DeFi – Your Ultimate Guide To DeFi Betting [2023]

Benjamin
October 26, 2022

As the rise of crypto and blockchain technologies continues, some new online trading solutions are being born. Among these, there are even some concepts that are fairly interesting to online casino players. One of the main types of these new gambling markets is DeFi betting apps or platforms where players can anonymously and safely place their bets without a house edge being enforced upon them.

If you are curious about how these work, don’t worry – this guide will provide a complete overview of DeFi betting markets and sites as rated by our industry experts. We’ll be dealing with the main benefits and key features of DeFi gambling sites and markets so you won’t have to bother with the details.

DeFi betting

Our Top-Rated DeFi Betting Sites

Before we start, our team wanted you to have a complete guide on the main DeFi gambling sites that are also referred to as DApps. These are completely decentralized gambling applications that rely on blockchain and provably fair software to eliminate the house edge as you know it.

So, if you are curious about the best gambling DApps that are completely safe and verified, take a look at our team’s latest list which keeps getting updated every month:

BC.Game

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The DeFi Market Explained

Illustration of the DeFi betting platform

Let’s clear out a few crucial points first – the terms DeFi betting, DeFi platforms, and decentralized apps are pretty closely related, but each of these has its own meaning as well. We’ll first put it simply for you by explaining what DeFi means in the first place, and then we’ll make our way through the betting markets and genuine gambling sites that use this technology.

So, what is a DeFi financial system? You can refer to it as a decentralized financial system that isn’t using any sort of a central bank or regulatory body for payment processing and dictating the interest rates and currency fluctuations.

However, DeFi is different than cryptocurrencies in several crucial points. Even though these are closely connected, DeFi is a whole system built upon blockchain, while crypto is a currency that is used within that system as one of the ways to safely store crypto value on the market.

If that makes sense, you can think of it this way – crypto is a part of the DeFi system, but DeFi itself isn’t dependent solely on crypto. It’s a decentralized financial system as a whole and it operates on blockchain by providing secure blockchain databases.

You can use a DApp (decentralized application) of any sort to manage transactions on blockchain within the DeFi system, and naturally, for this, you’d be using cryptocurrencies. Just like that, there are gambling DApps which are also independent, decentralized, and use a DeFi system instead of the classical fiat payments to process your requests and gambling transactions.

If you place a bet on a DeFi system, not only will you get rid of the house edge that regular online casinos enforce, but you’ll also achieve completely fair gambling since DeFi gambling games are also operating on the blockchain.

DeFi And Emergence of Decentralized Casinos

Unlike the “regular” DeFi market, betting on these platforms works a bit differently and it’s closely associated with gambling Dapps. These are decentralized platforms that aren’t operated by traditional casino companies but rather work independently in the crypto space with secure blockchain systems. These may very well be DeFi betting sites, but that’s not necessarily the case.

DeFi gambling vs DApps

You see, DeFi transactions can be initiated and regulated by the activity of the group of its users, but gambling DApps simply use the decentralized payment system but they aren’t entirely integrated into the system. There could still be an operator behind the site, just like when it comes to sites that we’ve recommended in our list.

These are still much safer for online players than regular online casinos since they are completely decentralized, their software runs on blockchain, and you get more privacy while gambling. However, you should note the clear difference between the DeFi predictions market and gambling DApps since the two terms shouldn’t be confused or used interchangeably. Either way, online gambling DApps have grown in the online casino space so much that they now make a logical option in terms of safety and privacy for online players, and picking a DeFi platform running through a casino DApp can be a winning formula.

The Fusion of DeFi And Decentralized Casinos

Now that you are familiar with the basics, let’s discuss further some of the most important aspects of DeFi and DApp gambling. We’ll start with the way you can purchase tokens and play with those, and move up our way through security and yield farming to help you get familiar with everything.

Tokenized Betting

Now that you are a bit more familiar with the terms DeFi gambling and betting, it’s time to explain the differences between DeFi prediction markets and betting sites, as well as how buying tokens works. The prediction market running on a decentralized financial system uses blockchain technology to allow users to set their events and possible outcomes.

