This summer has certainly been an interesting one for us at FunFair – moving to 100% remote working, witnessing the explosion of DeFi (and its associated memes), navigating the consequences of the increased network congestion and gas prices as a result; and also, more recently, managing some structural and personnel changes within the business.

Nonetheless, we remain in a very strong position, with a mature core product, an experienced and very capable team, and a healthy financial runway.

This update will cover both our existing casino platform, and the two additional areas that we are now focussing on with a broader remit – our games team, and the wallet that we built to support our platform.

We have also been having a number of wider internal and external conversations – we’ve been looking at DeFi as a whole (and we’re closely watching the launch of Ethereum 2.0 phase 0) and investigating whether or not we can bring something to that space – this is still on-going; nothing to report today.

Secondly, however, I’ve been delighted to see that (finally) a number of teams/projects are stepping up to solve Ethereum 1.0’s scalability challenges.  We, at FunFair, were one of, if not the first, to provide a Layer 2 solution on the Ethereum MainNet.  It was, however, fairly specific to our particular needs – and there are exciting, and much more generic solutions on the way or even live.

We hope this will provide a great opportunity for us across our business – scaling the core platform, allowing us to develop additional types of games, and, with our existing wallet technology, we are ideally placed to make the transition to a suitable Layer 2 platform a seamless user experience.  Our existing State Channels might even become the first live Layer 3 solution!  We are deep in research here, so watch this space!

Jeremy Longley, CEO & Founder, FunFair.

Platform 

The FunFair platform updates have continued as planned. Following the Q2 improvements of removing friction in the onboarding journey, the team turned their focus to the front end.

This included deliverables that the community has been asking for some time.

In particular, a few of note include: 

  • Countdown timers have been added to the promotion and main page to provide more FOMO and better describe the timeliness of the promotions.
  • Real-time leaderboards have been delivered after the base avatar system was delivered in Q2. The community should be able to experience this in the next MoonRacer competition.
  • A live conversion of $FUN has been included, to illustrate the relationship between FIAT and $FUN to players. 
  • We have also launched our latest Crypto Trader Rush game and are gearing up for another release after our MoonRacer promotion this quarter. 

The marketing team have also revamped the entire promotional calendar with more live promotions than ever before listed on site. Including two new acquisition offers, a weekly progressive pot for existing players and continued to offer a fee-free depositing experience to remove any friction from the wallet. 

However, as per the community announcements over the quarter in our discord and telegram channels, this quarter was particularly challenging with the gas costs increasing to almost $80 to open and close a session, and requiring some measures to negate these impacts and really identify the customers providing value to the casino. These included:

  • Introducing a temporary minimum 10,000 $FUN to be brought to each session which has since been lowered as gas prices have become more stabilised. 
  • The removal of the free $FUN upon signup, and moving to a deposit-only bonus.
  • Adding additional focus towards retention/VIP promotion activity. 

These concerns are seen as immediate issues. These decisions were made to mitigate and prepare for the long term.

We can see this particular strategy start to pay off as other gaming providers in the space have started to falter. For those following dappradar.com, CasinoFair has remained in the top 5, usually top 3 during this high gas period for all Ethereum gambling dapps.

Our team continues to spend time looking at longer-term solutions as we don’t want to wait for these issues to resolve themselves. Ethereum continues to evolve, and we expect our tech to evolve alongside these developments. We have a particular focus on the many Layer 2 solutions (along with other side-chains) that are finally coming to MainNet, to ensure we are ready to scale up when the ecosystem and technology allow us.

As such, we will be pouring our efforts onto the platform and its foundations in regard to these L2 opportunities. This means we will be putting our development and marketing activity in Japan on hold. Japan was always a stepping stone in our localisation strategy, the starting point for more markets to come. As it’s key to achieving scalability, L2 now needs to be the focus, and we will pick up on localisation when we have the foundations in place to do so.

