Layer 2 solutions in betting: Exploring potential and implications

Online gambling companies are leading the way in adopting decentralisation, using Web 3.0 technologies to improve user experience. Blockchain-based solutions are continuously shaping this ecosystem, and with every new Layer 2 solution created, the landscape of online betting improves. 

Key takeaways

• Layer 2 solutions support all kinds of transactions to make them faster and more cost-effective which also helps crypto betting websites create a user-friendly experience. 
• Rollups, sidechains, and state channels are some of the most helpful types of Layer 2 solutions in online betting. 
• Advances in the finance and data management field will continue to drive improvements in the world of crypto betting. 

Layer 2 solutions explained: What is it?

Layer 2 solutions are projects built on top of an existing blockchain network. If Ethereum (ETH) is the Layer 1 blockchain, then a Layer 2 solution like Polygon (MATIC) enhances its functionality. It can have its native currencies that can be directly swapped for Layer 1’s main utility token. 

The entirety of the Web 3.0 ecosystem is built on interacting Layer 2 solutions. This includes all industries within it like finance, trading, and even entertainment like Web3 gaming. 

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What are layer 2 solutions for crypto betting?

Web3 gaming consists of many key components in blockchain that offer features like true ownership, scarcity, and play-to-earn mechanisms. Layer 2 solutions in gambling revolve around improving transaction speed and reducing costs. Polygon, for example, helps as a scaling solution by making MATIC available for betting. 

Likewise, there are also dedicated Layer 2 solutions for crypto betting like Polymarket, a decentralised prediction market. However, it’s not casino- or sports betting-focused like Gamdom. Instead, it focuses more on betting for topics like United States politics. 

The benefits of Layer 2 solutions in betting

Online gamblers can enjoy Layer 2 solutions benefits because of how they affect finance. Deposits, withdrawals, and conversions were made easy thanks to these projects. It keeps Gamdom gamblers ahead of the crypto market with the following benefits:

Faster transaction speeds

Layer 2 solutions improve a network’s scaling mechanism. Solutions like Polygon (MATIC) and Optimism help Ethereum users avoid transaction bottlenecks when the volume of users increases. Transactions that used to take minutes or hours can now take milliseconds, competing with fiat options like credit cards. 

Having fast transaction speeds means you can reliably enjoy convenient deposits and transactions whenever you want them. This means giving the gambler control over when they want to play or when to maximise time-limited Gamdom offers while they’re active. It also means you never miss an in-play sports fixture.

Reduced transaction fees

Minimum transaction fees or gas fee prices rise whenever a blockchain bottleneck occurs. As trade volume increases on Ethereum (ETH), this is the main concern users have, which Polygon (MATIC) and Optimism fix. Through Layer 2 solutions, users can avoid paying expensive fees, which is essential for gamblers who play at Gamdom regularly. 

Variety of options to convert assets

Gamdom supports a wide variety of crypto offering its services to all kinds of traders and investors. However, it is still fairly limited to only the top traded assets online like Ripple (XRP), Dogecoin (DOGE), and Tron (TRX). Thanks to modern Layer 2 solutions, investors in other assets can trade their assets to what Gamdom supports. 

This is a crucial role of Layer 2 solutions in the finance sector and this extends to the gambling industry. Using exchange services and decentralised apps (dApps) gives gamblers plenty of options for accessing assets supported by Gamdom. 

Growing trading market

Every Layer 2 scaling solution is a pillar in DeFi’s growing ecosystem. Crypto use cases grow as more developers enter the market, creating a solid foundation for all industries on the Web 3.0. Crypto users will continue growing and blockchains need to keep up with the increasing users. 

If more people become crypto users, there are even more potential customers for online casinos. This possibility makes the online gambling market exciting for casino investors, encouraging them to support more assets or expand their brand to use new technologies.

Why are layer 2 solutions important in crypto betting?

