Divvy Bet | July 27, 2023
Divvy Bet is an on-chain sports betting platform built on Solana.
Today they are launching their NFT collection (5000 max supply) that will give owners rev share, token emissions via staking, and lootboxes.
This model is following closely in the footsteps of Solcasino, an on-chain casino built on Solana that has seen major success with their rev share NFT collection, with floor prices shooting over 50 SOL in the past few weeks:
While these platforms do not share their revenue numbers publicly, Solcasino has been generating enough revenue to sustain 90% APY in USDC payments on their token staking and a 50+ SOL floor price on their NFT collection.
Divvy Bet does not appear to have much revenue at all yet as browsing their books, there is a very low amount of volume in bets placed on various events.
However, an accessible on-chain sports-betting platform backed by reputable investors could be something that catches on:
Due to the high valuation and success of Solcasino’s NFT collection, we Divvy Bet NFTs may see some positive speculation. The main issue for judging whether or not this will be a profitable investment is the mint structure.
Mint Structure
- This morning from 9am to 2pm EST, Divvy is selling ‘lottery tickets’ for 0.069 SOL ($1.75) each.
- There is not cap on supply. You can buy as many as you’d like.
- Lottery winners will have the option to mint a Divvy NFT for 4.2 SOL (~$100).
- 20% of the money generated from the lottery will be given to 1 lucky lottery winner.
Given the valuation of Solcasino’s NFTs at > $1000, we feel that minting at a $100 mint price is worthwhile, however, the issue is the unpredictability of how many lottery tickets one is likely to have to buy in order to win a mint spot.
Because of this element of uncertainty, this is a high risk play that could result in losing any money put into the lottery. We do think there is a decent chance of it being + EV in the long-run.
Alternatively, you could look to purchase Divvy NFTs on the secondary market after they mint. There is a solid chance the floor price dips below mint price if people see the revenue share is low and are not patient enough to wait for the platform to grow its user-base.
This is considered a high risk play with a multi-month timeframe.
For specific mint details, consult the Divvy Bet official Twitter.
Official Twitter: https://twitter.com/DivvyBet
Update: It appears as though they may have cut the supply to 2500 and the raffle is only for the last 264 NFTs:
Because of this, the raffle is likely negative EV in the short-term, but still may be positive EV assuming a target price of 50 SOL in the long-term.
If we assume the fair market value will eventually be 50 to 100 SOL (bold assumption, but based on the Solcasino comparison) and we’re looking for at least a 5x, we can back into the break-even EV based on the data provided on the page.
Hypothetically, we’d be willing to pay 10 SOL per NFT to achieve a 5x if our price target is eventually 50 SOL.
So accounting for the 4.2 SOL claim price, if we’re willing to buy 84 tickets per NFT (0.069 SOL x 84 = 5.8 SOL), the raffle remains positive EV so long as the amount of tickets sold does not go above 22,176 and our assumptions play out accordingly.
However, it should be noted that you’re much more likely to be able to purchase these on the secondary market post-mint for much less than 10 SOL, and that’s what we believe to be the smarter play.