There's an NFT on the Ethereum (ETH 3.01%) blockchain that is hoping to upend the online gambling market. On Tuesday the Slotie NFT from Elia Software hit the market, and it could be the first NFT to generate real money from gambling.
As NFTs become more popular and cryptocurrencies and the blockchain grow, NFT projects are becoming more and more innovative. We aren't just talking about a cool piece of art here -- this project is intended to be a long-term investment.
What's a Slotie?
Slotie is the name for a set of 10,000 unique NFTs minted on Tuesday. Sloties cost 0.08 Ethereum for the first 2,500 pre-sale mints, and 0.16 Ethereum for 7,000 public sale mints, or about $5.7 million.
These NFTs are said to provide real-world benefits at 150 casinos around the world and "Exclusive Holders Rewards". The first reward is a Slotie-themed game for crypto casinos, which will pay out a 12% commission to each partner. 80% of that payment goes to Slotie holders. Slotie NFT holders will also get a 20% rakeback at participating casinos, which means they'll get 20% of the casino's take back as a benefit.
The key to the economics of this system is a token that can be transferred to NFT owners on the blockchain.
The WATT token
Slotie is using a token called WATT, which is kind of like a gem you earn in a game depending on how you play and what you own. In this case, WATTs are earned on a daily basis depending on the qualities of a Slotie. Here's how the token is described by Slotie:
WATTs is a token which acts like the energy in the Sloties' world. WATTs are generated on a daily basis. Every Slotie owner gets 10 WATTs tokens daily. You will have enough WATTs to breed your Sloties in 3 months. For those who can't wait to get their Junior Sloties, there's the opportunity to buy tokens from other owners on the secondary market.
What Slotie's developers would like to do is make WATTs valuable by creating uses for them. Breeding, slot events, and potentially other benefits will be available. But the real hope is that WATTs have a monetary value.
WATTs will be paid to Slotie holders, but they will need to then be exchanged into Ethereum or another coin. This will allow Slotie owners to cash out benefits, but a market needs to be created for the token -- and it appears right now that WATT tokens won't be generated by Slotie NFT holders until the first or second quarter of 2022.
One secret of NFTs is that the development team is often paid with an allocation of tokens. Slotie didn't disclose how many WATTs the team will get, but this is often a sizable amount.
The main use for WATTs is what's known as breeding. Breeding takes 1,800 WATTs and 2 Sloties and creates a Junior Slotie. However, there doesn't seem to be any real utility for the Junior Slotie until at least the third quarter of 2022.
Future games and partnerships could be beneficial to Slotie holders, but that's a ways down the roadmap.
Trust is the name of the game
This is one of the first real-world projects I've seen with the backing of a legitimate company with locations around the world. But the Slotie NFT still relies on these developers staying engaged and building value long-term. If casinos don't sign up or WATT doesn't hold value, there will be no value for this NFT outside of the art.
Slotie also ran into huge problems during its mint, with scammers overwhelming the developers and many people missing the mint altogether. It's still unclear on secondary markets which Sloties are the real ones and which are scams, a huge problem with NFTs in their infancy.
As utility NFTs like Slotie hit the market, it will be interesting to watch how they play out. This could be a great way to generate indirect, passive income from an industry like online gambling. But it could end in disaster if buyers lose confidence in the project. And this is an NFT from a company, so it may be difficult to build a passionate following organically.
Time will tell where this NFT goes, but if you're looking for innovation in NFTs, this is one to watch.