‘PoolTogether’: An Ethereum based lottery that Incentivizes Savings
A traditional lottery has an interesting design. It is typically a zero-sum game.
It works this way:
Everyone puts money into the lottery. The lottery official draws the winning numbers, and one person (or a few people) wins significant portions of cash. Everyone else must wait for the next opportunity to bask in the glory of winning tremendous amounts of money.
A substantial number of people see the lottery concept as a way to gamble, a way to bet on the goddess of chance to be in their favor. The lottery and its gambling aspect might be deliciously fun and exciting. Scratch a little and hope all the symbols align, or collect some numbers and wish to hit it big. The anticipation and the leverage is the fun part, trade a little (time and money) for (potentially) a significant sum.
The unfortunate reality is that many people don’t win the lottery, that is so by design. This lottery concept is somewhat similar to the insurance industry, where many people pay into the system to minimize their risk, and where those who do meet with unfortunate incidents realize value when catastrophe and disaster do occur.
As such, lotteries are not usually classified as lawful by many different governments. Even more impressive is that some governments may monopolize the aspect of lotteries, where they are the only ones who can conduct a lottery.
The lottery industry is substantial, and it certainly carries with it large prizes, more than 34 states participate in government-sanctioned lottery systems.
Playing in the lottery might be exciting, but its traditional design is subject to many different written and unwritten rules and regulations. Enter the blockchain. This technology has allowed for more value capture, transparency, distribution in consensus, and other fascinating and unique features. And one team has taken notice of the blockchain and its use value in lotteries. They seek to turn the concept of lotteries on its head and allow for distribution of value in a more fair manner. The team, PoolTogether, collaborates with the MakerDAO Foundation to create a more novel application of the traditional lottery concept.
PoolTogether: An Ethereum-based Lottery Application
The decentralized team, PoolTogether, is set to release the second version of its ethereum-based lottery. The “no-loss” lottery application works in a way where none of the participants will experience a loss in funds.
Essentially, PoolTogether borrows ideas from a traditional lottery bond. PoolTogether organizes a lottery timeframe of 15 days where regular participants can input a particular portion of their DAI the overall pool of DAI. One lucky participant walks away with their winnings from the drawing. But there’s one simple catch. Every single participant in the lottery also walks away with their original DAI input. Those who input more DAI into the ecosystem may expect to increase their chances of winning. As such, those who allocate 40% of DAI to the pool are more likely to be the winners.
One might wonder how this is possible. How can everyone walk away with their original funds? How does the winner win?
It is quite elementary, really.
The winner laughs all the way to their DAI wallet by collecting the interest over the course of the lottery period. All DAI funds are lent to a decentralized open finance project known as Compound. Compound provides interest in the number of funds offered, and all parties walk away from the deal comprehensively and wholly.
As such, the winner is happy, the Ethereum ecosystem becomes secure with more confidence in the overall system, and each project grows in stature and number of users.
PoolTogether Lotteries Draw Massive Interest
A significant portion of individuals find value in the new concept and participate in the PoolTogether offering. PoolTogether has only been around for a short while and has grown a substantial user base by providing a way for everyone to contribute and grow the Ethereum ecosystem by intertwining four different projects in a cohesive manner, PoolTogether, MakerDAO, Compound and Ethereum. T he project proves that there is more than one way to build value in a crypto ecosystem and many parties can collaborate to transform old ideas and bring real value.
When initially deployed, PoolTogether lotteries aggregated more than $150,000 dollars worth of USD reflected in the stable coin DAI. Statistics showed more than 500 participants (as measured by differentiated addresses) and regular recurring participants in PoolTogether lotteries.
PoolTogether Revisions and Changes in Version 2
The PoolTogether Team worked tirelessly to change a couple of features within their lottery design to improve the user experience. First, users that participated in an initial PoolTogether lottery will be automatically entered into future lottery games. Fervent PoolTogether enthusiasts will also see that prizes can be realized weekly. It is important to note that users are not held captive. Any PoolTogether DAI contributor and participant will notice that they can pull their money from the pool at their wish at any period.
Fascinated parties can now contribute with as little as one DAI and can jump into a pool when they want.
Many find value in the user experience and the compelling changes in the application design. It is easy to feel safe and secure with the application when knowing that it has been certified by smart contract security audit decentralized projects such as the Y Combinator-backed startup, Quantstamp.
PoolTogether Generates New Ideas to an Old System
The project is a fascinating one because it shows that one creates new values and bring new ideas to an old system that provides more to all involved. PoolTogether brings about concepts of gamification to incentivize saving money with a bonus for the winner of each pool.
The ZB Take
Concepts such as PoolTogether show that numerous creative uses for the blockchain are present in the world today. The value doesn’t have to come by bringing out completely new ideas. One can instead look at improving current systems in a smart and useful way. Whereas PoolTogether incentivizes people to save their money, contribute to the pool and grow the Ethereum ecosystem, other projects can look at different traditional concepts and work to improve it a phenomenal manner.
About ZB Group
ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.
ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank, as well as exchange brands ZBM, ZBX and Korea’s BitHi.
Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open source their reports and analysis for the public.
Learn more about ZB Group by visiting www.zb.com.