In October 2021, DraftKings (NASDAQ: DKNG) introduced a partnership with the cryptocurrency Polygon to help debuts on nonfungible tokens (NFTs) on DraftKings Market.
A picture touting the DraftKings/Polygon relationship. The digital foreign money allegedly gave the gaming firm preferential therapy. (Picture: Polygon Weblog)
On the time of that announcement, Polygon, which is predicated on the ethereum blockchain, was the quantity 21 digital foreign money by market worth. Right this moment, it ranks 14th. A brand new article calls into query the character of the DraftKings/Polygon relationship, suggesting the Web3 agency could have given the gaming firm preferential therapy.
An article printed earlier Thursday by Danny Nelson of CoinDesk signifies Polygon paid DraftKings “hundreds of thousands of precious MATIC tokens” to run a Polygon validator community. That association stemmed from a March 2022 announcement wherein the Boston-based on-line sportsbook operator stated it’s partnering with Zero Hash to stake digital property it holds in its treasury to help the Polygon (MATIC) blockchain community.
With this collaboration, DraftKings is optimizing its working capital and liquidity because it operates a validator node that contributes to Polygon’s governance and community safety,” in keeping with a press release issued by the sportsbook operator on the time.
The CoinDesk article identified that Polygon didn’t disclose that it was compensating DraftKings to run considered one of its validator networks. Now, the validator isn’t operational, which might be an indication Polygon suffered losses on the association with DraftKings. Neither firm commented on the matter to CoinDesk.
On-Chain Knowledge Confirms Relationship
Within the cryptocurrency house, on-chain information serves as a digital ledger used to establish numerous transactions made in digital property.
Utilizing that information, CoinDesk confirmed that beginning in October 2021, DraftKings acquired “hundreds of thousands of {dollars} in crypto instantly from Polygon,” after which earned hundreds of thousands extra by way of the staking relationship. Few of Polygon’s different community validators loved such preferential therapy.
There have been advantages for Polygon as effectively. When the take care of DraftKings was introduced in 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 ache factors related to blockchains, like excessive gasoline charges and sluggish speeds, with out sacrificing on safety. This multichain system is akin to different ones, resembling Polkadot, Cosmos, Avalanche, and so forth., in keeping with the token’s builders.
The asset seems to beat these rivals by totally leveraging ethereum’s community results, whereas being extra highly effective and safe.
DraftKings ‘Not Equal’ in Polygon Neighborhood
An unidentified Polygon government informed CoinDesk DraftKings was not an “equal neighborhood member,” with blockchain information confirming the gaming firm acquired unusually massive compensation to run the now-defunct validator community.
That association ran opposite to what Sandeep Nailwal, cofounder of Polygon, stated in a March 2022 assertion.
“DraftKings will take its place amongst present validators as an equal neighborhood member,” he stated within the launch.
Nevertheless, that assertion didn’t clarify that Polygon can be directing hundreds of thousands of tokens to DraftKings. Making issues worse for different Polygon operators was the purpose that the tokens despatched to DraftKings weren’t staked, which means that after they hit the community, the rewards accrued by different delegators have been diminished, in keeping with CoinDesk.
Final month, Polygon booted DraftKings from the validator program, however the two entities preserve an NFT relationship. A DraftKings staffer informed CoinDesk the corporate is working to be reinstated as a Polygon validator.