This can be done by creating a separate blockchain market on which players will stake their stable coins or other decentralized financial means to bet on the specific outcome. Both the predictions and outcomes are safely stored as individual blockchain blocks, and this means that they can’t be tricked or tampered with in any way.

Instead, all the information is safely stored on the blockchain as you’d be buying tokens for the particular event and betting options through your wallet. For example, there would be different tokens to purchase while betting on two individual teams that participate in the betting round, and depending on the winning bet, the value of these tokens will be affected accordingly.

You can even trade these tokens before the event takes place if you happen to change your mind before the outcome is revealed and it’s possible to bet on anything this way.

There are no odds in a traditional sense, nor will you be losing money along the way due to transaction fees, house edge of the platform, or changes in odds.

Decentralized Banking and Gambling

So, if you now understand the basics of the concept, you may be wondering – how will I get my DeFi betting winnings? Don’t worry – it’s pretty easy if you placed a bet on a DeFi predictions market. Since the terms and betting ranges are determined by the community of the platform, if you win a bet, it will all be recorded on blockchain and your tokens will be paid out to your wallet.

If you lose, the tokens on the predicted event that failed to occur will be voided and you’ll lose your bet. Either way, it still sounds much more appealing for all the crypto players and punters who wish to get additional safety and anonymity while having a wide range of betting markets.

Theoretically, you can bet on almost anything this way, as long as the community agrees, you can create a blockchain for every sort of bet and all the possible outcomes, and the winnings will be served through blockchain as well. There are no waiting times for getting your withdrawals, and it’s much safer to run deposits and withdrawals through blockchain than with traditional payment methods.

Smart Contracts in Gambling

As you may already be aware, all blockchain entries will be recorded on an open ledger – one that is made available to every node that is part of its chain ecosystem. Each linked computer or server will periodically be updated with the latest entry of a bet to preserve the confluence of transactions. At the same time, this forges the authenticity and accountability of the blockchain build, since everyone has real-time access to all new writings on the chain.

So, smart contracts are nothing but strings of cleverly computed code. These things are capable of holding specific instructions regarding value, limits, exclusions, and many other governing rules to allow a highly precise agreement to be drawn up. This is great for DeFi betting where the wins need to be attributed specifically based on the feed of odds and betting results.

With the basic code structure of the DeFi betting platform made available to both developers and the general public, anyone can easily build a decentralized betting platform on a blockchain of their choice. But to players, this brings the benefit of allowing them to see exactly how a DeFi system works and scrutinize the elements involved in building the trust and transparency that it promises.

Yield Farming and Crypto Rewards

We are still talking about the DeFI predictions market, so you should also be familiar with the term DeFi dividends or “yield”. You see, every DeFi pool has an ownership percentage, and your bets in crypto, NFTs, or any other decentralized payment system can earn you dividend payouts.

This also happens on DeFi casinos where players can get a portion of the yield by investing in the site’s token. For instance, you can see this happen on BC GAme through our BC Game review since you can obtain the site’s BCD token and if it raises in value, you’ll be paid out accordingly.

This also happens on so-called “yield farms” where you can wager your DeFi tokens into a new decentralized platform and if the token rises in value, you’ll get paid out as an investor.

However, we have to warn you of all the shady stuff going on out there since there are a lot of “rug pulls” in this area, which happens when token developers sell out their coins rapidly and degrade their value before leaving the project. So, we suggest that you get properly educated on the matter before taking part in any sort of DeFi wagering pool or investment scheme.

Crypto Gambling: A Catalyst for DeFi Integration

As mentioned, there are also DeFi gambling sites and casinos that use the decentralized payment system instead of relying on standard centralized payment options. These sites are the ones that we deal with regularly on this site, so if you want to know more about gambling DApps and provably fair casinos, we suggest you read our reviews as you may learn something important about getting the most out of your crypto coins.

In short, DeFi casinos are way better than regular gambling sites since you get that mentioned dividend payout, you can gamble anonymously, and there’s a lower house edge in general. For example, you can see numerous probably fair games that are only reserved for DeFi players, and these often have RTP rates of up to 99%.

