Which Tokens Are Worth Paying Attention to as the European Championship Approaches

Original Title: "EURO 2024 narrative for GambleFi: RLB + CHZ to benefit"

Authors: OUROBOROS CAPITAL, 0XRAMEN, MLZE, AERON

Translated by: TechFlow

 

EURO 2024 will be held from June to July. Given that EURO 2020 (postponed to 2021 due to the pandemic) attracted over 5.2 billion viewers, we believe this will increase attention on sports-related tokens and GambleFi. For RLB, this is a significant revenue event—currently, sports betting accounts for 30-40% of its revenue, and we expect this proportion to exceed half. As for CHZ, we have observed that historically, such sports events perform well about 20 days before the start. Additionally, we see a narrative forming around fan tokens, with extra catalysts from the Dragon8 chain upgrade (smart contracts + decentralized applications) and partnerships (such as Azuro).

Rollbit: EURO 2024, More Revenue

Revenue Increase Since Buyback and Burn Initiation: $50 Million Monthly

Since the initiation of buyback and burn (the starting point of the data), Rollbit's revenue has been growing—from about $40 million per month in August 2023 to $50 million per month in April 2024. A significant portion of this revenue growth comes from its sports betting business, which accounted for 30-40% of revenue in April 2024, compared to 15-20% in August 2023.

Source: Rollshare

Buyback Issues

The current revenue level implies a monthly buyback of $5.5 million, with an annual buyback of 33% of the circulating RLB supply. This equates to a price-to-earnings ratio of 3x. So far, about 47% of the circulating RLB supply has been bought back. Despite this, the price trend remains weak, underperforming ETH by 55% since the beginning of the year.

The combination of large-scale buybacks and weak price trends makes it easy to understand why the market continually questions the authenticity of the buybacks. Given that RLB's primary trading market is on Rollbit itself and lacks transparency, it is difficult to verify whether the buybacks are being sold.

Nevertheless, we believe there is a price floor. At the current revenue level, it would take just over 3 years to buy back all of Rollbit's supply. The amount of buyback is a function of revenue and price.

The more RLB is bought back, the scarcer it becomes, the more concentrated the holdings, and the fewer sellers there are. Although we are surprised by the number of coins historically held by sellers, we believe that as the "low RLB price / high buyback" scenario continues, the pressure on token holders to increase transparency from the team will grow, which has historically translated into positive price action.

Revenue Boost from EURO 2024

EURO 2020 had over 5.2 billion global viewers. We expect EURO 2024 to attract a similar level of activity, which will drive Rollbit's revenue growth, leading to larger buybacks in the summer (June to July 2024).

Source: Rollshare

Rollbit's revenue is highly volatile, with some well-performing days generating 2-3 times the revenue of poorly performing days. This is primarily driven by sports betting. With matches happening almost daily, we expect revenue to increase, thereby driving buybacks.

Underweight and Attention

GambleFi has always been underweighted, making it very suitable as a catalyst-driven long-term investment. We believe EURO 2024 is such a catalyst and should bring attention and buyback funds to the token.

Chiliz: EURO 2024 + Chain Upgrade

During the World Cup in November 2022, CHZ was the only token with a narrative fit, yielding nearly +80% returns when longed about 20 days before the event. We are about 30 days away from EURO 2024.

Source: Coingecko, Ouroboros Research

While we believe Chiliz will attract more attention as a narrative driver for EURO 2024, it also has other catalysts, including:

• Dragon8 Chain Upgrade: Chiliz's Dragon8 chain upgrade will go live on May 21, 2024, introducing the EIP1559 fee burn mechanism and a new token economic model, with an initial inflation rate of 8.8%, expected to drop to 1.88% after 14 years. In our conversation with Chiliz CEO Alex Dreyfus, we learned that more dApps (decentralized applications) will go live on Chiliz 2.0 after the upgrade.
• Azuro Partnership: Chiliz announced a partnership with Azuro to co-sponsor a developer grant program to build on-chain sports prediction markets.