Smart contracts in Esports

Are smart contracts the answer?

Esports is big. Even people who know nothing about esports know that there’s now hundreds of millions of dollars floating around in esports, whether it be in prize money, sponsorship or viewing figures.

Fortnite beats major sporting events in prize money

Fortnite beats major sporting events in prize money

But alongside this growth- in interest, in viewers, in players, in investment, in fans, in sponsorship, there are growing problems.

“Mo money, mo problems”- Biggie Smalls

Not only are esports competitions themselves large, complicated events involving thousands of entrants, the esports industry lacks the type of regulation and oversight one would expect, given the money and reach involved.

Esports viewers in the United States

Esports viewers in the United States

How can smart contracts help?

Esports is already plagued by tales of unjust (and potentially illegal) contracts; by stories of players and teams not being paid; by countless instances of players being taken advantage of.

A smart contract is a computer code that sets out the basic terms of a contract and is ‘self-enforcing’. It is pre-programmed to ensure that when certain conditions are met, the contract is concluded and the promised performance is rendered. By automating the contractual process smart contracts are designed to provide for a secure and efficient means for parties to transact with one another — Will Deller, Bird & Bird

In esports competitions, using smart contracts would mean that players were guaranteed both to get paid, and to get paid on time. The smart contract would monitor a player’s performance in a competition, then automatically pay out players as they finish, depending on the predetermined value set for their finishing position. This allows for instant realisation of payouts/earnings and transparency of contract terms.

Unpaid esports earnings sparks a law suit

Unpaid esports earnings sparks a law suit

Smart contracts to streamline esports competitions

Smart contracts don’t only mean that esports players get paid. They can also help tournament organisers, who can use smart contracts to get players to agree to competition terms, enter themselves in the competition, pick a match and complete the results table as they go. The competition organiser’s role is therefore simplified; they would just need to secure the competition prize fund on the blockchain that the smart contract is based on, ready to be paid out automatically as per the tournament’s terms.

Smart contracts also allow for organisers with small teams to run various competitions concurrently, minimising the administrative burden- Will Deller, Bird & Bird

Smart contracts- is there anything they can’t do?

They can ensure players get paid, they can streamline tournament organisation, they can reduce administrative and legal costs for the entire esports ecosystem. Properly deployed, it’s hard to see how smart contracts can do anything other than raise the professionalism of esports, and help ensure that some of its biggest issues are solved.

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