At that point, we will fully support Japan with the product, tech, marketing, and operations resources it needs to succeed. It’s a good time to execute this decision, as we have limited players and we can cross-sell them easily into the .com platform.

Product / Tech

Several marketing tools are going to be improved to enable ease in managing and delivery, with an additional focus on the UI for our players.

  • Affiliate marketing: We want to make improvements in the management and speed in setting up affiliates. We are rebuilding our platform to ensure affiliates can get their tracking links simply, and most importantly, quickly, to promote CasinoFair. 
  • Refer a friend: A new system is being built from within player accounts, ensuring a more user-friendly interface and making sure players get their referral links with minimal friction. 
  • Promotion section: The promotion section is going to be folded within the CasinoFair domain and ensure users are never re-directed outside of the casino.
  • SEO: With the delivery of the blog functionality in Q2 and the consistent weekly updates to this, we want to maximise the content to be found by Google and the major search engines. As such, we are implementing SEO best practice to improve users ability to find the site. 
  • Tag management: As the marketing team builds its efforts around retention of users and existing players, improved tag management is required to ensure that they can identify each user and deliver a better-customised experience. 

We believe these actions this quarter will help improve acquisition goals in addition to the expenditure of traditional advertising. 

Smaller tweaks to the UI of the platform are also being developed and will continue to do so in the future to improve the usability of the Casino.

Marketing

The team had initial success in driving customers to the casino prior to the gas concerns. However, the reduction in acquisition tools such as free $FUN and session limit introductions slowed this considerably. 

Marketing, as a result, spent time looking into where we provide value for the casino; driving lots of low-value sessions for the casino doesn’t make viable sense. 

Some of the interesting stats that were brought to light from our analysis of the past year include: 

  • Our high-value players monthly wagering, on average, is 5,222% higher than all other players in CasinoFair.
  • Countries that provide the most revenue are from the Nordics, Canada and Central Europe.
  • The countries that provide the lowest value include India, Indonesia, and Thailand. In comparison, they provided the highest number of players. 

After some initial successful testing on dormant players that occurred over Q3, the team is looking to roll out two programs hand in hand with the new functionalities that the product team are providing (such as tag management). 

  •   Dormant program: An automated process of customised messaging for users that have not returned to the casino. The success of acquisition earlier in the year has allowed us to investigate users that can provide value and gives us the opportunity to re-engage via our database. 
  •   VIP program: A customised program for the top players ensuring they continue to play within the casino and reward them for doing so. 

This has begun in earnest with the team building customised reports for the VIP tracking in line with this focus.

Marketing is continuing to monitor players and adjust newsletter/social/SEO and other retention channels in line with performance, and will optimise as they have been.  

Wallet

In line with previous quarterly communication, we have investigated a handful of non-FunFair partners to integrate the white-label FunFair Wallet. This opportunity was made possible thanks to the wallet being a light lift technically. Further, it would significantly benefit the platform through the potential for better supplier relationships.

However, Q3 has proven challenging with many of the larger dapps having been adversely affected by rising gas prices or are developing their own solutions. 

As such, we’re going to continue with this strategy of offering a B2B wallet, but with an adjusted approach. 

  • Investigate how we support the best-emerging technologies to alleviate issues with gas fees. 
  • Focus our attention on the development community and getting traction at a grassroots level.  

Regarding our first objective, there is going to be a need for wallets to support emerging L2 and sidechain solutions as they do for Ethereum itself, such as checking their balances and transferring tokens.

This dovetails very nicely with the platform work as we can investigate and test potential new solutions through the wallet as a precursor to potential changes to the platform. 

Regarding our second objective, we want to remove as many hurdles and steps as possible to achieve a “Self Service” approach to using the FunFair wallet. This will enable developers to benefit from our experience of building our wallet that runs on a live product. 

Simplifying documentation, providing sample code and reducing the complexity of having to create additional components to deal with token history, exchange and many more features.

