Housepass Utilities

A dedicated channel in the Divvy Discord outlines Housepass Utilities but I will endeavour to summarise it as best as I can. As mentioned previously, the House Passes operate on a tier basis with rewards as follows:

• Silver House Pass
  • 10% Boost for DVY Token Rewards + Referral Earnings
  • Staking 10 Silver Passes Unlocks Gold Boosts
• Gold House Pass
  • 20% Boost for DVY Token Rewards and Referral Earnings
  • Stake 20 Gold Passes to Unlock Onyx Boosts
• Onyx House Pass
  • 50% Boost for DVY Token Rewards and Referral Earnings
  • Stake 30 Gold Passes to Unlock Chrome Boosts
• Chrome House Pass
  • 100% Boost for DVY Token Rewards and Referral Earnings

Revshare

Once again, clarification was required due to contradictory wording from the team. The Housepass Utilities channel stipulates the following:

I asked where this 20% was coming from and the answer was as follows:

You may recall this screenshot from the About page. So technically it isn’t a straight 20% revshare. It’s actually 1% of profitable events go to NFT and $DVY stakers but through some mathematical gymnastics, it could be perceived as an average of 20%.

$DVY

As previously mentioned $DVY will be earned as a reward for use of the platform and allocated to Divvy Pass holders. $DVY will be primarily used as follows:

•  Spend
  • $DVY tokens will be used throughout the ecosystem for things such as minting bets as NFTs and trading them, participating in raffles, participating in private poker games, purchasing bet boosters etc.
• Staking
  • Profit Share
    • Update: Once again, upon clarification, I worked out that the Litepaper had incorrect details. The whitepaper states that 5% of protocol profits are allocated to $DVY token stakers but as the above screenshots show, this is not the case.
  • Voting rights

Team Members	Role

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Carlos Liang

• Founder and CEO

Moe Rahim

• Strategy and Growth

Keisuke Watanabe

• Director of Engineering

Samuel James

• Community Manager and Marketing

Anton Licul

• Creative Director

Initial Thoughts

I’m going to be perfectly blunt. This project is riddled with red flags which I will endeavour to get through as didactically as possible.

Legal Issues

Online gambling is a highly regulated space. We’ve seen the difficulties and hoops other projects need to jump through to get their licensing. Through my conversation with them in a Discord ticket, Loso was able to clarify that the platform is currently licenced out of Costa Rica and was compared to the Curacao licence many platforms are using.

My chief concern from a legal standpoint is the lack of KYC. If they were to catch the attention of any regulator, I am confident that they will come down hard on a platform like Divvy.

Furthermore, the notion of earning $DVY tokens for bets placed is essentially incentivising bets which also raises potential legal issues.

Poor Communication and Wording

I will admit, I am a stickler for how things are worded as I like to be very clear in my understanding of how things work, but even then I would make the case that some of the wording provided has not only been awful, but contradictory.

As demonstrated in previous screenshots provided, wording provided in their Litepaper or Housepass Utilities were either incorrect or technically true if you did some mathematical gymnastics which in my opinion, is extremely poor form. What was most shocking to me was that when I pointed this fact out, I was told that it would need editing and that it was something they missed since someone else wrote it.

I can understand out-sourcing writing of the Whitepaper as it often helps to have someone else explain your concepts in simpler terms, but the fact that such an important point was missed in the process of proof-reading is not a good sign. At time of writing, it has been a week since this point was brought up and no changes have been made as yet.

Confusion Over Rewards

Something else I’m not clear on is the pass rewards mechanism. I can only infer that Divvy House Pass rewards do not stack. If they did, then staking 5 Silver House Passes should yield a 50% boost to $DVY yield and referral earnings but that wouldn’t make sense given it states you need to stake 10 of them to unlock Gold tier rewards which is 20% boost.

But then that begs the question, what reason is there to have between 2 and 9 Silver House Passes given the rewards don’t stack? It leaves a lot of middle ground between 1 and 10 where the rewards aren’t altered by the number of passes you have staked.

The point was also made that ‘profitable events’ would result in the distribution of profits with 98% going to House Pool, 1% to the Foundation and 1% to NFT/$DVY stakers. Now is this every individual bet where this is triggered? Or do they aggregate the winning and losing bets over a period of time and then distribute net profits if there are any? To do so on an individual bet basis seems like madness because it then begs the question, what about losses?

‘Be the House’

Whilst this tagline can seem appealing to people who have long suffered from losing to the ‘house edge’, the cynic in me sees being ‘the House’ as assuming all the risk from a financial standpoint. Consider a worst case scenario that somebody wins big from a single bet. Or a series of bets simultaneously drain a large amount of the House Pool of liquidity because after all, it is your job as the LP to cover the winning bets. I understand that the end goal is that over the long run, the House Pool will come out at a net positive, but there will almost certainly be periods of time as a new staker where your share of the House Pool drops below your initial contribution. What happens if enough people panic and pull their funds out? Suddenly the House Pool is smaller meaning it can’t support the same volume of bets meaning it will take longer for you to make your money back. Of course this is a worst case scenario but not a game I’m willing to play.

Summary

Personally, I won’t be participating on any level, whether that be as an NFT holder or liquidity provider. There are simply too many areas of concern that mean I will not be engaging with this project.