Leveraging the Ethereum blockchain, PoolTogether built a no-loss savings game that prompts people to save money while adding a randomness component to it. Designed as a lossless lottery, PoolTogether is designed in a way to guarantee that there are no losers in the game. Year for a year over 80 billion dollars are generated through the hands of centralized entities controlling the lottery industry across the USA and Canada, while at the same time 40% of all US citizens don’t even have $400 of emergency funds available.
These economics are changed by design by turning spent money into saved money.
Now you may ask how is it possible since there is no lottery without losses? Due to the use of the DAI stabilecoin and a compound crypto lending system, pooltogether built a decentralized finance product with a no-loss guarantee,
How does it work?
- Join Pooltogether
Convert your preferred cryptocurrency to DAI and deposit it into the pool to claim your tickets for the weekly prize draw. 1 DAI equals 1 Pooltogether Ticket
- Building Interest
The Smart contracts and compounds used by PoolTogether then start to earn interest on your deposit which is used to build the prize pool for the weekly winners.
- Prize draw
Every week one lucky winner gets drawn and wins all the interest which got acquired by all pool participants.
- No-loss guarantee
If you didn’t win this week, you won’t lose your DAI deposit since you get all of your money back in case you are not the winner. You can withdraw your DAI coins at any time.
How is the money for the prize pool generated?
The funds for the prize pool are accumulated through the interest of all the DAI deposits made by the pool participants.
How secure and safe is PoolTogether?
Automated smart contracts ensure a certain level of safety, the team behind PoolTogether claims that they hired a few audit companies like Quantstamp and OpenZeppelin, however, all products this early in their development should be handled with caution.
PoolTogether, is it legit?
The smart contract built by their team uses intelligent mechanism solutions to power a no-loss game like PoolTogether, At the moment the service is unproven and there might be some technical errors or bugs in the contract which can cause users to lose their funds, always be aware of that when you use early stage products like this.
Also worth to mention is that player which buy multiple tickets are at a clear advantage when it comes to their winning chances.
Where can I see if I won?
After joining a pool you can see if you’re the weekly winner by simply looking at the “account” page after the weekly prize has been drawn. They also inform all winners via their e-mail newsletter.
While the system behind PoolTogether is pretty solid there are some possible drawbacks in their design, players with more funds will most likely get richer while players with just the minimum amount of required tickets are utilized as a tool to generate more interest for high stake players. Once a user buys 10.000 tickets his chances of winning the prize pool are way higher compared to players which just buy a single ticket. Time has to show how effective their system is against whales and if they will take any measures against whales accumulating bigger amount of tickets.