First Blood Token Sale (ICO) - Smith + Crown

First Blood Token Sale (ICO)

First Blood will be a decentralized platform to let eSports players bet on games and challenge each other for cryptocurrency stakes. Smart contracts and oracles will manage payouts.

The First Blood crowdsale is over. It ended in 10 minutes.

The project in a nutshell (and S+C’s rapid reaction):

First Blood is a platform that lets eSports players challenge each other to competitive games and win rewards–that is, players puts up a stake of in-platform tokens, similar to a wager. The system is made possible by smart contracts and decentralized Oracles on the Ethereum blockchain.

Here are some questions that came to mind following our review.

  • The most optimistic way to think about First Blood is as a platform for distributed eSports. The market of players who simply want to bet their own money on game results seems relatively small–or at least, untested. However, the market of aspiring eSports players who want to bet someone else’s money [sponsorship] on game results + the market of people who want to sponsor eSports players seems larger.
  • Much of First Blood’s success will come down to the Witness software, which nodes will run to verify game results. If First Blood takes off as a platform for distributed eSports leagues, the game companies who profit off centralized eSports could see them as competitors. This could result in a cat-and-mouse game as First Blood tries to find maneuver around game company’s attempts to block the software.
  • The value of the First Blood token will partly depend on the fees witness nodes and jury members earn. The fees will fluctuate, but a range hasn’t been announced yet.

What is the project?

First Blood is a platform that lets eSports players challenge each other to competitive games and win rewards–that is, players puts up a stake of in-platform tokens, similar to a wager. The system is made possible by smart contracts and decentralized Oracles on the Ethereum blockchain.
First Blood is not quite a betting platform: people don’t bet on the results of other people’s matches. Presumably, this runs afoul of sports betting laws, which vary by country but at in the United States restrict sports (and esports) gambling to four states. This makes First Blood different from Unikrn and Pinnacle Sports, in which people bet on the outcomes of other people’s games.

Instead, players put up a stake on their own performance–essentially challenging other players for money. Initially, they will stake in 1SŦ tokens through smart contracts that serve as escrow, but in the future, First Blood plans to include other cryptocurrencies. They can also play without staking (although some tokens will be needed to play in the first place).

First Blood uses two functions to combat prevalent problems in sports betting: match fixing and fraud. First, some players can serve as Witness nodes, who verify the results of a match, although they don’t need to actually watch the game, just run witness software that automatically gathers results. Witnesses for a particular match are chosen at random from a pool of possible witnesses, with the chances of selection based on how much 1SŦ s/he has allocated to a special pool (Jury Verification Pool). The system is reminiscent of delegated proof-of-stake consensus. A jury system will adjudicate if there are any disputes in results and ultimately would require human intervention.

The rewards for serving as witness nodes or on a jury will vary based on demand, similar to surge pricing in ride-sharing services like Uber and Lyft.

What is the token being sold?

The token is a FirstBlood App Token (“1SŦ”), which has three major functions (rights):

  • Playing matches–paying rewards and fees, although users will also be able to ETH and later other cryptocurrencies
  • Being eligible to serve as a witness node and jury member (and earn commensurate rewards)
  • Hosting tournaments [to create your own reward systems, though details of this are few and it’s unclear if you can also use ETH for this]

To participate in the Alpha version of the platform, you need 1SŦ, but First Blood will eventually accept ETH and other cryptocurrencies.

Serving as a witness node and a jury member will pay rewards, and the chances of being selected for a particular match or dispute will depend on the total amount of 1ST you have. The fees will be in whatever currency players use to wager.

1SŦ tokens do not provide any in-game benefits or on-platform priorities. The blockchain does not create new 1SŦ tokens: on-platform activities will redistribute them and they will be tradeable on exchanges two months after the sale ends.

What are the terms?

The token pricing is denominated in ETH, although people with other cryptocurrencies can use a third-party conversion service available on the page.

As with many ICOs, there are bonuses based on how early you participate. The first hour of the sale will involve 170 tokens per ETH, while the last seven days will involve 100 tokens per ETH.

The total amount of tokens created will depend on how much ETH is raised. Founders will get an additional 10% of the tokens issued, and the eSports ecosystem will get 5%. They have set a cap of $5.5 million for the ICO, giving a theoretical maximum of approximately 93.5 million tokens.

Who is the team behind the project?

Bios for the team can be found at the end of the whitepaper and cover a wide array of expertises.

Joe Zhou, the Project Lead, has a background in finance and fintech, and previously co-founded Alt-Options. Marco Cuesta, Head of Business Development (and co-founder of Alt-Options) is a certified anti-money laundering specialist. Two developers (Zack Coburn and Anik Danh) have experience in smart contracts and fintech. They also have a legal counsel, Daniel Temkim. Needless to say, all are gamers.

Official Resources

Update: an earlier version suggested there was a moral hazard in First Blood collecting fees off adjudication (when their witness software doesn’t produce a definite result). First Blood clarified that they also will collect a small portion of the fee on all matches, not just adjudication, which minimizes the moral hazard. Presumably, the software will work more often than it won’t.

Smith + Crown does not collect money or bounties for posting these announcements. All of Smith + Crown’s announcements for ICOs should not be construed as investment advice or an endorsement. In addition, some of the information contained above may be changed after we posted this; we urge the reader to read all source material before investing or passing judgment. If you see anything that has become obsolete, let us know.