Player Payout

Player payouts is a new way of automatically paying online gaming participants immediately after the tournament ends. The underlying blockchain network and smart contract technology ensure all payments are processed instantaneously with cryptocurrency like ETH, MATIC, DAI, USDC, etc.

What Are Player Payouts?

The e-sports industry is one of the fastest-growing industries, exceeding billions of dollars in revenue. Due to its surging demand and growing viewership worldwide, esports tournaments attract huge sponsorships from VC firms, Fortune 500 companies, and major media networks.

However, it’s not uncommon for e-sports tournament organizers to delay payments to players for many weeks or even months. To some extent, it’s understandable, as organizers have to manually distribute payments individually among all the winners. Most organizers use traditional transaction models like wire transfers, ACH Transfer, paper checks, etc. These methods are expensive, dependent on human resources and painfully slow, leading to delayed payments.

Automated player payouts are a possible solution for this and other related problems plaguing the esports community. By using smart contracts and decentralized exchanges (DEXs), tournament organizers can automate the process of distributing winnings and processing them immediately to the winner’s crypto wallet. Not only will this help avoid unnecessary transaction fees that both parties pay to the financial institutions, but it will also motivate more organizers and players to be a part of the Play2Earn gaming revolution.

How Do Player Payouts Work?

E-sports tournaments are often massive and complex global events that attract millions of competitors annually. Each tournament has a monetary prize pool that is distributed among a select number of winners. Using smart contracts hosted on a blockchain network, organizers can customize and manage the payouts based on each player’s performance in the tournament. Additionally, smart contracts also add more transparency to a tournament’s structure and payout schedule. 

Smart contracts are digital contracts that automatically process transactions based on pre-defined parameters. Let’s consider an example to demonstrate how an Ethereum-based smart contract for an esports tournament works (this same process would go for tournament contracts deployed on the Polygon network or any other smart contract ecosystem). 

The Ethereum blockchain uses a system of computers (called nodes) that continually confirm and document all transactions on the network. Tournament organizers begin by pre-configuring the payout distribution by choosing how many players will be paid out and what percentage of the funds in the contract each placing will receive. The tournament smart contract is then deployed onto the Ethereum blockchain.

The prize pool is typically made up of player entry fees and/or sponsor donations which are sent in, and held in escrow as the tournament plays out. To start the player payout process after the tournament completes, the organizers will need a small amount of ETH to initiate the smart contract-powered payments. As the players meet the ranking requirements, the defined transactions are processed by and documented on the underlying blockchain. There is no third party involved; hence tournament winners receive their payments almost instantly and for a nominal fee.

Chris has a bachelor’s degree in Economics and is an active member of the crypto gaming community. Using his knowledge of the esports industry, competitive and social gaming, Chris is helping redefine the gaming industry by bridging blockchain payment technology and tournament automation.