Understanding Tokenized Rewards in Blockchain Casinos
Blockchain casinos offer tokenized rewards along with others for transparency. Players can trade or use the tokens across different platforms. This, in turn, can create an interconnected ecosystem that benefits casino operators and players alike. But how does it work, and what are the benefits?
How it works
Tokenized rewards work by using Blockchain technology to create and distribute to the players and through casino activities. In ETH gambling platforms, these tokens represent in-game assets. They can take the form of loyalty points or casino chips and work on different platforms.
Players use these tokens when they participate in games, engage in promotional events, or achieve milestones. The difference between these token rewards and traditional reward points is that it is valuable and can be transferred from one player to another. Tokens can also be used on other platforms, giving them real-world value.
The blockchain is immutable and records every transaction at our locations to prevent disputes about rewards. Thus, players in blockchain casinos can rest assured that the loyalty programs are tamper-proof.
Real-world uses of tokenized rewards
Tokenized rewards also include non-fungible tokens or NFTs. When used as tokenized rewards, NFTs provide a unique experience. Several blockchain casinos have begun using NFTs because they encourage fractional ownership, increase liquidity, and enhance monetization. Some casinos are using NFTs as VIP passes. This gives customers a sense of exclusivity, as they can gain access to spaces that only a few members can access.
Besides working as VIP passes, NFTs are also used as rewards for meeting milestones. This token can be used on other platforms or sold. Platforms such as OpenSea allow players to sell their NFT at individual prices. Players can also hold their NFT rewards, hoping they will appreciate in value in the future. How does this work?
NFTs are generated using smart contracts. Since they are generated on the blockchain, it ensures that the record is secure and immutable. Each NFT is unique on the blockchain, and casinos cannot interchange them. This makes them quite valuable for reward programs in blockchain casinos.
In addition to NFTs, gambling platforms have their own tokens designed for them and other crypto casinos. These tokens can be used as a medium of exchange. For instance, you can purchase them with Bitcoin or altcoins and use them to play games. Rewards are also paid out with these tokens, giving them value for the players.
These tokens were developed to work at crypto casinos, and sports betting sites. However, being able to spend the rewards varies from casino to casino. Some may wonder why these tokens are important instead of just using well-known cryptocurrencies like BTC. For one, they offer lower transaction costs compared to traditional cryptocurrencies, like Bitcoin and Ethereum. Also, these tokens make the entire process faster since they do not require third-party interference to be issued or sent out.
Benefits of tokenized rewards
For blockchain casino players, there are lots of benefits when they use the tokenized rewards system. Some include,
Security and transparency
Regular casino rewards are centralized, unlike the blockchain, which is decentralized. The casinos can arbitrarily decide to reduce points or devalue them if they please. They can easily claim a player broke some of their terms and withdraw rewards. Tokenized rewards are different in this regard. They are transparent, safe and sent directly to the player’s wallet immediately after they qualify for them.
Instant crediting
In regular casinos, players may need to wait for verification before they can use their rewards. Some even have to contact the customer support team to get their rewards paid out. With tokenized rewards, this has a different process. The blockchain works with smart contracts that help automate the rewards process. For instance, if a player completes certain milestones, like making a deposit or winning a tournament, the tokens are issued instantly.
Portable rewards
Loyalty points from regular casinos can be used in that casino alone and may be restricted to specific games and offerings. Tokenized rewards are flexible, and players can trade them however they choose. Since they are blockchain tokens, they can use them in the platform and also withdraw them for use in external wallets.
Fraud resistant
Since tokens are issued on the blockchain, they are fraud-resistant meaning that the casino cannot tamper with them. If they are not satisfied with the rewards, players can also check the records for verification. They are also traceable from the very start of the issuing process to redemption.
Anonymity
Most players in crypto casinos prefer its anonymity since you don’t need to share personal information. Rewards offered to players in the form of tokens are also anonymous, and this may come in handy for players who do not want to share their personal information on the platform.
Innovative features
The tokenization of rewards offers some interesting features because of the smart contracts. Players do not only receive rewards they can spend on other crypto platforms, but it goes a step further. Players with these tokens may be able to contribute to the governance of the crypto casino.
Risks associated with reward tokens
Just like every other cryptocurrency, tokens are also subject to volatility. Since they are decentralized, they can experience price fluctuations. This means that the value of your token can change when the market is affected.
Besides this risk of volatility, there are still some upcoming rules and regulations governing cryptocurrencies in various countries. Governments are still at liberty to create laws to regulate cryptocurrency. They could introduce a law that restricts the use of such tokens in the future.
It is not clear how such an event will affect the tokens already awarded to players. However, there are some concerns about how the casino will address the issues. Generally, it could affect the total usability and value of these tokens.
Tokenized reward is still a new concept in the gambling world. However, we expect it to grow in the future with more casinos, seeing it as a way to give the players a sense of community. If a tokenomics and scarcity model is implemented, it could drive the demand for these tokens in the future and lead to greater adoption.