Layer 2 solutions are important to gambling because of the sector’s dependence on blockchain finance systems. These solutions can enrich user experience with networks, and such changes also benefit crypto gamblers. More importantly, it also addresses the following challenges gambling platforms face daily:

Casino geo-location limits

Layer 2 solutions are accessible to everyone who uses the main net it is built on, giving it borderless reach to all users. If used in online casinos, these solutions can help platforms reach more potential customers worldwide. Operators will still need to have the correct licences to expand their jurisdictions but Layer 2 solutions can at least alleviate the technical challenges. 

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Payment processing delays from fiat providers

Traditional banks have the infrastructure to conduct instant payments. It took a while for crypto to challenge them but nowadays, Layer 2 solutions have made decentralised finance arguably better than bank-centralised ones. The biggest difference is that crypto only needs an instant to verify know-your-customer (KYC) compliance but banks can take hours and have working days. 

Card providers like Mastercard and Visa still excel in speed and cost efficiency. However, their verification system is slow and demanding. Layer 2 solutions like rollups and sidechain operations allow blockchains like Ethereum to keep up with their technology and become more user-friendly.

Live betting latency

Platforms like Gamdom have thousands to millions of users and activity can vary depending on the day or event. As a sports betting platform, the number of users soared during major sports events like the FIFA World Cup or NBA Championships. Layer 2 solutions worked wonders streamlining coming and going transactions in these times and it is only possible because Gamdom accepts crypto bets.

For comparison, the website has not experienced technical issues during such times with high activities. Meanwhile, markets that haven’t adopted crypto have reported crashing or failing to accommodate customers due to a high number of order placements. 

Key types of Layer 2 scaling solutions that helped in online betting

Layer 2 solutions come in various forms. Many of them serve the same purpose which is to improve scaling but the distinction lies in how they operate. The following types of Layer 2 solutions are considered the most useful in crypto betting:

Rollups

Rollups bundle multiple transactions off-chain and submit them to the main blockchain for final settlement as 1 batch. It considerably reduces latency by simply organising how the system works. Optimism Rollup is the most popular example of this for smart contract operations while Zero-Knowledge Rollup is faster and more private exchanges, making both ideal for crypto betting platforms. 

Sidechains

Sidechains are networks created parallel to the mainnet with its own consensus mechanism and native token. This means it operates on its own and has rare interactions with the main blockchain. An example is Polygon Proof of Stake (PoS) which can also interact with Ethereum’s dApps and Ronin, a gaming-focused sidechain used for Axie Infinity. 

State channels

Typically, recording transactions between users can slow down crypto transfers. State channels significantly shorten this process by focusing on the final state rather than creating individual records per crypto asset. Bitcoin’s Lightning Network and Ethereum’s Raiden Network are great examples of this type of Layer 2 solution. 

Will Layer 2 solutions transform crypto betting?

Layer 2 solutions are set to change industries that rely on finance and data transfer. All kinds of tech companies rise to improve the blockchain and widen its adoption in the future. This is also true for crypto betting as its users rely on decentralised payment systems and immutable ownership. 

These solutions bring faster transactions, lower costs, and more crypto applications, enhancing the user experience for gamblers. The progress is not fully intended for the gambling sector but it will benefit from them nonetheless. Gamdom knows this and is eager to find more updates in Layer 2 solutions to prepare for the future. 

Frequently asked questions

Will Layer 2 solutions make sports betting cheaper for gamblers?

Yes. Layer 2 solutions improve scalability for crypto users, minimising the cost and time consumed when transferring funds. It ensures that crypto casinos and bookmakers' depositing and withdrawals remain user-friendly. 

Are withdrawals faster with layer 2 solutions?

Yes. Layer 2 solutions like Optimism Rollups and Zero-Knowledge Rollups reduce latency to make all deposits and withdrawals instant. 

Do I need special wallets to bet on bookies using layer 2 solutions?

Layer 2 solutions apply to all transactions made on the network it was built on. There is no need to interact with them unless you’re a developer or an institutional trader who wants to customise your transactions. 

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