Article produced with input from Joe Looney
Imagine you are watching your favorite ESPN Fantasy Football analyst Matthew Berry discuss his picks for successful players to start in your lineup. You are so enamored by his analysis that you decide to check out his fantasy team online. You see that he is in first place, he has a team you believe to be great, and he is routinely scoring more points than anyone else in the league each week. Below his team name, you see a button that invites you to invest in his team. Matthew owns 100 shares of his fantasy team, and is auctioning off 20 to the highest bidder. Every share represents a percent of his team's future value, proportional to any prizes he earns from doing well in his league. So if you buy all 20, and Matthew Berry wins his league, he would get 80% of the prizes and you would get 20%. At his current performance level, each share is projected to pay a dividend of $35.25 at the end of the season. You decide to click the button, invest in Matthew, and have another team to root for every Sunday, albeit one that does not play on the actual gridiron!
Sound like a far-fetched scenario? Think again. This innovative approach to fantasy sports is not only possible, we are experimenting with it at this very moment right here on the Let's Talk Bitcoin network. We don't have a user experience that is polished enough that you can click on an "invest in me" button, but the rest of the pieces needed to manually create this type of league are available and our league commissioner Joe Looney is leveraging them to implement this fantasy structure. We opted to use the Yahoo Fantasy Football service. For our finances and asset creation, we chose the innovative Counterparty protocol.
At the beginning of our season, our commissioner implemented our league tokens through the creation of our league Counterwallet address. The shares were named in a custom way to represent each of the twelve teams in the league (FFLTEAMA through FFLTEAML). The entry fee to join the league was 15,000 LTBCoin (LTBc), at a current value of $6.67 per owner. With Adam B. Levine's generous sponsorship donation of 50,000 LTBc to the league, our total prize pool came to 230,000 LTBc. For the uninitiated, LTBc is the official LTB network token, which is earned by producing or consuming content on the website and used as currency to buy items such as merchandise and advertising on podcasts. Owners only received their 100 team shares - their privilege to participate in the league - upon sending their dues to the league address.
The use of Counterparty was a no-brainer because it solves, in a decentralized fashion, many problems surrounding both the creation and the provability of assets. However, it does not solve other issues that can often arise within the fantasy sports experience. For instance, have you ever been in a league where an owner drafts four quarterbacks for no good reason and never sets their lineups? I have. Ever been in a league where owners who felt they had no incentive to play just dumped their best players for nothing? I have. Ever been in a league where owners quit because of a trade they didn't approve of, and so forced the commissioner to play as two teams? I have. I suspect many of you have had similar experiences.
Our league, like many other fantasy football leagues, is played with a head-to-head structure. Each week, we compete to score more points than other owners in our league. If we achieve our goal, we earn a win. Over the course of the season, the best records make the playoffs and duel until we have a winner. To achieve maximum participation, and reward good actors in the system during the year until the playoffs, we all agreed on the following structure:
- The highest scoring team each fantasy week (1-14) earns 4,000 LTBc.
- The highest scoring team of the season earns 40,100 LTBc.
- The runner-up earns 15,000 LTBc.
- The winner earns 125,000 LTBc.
Currently, every player in our league still maintains all 100 shares of their team, except for the commissioner, who only kept 1 for fear of a conflict of interest with his duties of running of the league. When an owner earns a prize, a dividend gets issued to their team asset, but not necessarily directly to that owner. For instance, if at the end of the year FFLTEAMD wins the league and they still have 100 of their team shares, they earn 100% of their grand prize. However, if at some point during the season they were to liquidate 10 of their team assets in an auction, they would earn 90% of their prize and 10% would go to the other asset holders.
Let the Auctions Begin!
In the spirit of experimentation, with this article's release, I will be auctioning off 20 shares of my team to the highest bidder(s) in 4 groups of 5 on the LTB auction page. To get a feel for what you should bid if you are interested, let's go through the following thought experiment. Say my team achieves its maximum value for the rest of the fantasy football season. For your investment in my team, you have the potential to earn:
5% of 24,000 LTBc possible for the weekly prizes, or 1,200 LTBc
5% of 40,100 LTBc for the yearly points prize, or 2,005 LTBc
5% of 125,000 LTBc for the winner of the league prize, or 6,250 LTBc
Total for your investment: 9,455 LTBc
I have no idea what the market thinks my team is worth, but let's say I am just as good as Matthew Berry, aforementioned ESPN fantasy guru. The market might come in with a 2,000-4,000 LTBc offer for the 5 shares and more than double the investment, if I return just as well as my thought experiment. Of course, there is risk attached. But there are risks attached with any investment. This is where your research in my team, Ron Mexico, and due diligence, will come into play.
The Possibilities Are Endless
Because I have 100 tokens that represents the future value of my fantasy team, I have options. Compare this to a normal fantasy sports league where I am the sole owner of my team, with no possibility in a provable way for paying out dividends to others. Even if I did offer this option in a traditional fantasy league, others would have to trust that I would actually pay them their dividends. If you have ever been involved in the nastiness that comes about from attempting to get paid legitimately and on time by a fantasy league, you probably know that this is easier said than done. Through auctioning off shares in my team, I have created a chance for myself to earn back approximately the value of my buy-in and have a free roll to try to do the best job I can for the rest of the season. I have also given someone, who knows very little about fantasy sports, the ability to invest in an experienced fantasy sports competitor. They can check out my profile, look at my body of work, and ultimately decide my worth to their investment.
Think of all the possibilities that could exist in a world where your fantasy team is controlled by a publicly viewable asset. Through Adam B. Levine's idea of Token Controlled Viewpoints (TCV), a fantasy league could be set up to only let you make decisions on your team if a query of your bitcoin address upon login indicates you have the majority of the shares that represent your team. In other words, say goodbye to the concept of ever having an owner in a league that never paid his dues on time because he would be locked out of his team. Or, if a league desired privacy, they could add a setting so only people with the assets from that league could access the league page. And this is just with the Counterparty protocol. With others on the horizon, such as Ethereum, self-executing contracts could be created on top of existing assets that would make it possible for a league like ours to have no need for a commissioner. Or, at the very minimum, allow everyone to participate without fear of a bad actor trying to game the system.
Forget fantasy - in a world where these bitcoin protocols are available, all of these ideas are reality!