DraftKings Received Preferred Treatment on Polygon Network – Report
In Oct 2021, DraftKings (NASDAQ: DKNG) proclaimed a partnership with the cryptocurrency Polygon to living debuts on nonfungible tokens (NFTs) on DraftKings Marketplace.
At the time of that announcement, Polygon, which is based on the ethereum blockchain, was the number 21 digital currency past market value. Today, it ranks 14th. a young article calls into call into question the nature of the DraftKings/Polygon relationship, suggesting the Web3 loyal may have got granted the gaming company preferential treatment.
An clause published before Th by Danny Nelson of CoinDesk indicates Polygon paid DraftKings “millions of worthful MATIC tokens” to running game a Polygon validator network. That arranging stemmed from a March 2022 announcement inwards which the Boston-based online sportsbook operator said it’s partnering with Zero Hash to wager digital assets it holds inward its exchequer to back up the Polygon (MATIC) blockchain network.
With this collaboration, DraftKings is optimizing its working great and liquidity as it operates a validator guest that contributes to Polygon’s governance and electronic network security,” according to a statement issued past the sportsbook manipulator at the time.
The CoinDesk article pointed come out that Polygon didn’t expose that it was compensating DraftKings to run for one of its validator networks. Now, the validator isn’t operational, which could live a sign on Polygon suffered losses on the arrangement with DraftKings. Neither companion commented on the thing to CoinDesk.
On-Chain Data Confirms Relationship
In the cryptocurrency space, on-chain information serves as a digital book of account used to key various transactions made inwards digital assets.
Using that data, CoinDesk confirmed that starting inward Oct 2021, DraftKings received “millions of dollars in crypto direct from Polygon,” and and then earned millions more through and through the staking relationship. Few of Polygon’s other electronic network validators enjoyed such preferential treatment.
There were benefits for Polygon as well. When the business deal with DraftKings was announced inwards October 2021, the cryptocurrency traded at $1.76. By Dec. 27, 2021, it had surged to $2.77. It trades at 76.22 cents at this writing.
Polygon solves nuisance points associated with blockchains, like high gas fees and slow up speeds, without sacrificing on security. This multichain system is akin to other ones, such as Polkadot, Cosmos, Avalanche, etc., according to the token’s developers.
The plus looks to pound those rivals past fully leveraging ethereum’s electronic network effects, while existence more powerful and secure.
DraftKings ‘Not Equal’ inwards Polygon Community
An unidentified Polygon executive director told CoinDesk DraftKings was not an “equal community of interests member,” with blockchain data confirming the gaming keep company received unco big compensation to pass the now-defunct validator network.
That arrangement ran contrary to what Sandeep Nailwal, cofounder of Polygon, said in a March 2022 statement.
“DraftKings testament get hold of its localise among existing validators as an match community member,” he said inward the release.
However, that statement didn’t pretend solve that Polygon would live directive millions of tokens to DraftKings. Making matters worsened for other Polygon operators was the repoint that the tokens sent to DraftKings were not staked, signification that when they strike the network, the rewards accumulated by other delegators were reduced, according to CoinDesk.
Last month, Polygon booted DraftKings from the validator program, but the 2 entities defend an NFT relationship. type A DraftKings staffer told CoinDesk the company is workings to live reinstated as a Polygon validator.