DraftKings faces scrutiny over Polygon deal

The biggest gaming operator, DraftKings, signed a deal with Polygon, a crypto network, in October 2021. This aimed to promote web3 technology and NFTs, which would be achieved via the DraftKings marketplace. Polygon was meant to offer NFTs to a new target audience who had not explored them before, and it would be possible with the help of DraftKings, an expert at digital sports.

Nevertheless, the latest disclosures have questioned the kind of cooperative effort between them. According to a Danny Nelson report on CoinDesk, DraftKings was rewarded with “millions of valuable MATIC tokens” in payment for running a Polygon Validators network. Zero Hash provided staking facilities for digitally backed polygons as part of the partnership announced in March 2022. DraftKings is involved in improving its working capital and liquidity and participating in governance and network security for Polygon.

However, on the collaboration front, the active validator of DraftKings is not operational, leading to speculations about possible losses associated with Polygon. More importantly, on-chain data disclosed that DraftKings had received several crypto payments from Polygon since October 2021, which other network validators did not receive. This favoritism is far from what Polygon publicly said about DraftKings, stating they are “an equal community member” among the validators.

The announcement of such collaboration marked an upsurge in the value of Polygon’s cryptocurrency, providing evidence of the market effect of such alliances. The issue, though, is that the compensation was undisclosed. By now, DraftKings has stopped running a validator network in the Polygon community, making the issue questionable regarding fairness and transparency.

This follows the initial announcement of the partnership that strengthened the position of Polygon to come up with Draft Kings Marketplace. It included a marketplace offering virtual collectibles involving celebrity figures such as Tom Brady and Naomi Osaka, facilitating airdrops and NFT-based transactions. DraftKings designed the Validator to bring confident assurance to the Polygon network by proving its incorporation into the blockchain gaming environment. Polygon viewed the partnership as a key means of introducing cryptocurrency to mass consumption.

This led to Polygon revoking the DraftKings inclusion in its validator program this past month. Nevertheless, both parties still have their NFT ties, while DraftKings is searching for a restoration of one of its Polygon validators. The occurrence of this situation emphasizes how intricate issues relating to equity and fairness do arise with collaborative undertakings that are associated with the technology of blockchain.