Commercially this plays out quite simply too, the integration process for a developer includes commercial onboarding, accepting T&Cs and enabling them to execute effective marketing through referral schemes. Put simply: developers can pick up and go. 

The goal is to scale cost-effectively and build a base of integrations within many different dapps in the space. Adoption is the priority for the wallet, and as such, no fees are required from developers wishing to integrate the FunFair wallet, for now.

At the same time, we are continuously improving the wallet in our casino platforms and making the user journey more enjoyable, improving KYC and management of the tokens/currencies inside the wallet.

In terms of next steps, once the development team has finished their documentation and are happy with current integration options, the marketing team will begin to engage.  This will be a grassroots approach rather than specifically targeting larger companies. Engaging at hackathons, looking to speak with communities of blockchain developers online and visiting start-up blockchain offices to get the word out. Letting developers know there is a B2B wallet that can be integrated with little to no fuss into their own dapps, and make one job that little bit easier for them.

Games

Last quarter the team announced we would be exploring the distribution of selected games into traditional online gambling operators through content aggregators’ remote gaming servers. 

Having finalised our investigation, we’re excited to announce that a deal has been signed with a remote gaming server provider. To be revealed publicly very soon! 

This deal enables us to distribute both single and multiplayer games through what is essentially a remote gaming server. This server is connected to more than 600 casino brands globally. 

This development is positive for several reasons. 

  • Multiplayer games: Our team can build and develop game types that we have wanted to deliver for a long time, such as multiplayer and our own take of games like “crash”.
  • Future platform expansion: By developing multiplayer games now, we place ourselves in a stronger position for when L2 and side-chain solutions are ready. Our pre-built multiplayer games can be delivered onto the FunFair platform much faster. Thus, we can capitalise on these games when the technology is ready.
  • No ‘red tape’: We don’t need a license or our own technology to distribute as it’s a publisher model using the partners’ license and technology. This is a rapid and very cost-effective way to get our content into the market.
  • Revenue generating: This partnership will enable us to monetise existing assets without impacting the platform, extend the runway, and create value for the overall group.   

The game studio will continue to develop games for the casino platform, for now in single-player mode due to the complexities of fate channels and multiplayer games. 

In terms of next steps, we are completing our first game this quarter and are looking for casino brands to distribute our games to their users and will be doing this through a range of marketing activities including;

  • Delivery of a new FunFair games site
  • A consistent PR approach

We’re excited to get moving with what is a very cost-effective model to distribute and market our games content. It will also significantly increase FunFair’s brand equity in i-gaming, enabling us to have immediate revenue-generating relationships with operators globally, ultimately delivering a better standing in the casino space overall as a supplier. 

This will be hugely beneficial when we have a more scalable blockchain platform to sell with the improvements we’re investigating through scaling technology. 

Finance 

The Treasury remains strong with over 3 years of runway remaining.  FunFair took advantage of the Eth rally over the summer and remains ‘long’ on the value of Eth.  

Month on month burn rate has decreased 13% from Q2 to Q3 due to mitigating actions to reduce gas costs and other operation savings such as marketing location costs.

Looking Ahead

Q3 has been an exciting time for blockchain with the plethora of L2 opportunities coming to light and as aforementioned, the arrival of meaningful DeFi solutions.

FunFair always has and continues to monitor these developments to help support the business and the FunFair ecosystem. 

It’s clear to see that while Ethereum has had some scaling issues such as gas prices which have impacted the entire network, solutions to those scaling issues are closer than ever. Our platform must be in a position to capitalise on these solutions as they are delivered to the market.

The delivery of RGS games this quarter, a stronger network of partners using the wallet, and platform improvements for players is strengthening the core FunFair business and brand for the future. 

We’re excited for Q4 and are looking forward to making some announcements very shortly!  Stay tuned to our discord or telegram communities for more updates as we look forward to a productive quarter.