tournaments, and other multiplayer activities);
- modification of the site’s commission;
- determination of the percentage of profit;
- conclusion of partnership agreements;
- smart contracts’ code updates.
DAO casino income (for example, 3–12% of all bets) is accumulated in a self-executive computer program. The revenues can then be shared.
The most popular option is staking digital assets. Holders can block them and receive a portion of the profit. Funds can be accrued in cryptocurrency (ETH and BTC), stablecoins (USDT), or online casino tokens.
Common methods of distribution also include:
- Buyback & Burn. Part of the income is spent on buying back or burning virtual assets, thus increasing their value.
- Treasury DAO. A set percentage of revenues is transferred to the treasury for future investments and the development of an entertainment site.
Advantages of the DAO Model in Gambling
Let us consider the key benefits of this management approach:
- Transparency. All processes (acceptance of bets, payments, and accrual of bonuses) occur in the blockchain environment and are verified in real-time. This strengthens the audience’s trust and reduces the likelihood of manipulating odds or using an uncertified RNG. Players can easily check the RTP and the operation of the random number generator.
- Decentralised management. Participants (token holders) make decisions on the development of the platform: which content to buy, what commission to set, etc. The model in which customers manage processes increases their loyalty and involvement.
- Automation of the work. Smart contracts provide instant payments without delays, system failures, or staff participation. Everything is as fast, transparent, and safe as possible. The absence of manual transaction processing reduces personnel costs (administration, accounting), which has a positive effect on the profit of an iGaming site.
- Integration with Web3. DAO casinos can be easily connected to crypto wallets, as well as NFT and DeFi protocols. Entrepreneurs can add incentives in the form of non-fungible bonuses, tokens with pharming, DAO wallets for collective management, and other innovations.
- Profit-sharing. The blockchain system can distribute income between token holders through staking or dividends. Users become investors, not just players, which makes them more interested in the growth of the entertainment platform.
- Flexibility and scalability. The DAO model is not tied to one country. It is possible to launch a project for the global Web3 community and implement new solutions, monetisation strategies, or DeFi mechanics.
- Reduction in the risk of censorship. Casinos that are based on such a model operate in a decentralised manner and without failure points (such as a server or a director). This allows the digital portal to work in jurisdictions with an ambiguous attitude toward gambling from the government.
- A sustainable community. Players can come up with ideas, take part in collective discussions, and set rules. This creates a vivid and self-organising community. Clients do not just place bets and leave. They stay, build, advertise, and develop the website.
How to Implement a DAO System in an Online Casino
The transition of a traditional entertainment resource to this model is a serious step that requires the following technical, legal, and management changes:
- Tokenomics elaboration. It means the creation of a unique digital asset (utility or governance), the determination of their number in the system, as well as the purpose of such coins. Besides, they must be sustainable and beneficial for customers.
- Technical infrastructure development. At this stage, smart contracts for bets and winnings are programmed, income is distributed, and business processes are automated. Universal blockchain solutions (Solidity, Rust) or EVM-compatible networks (Polygon, Arbitrum, and BNB Chain) can be used.
- Building a DAO platform. Engineers need to implement a special interface and add management options. It is also worth considering the functions of delegating votes, presenting proposals, and making decisions on the project.
- Integration of digital platforms for electronic transactions. Connection to the eWallet system simplifies access to crypto assets and eliminates the dependence on financial institutions. The most popular solutions are Metamask, Trust Wallet, etc.
- Activation of the DAO mode. In the first stage, the system manages only a part of the platform (for example, a collection of slots or engagement mechanics). Entrepreneurs continue to control licences, security, support, and legal aspects.
Difficulties in the Operation of Gaming Sites
DAO casinos are innovative and entail no risks. However, such a structure has unique vulnerabilities that cannot be found in traditional establishments.
Let us consider what challenges project owners may face:
- Technical complexities. Most often, these are flaws in smart contracts and attacks on the DAO infrastructure. It is important for operators to conduct regular audits, introduce advanced voting mechanisms, and restrict the rights of new participants.
- Nuances of the law. In most countries, DAO models are not recognised as legal entities, so they are not subject to certification requirements. In this regard, the domain and traffic may be blocked, and sanctions may be imposed on the vendor. To protect iGaming portals, it is important to register them in friendly jurisdictions (such as Curacao, Alderney, or the Isle of Man).
- Financial risks. High volatility and sharp token collapses can disrupt the payout system and lead to a loss of trust. To prevent this from happening, it is essential to form cryptocurrency reserves and link some of the assets to stablecoins (USDT or USDC).
- Management challenges. Reduced activity in the community can lead to a weakening control and low efficiency of the decisions made. Therefore, it is worth implementing motivation programs. These are bonuses for participating in voting, reputation points, and other privileges.
The Main Things about DAO in the Gambling Industry
Such casinos can be described as platforms of a new generation.
Key aspects that entrepreneurs should take into account:
- Decentralised resources cannot replace traditional entertainment locations but will become an excellent alternative for users. The advantages of these solutions include transparency, automation of operations, flexibility, scalability, and the formation of a sustainable community.
- To create a DAO project, it is necessary to elaborate tokenomics, prepare a technical infrastructure, and add electronic wallets. It is worth launching the mode gradually when business owners continue to control security and legal aspects.
You can order such innovative products from the Casino Market studio. We offer crash content, VR and AR games, turnkey websites, comprehensive support, and much more.
Have questions or want to order services?
Contact our consultants:
- e-mail: manager@casino-market.com
- feedback form.
Check the information used to contact us carefully. It is necessary for your safety.
Fraudsters can use contacts that look like ours to scam customers. Therefore, we ask you to enter only the addresses that are indicated on our official website.
Be careful! Our team is not responsible for the activities of persons using similar contact details.