If you are wondering about how this is possible in the first place, remember that these games are in-house blockchain games, so there’s no need for external providers or companies to act as intermediaries. With this in mind, such games are much more profitable for the site as well, as there are no additional production costs, and they can offer transparent and verified gaming content to players while you get a higher overall return on your bets.

Challenges and Considerations

This new technology and its entrance into the casino landscape brings about a handful of benefits that greatly benefit players and punters. The transparent, robust, and publicly indexed nature of the linked blockchain allows for a more open gambling field, one that was not within the capability of existing online casino models. Well, at least that’s what it seems but it’s not a risk-proof model and it also comes with a few risks of its own.

DeFi casinos

For instance, we have yet to see how the relationship between DeFi systems and crypto-gambling DApps will evolve since the sample of existing platforms utilizing this combination is still fairly small. Sure, you can find various sites as recommended by our experts, but it’s still nothing compared with traditional online casinos or even regular crypto casinos.

The main risks involve regulation and security, as well as the way the service scale will work depending on how fast the system spreads for online gamblers. While the lack of proper regulations and rules already hurts some crypto gambling sites, there’s no way to tell how the players will respond to DeFi betting sites where enforcing any sort of regulations seems pretty difficult, not to mention that it would even harm the entire concept.

So, we are pretty hyped up to see how these will evolve, and so should you if you are hoping to get the best possible experience, and most importantly – a fair and secure experience gambling your tokens.

The Future of DeFi in the Gambling Industry

While regulations may or may not be enforced in the upcoming years, one thing is for sure – DeFI betting and DApp crypto casinos will keep evolving together. All the stat reports vouch for that since crypto gambling has been on solid rise for years now, and we are confident it will continue to do so. However, it’s a perfect combination for more development that we could see in the form of DeFi slots, poker, and other types of games.

We are even witnessing the possibility of NFT gambling via DeFi systems, so there’s so much room for growth that it’s to be expected that we see more of these in the next few years.

Cryptocurrencies as the main way of managing DeFi transactions

Final Thoughts

As you can see from this guide, DApp casinos and DeFi systems are combining for a new emerging way of online gambling especially considering the compatibility of these two systems. Decentralized gambling DApps have already been boosting the presence of crypto gamblers online, and with the new DeFi system that can be merged with that one, we have yet to see how it will all unfold in terms of their combination.

Since it’s still a system in development, we encourage you to keep in touch with the latest changes as our Dappcasino experts will give you weekly and monthly updates, so feel free to check our other reviews to stay informed.

DeFI Betting Sites FAQs

  • Are DeFi betting sites legit and safe?

    Yes, betting sites are legit and safe regardless of whether you wager on official DeFi betting sites or investment platforms with yield rewards.

  • How does the DeFi system work?

    The DeFi system operates on blockchain technology to provide the utmost anonymity and privacy to users as there are no centralized financial institutions involved and the main payment means are crypto coins, NFTs, and other decentralized currencies.

  • What's the average return on DeFI betting sites?

    Since DeFi betting sites use a decentralized blockchain system, there are various provably fair games to try and these come with a higher RTP and lower house edge than traditional casino games.

  • Are DeFI casinos provably fair?

    Yes, most DeFi casinos use decentralized provably fair gambling algorithms that work on blockchain and feature a chance to use cryptographic seed and hash to verify each game round’s fairness.

Author Benjamin

Benjamin is the brains behind the Dappcasino.io casino review process and an iGaming content writer with 10+ years of experience in the niche. His “outside the box” point of view on online gambling gives him a unique perspective on every piece of iGaming content that he writes. Having been a player himself for years, he’s especially interested in giving true value to players with an objective approach to reviews and properly testing each site with real-money play beforehand. That’s why we trust him to deliver all the essential details to you regarding what he believes is the future of online gaming - crypto and decentralized casinos. Besides testing out new sites and casino games himself, Benjamin is also a free-time BBQ expert (that’s what he believes at least) with a tendency to enjoy a hot summer day sitting behind the grill with an ice-cold beer in his hand.