DraftKings gets preferential treatment on Polygon Network – Report
In October 2021, DraftKings (NASDAQ: DKNG) announced a partnership with cryptocurrency Polygon to support the debut of non-fungible tokens (NFTs) on the DraftKings Marketplace.
As of the time of this announcement, Polygon, which is based on the Ethereum blockchain, is the 21st largest digital currency by market capitalization. Today, it ranks 14th. A new article questions the nature of the relationship between DraftKings and Polygon and suggests that the Web3 company may be giving gaming companies preferential treatment.
An article published earlier Thursday by CoinDesk’s Danny Nelson noted that Polygon paid DraftKings “millions of valuable MATIC tokens” to run the Polygon Validation Network. The agreement follows an announcement in March 2022, in which the Boston-based online sports betting operator announced that it was partnering with Zero Hash to leverage the digital assets held in its vault to support the Polygon (MATIC) zone Blockchain network.
Through this partnership, DraftKings optimizes its working capital and liquidity as it operates validator nodes that contribute to Polygon’s governance and network security,” according to a statement from the sportsbook at the time.
The CoinDesk article notes that Polygon has yet to disclose the compensation it provides to DraftKings for operating one of its verification networks. Right now the validator is not working, which may indicate that Polygon is suffering losses due to its agreement with DraftKings. Neither company commented to CoinDesk on the matter.
Data confirmation relationship on the chain
In the cryptocurrency world, on-chain data serves as a digital ledger to identify various digital asset transactions.
CoinDesk used this data to confirm that as of October 2021, DraftKings had "received millions of dollars in cryptocurrency directly from Polygon" and then earned millions more through staking relationships. Few of Polygon's other network validators enjoy such favorable treatment.
Polygon also has advantages. When the deal with DraftKings was announced in October 2021, the cryptocurrency was trading at $1.76. Until December. As of February 27, 2021, it has risen to $2.77. As of this writing, the exchange rate is 76.22 cents.
Polygon solves blockchain-related issues such as high gas fees and slow speeds without compromising security. According to the token developers, this multi-chain system is similar to other systems such as Polkadot, Cosmos, Avalanche, and others.
The asset aims to defeat these competitors while becoming more powerful and secure by fully leveraging Ethereum’s network effects.
DraftKings is “different” in the Polygon community
An unidentified Polygon executive told CoinDesk that DraftKings are not "equal members of the community." Blockchain data confirms that the gaming company was paid unusually high amounts for operating the now-defunct validator network.
This agreement contradicts what Polygon co-founder Sandeep Nailwal said in a March 2022 statement.
“DraftKings will take its place among existing validators as an equal community member,” he said in a press release.
However, the statement did not explicitly say that Polygon would be sending millions of tokens to DraftKings. Complicating matters for other Polygon operators is that tokens sent to DraftKings are not staked, meaning other delegators collect fewer rewards when they reach the network, according to CoinDesk.
Polygon launched DraftKings from its verification program last month, but the two companies have maintained an NFT relationship. A DraftKings employee told CoinDesk that the company is working on becoming a polygon validator again.
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Source: www.casino.org
