How PoolTogether Works
Unlike traditional lotteries, PoolTogether allows you to buy tickets and participate in daily drawings.
If your ticket isn’t a winner, you can use it again—no money is lost.
How can this actually work? Let’s see in more detail.
What is Pooltoghether?
PoolTogether is a prize savings protocol that combines the excitement of traditional lotteries with the benefits of cryptocurrency staking. Users can participate in daily prize draws and have the option to withdraw their deposit at any time.
Ethereum-Based Lottery Platform
PoolTogether is an Ethereum-based web3 lottery platform that’s backed by MakerDao. It accepts tokens like DAI, UNI, USDC, and COMP.
You deposit cryptocurrency into pools, which are then staked via Compound, a DeFi platform. The interest generated from these deposits funds the lottery rewards, with jackpots increasing as more users join.
Pooltogether: Open Source and Provably Fair
The platform is provably fair, with transparent prize draws that anyone can confirm. It is globally accessible, offering a level playing field where users enjoy the same conditions.
Built on open-source and secure smart contracts living on the blockchain, PoolTogether’s code is available for everyone to verify and validate. The platform undergoes regular audits to ensure its security.
Decentralized and User-Owned
PoolTogether is decentralized and user-owned, with control over the protocol resting in the hands of the community holding the POOL token.
By offering a provably fair system, global accessibility, and user-driven governance, PoolTogether provides a unique opportunity for users to save and potentially win big prizes in the DeFi space.
Weekly Draws and Rollover Tickets
Automated smart contracts pick winners in weekly draws, while non-winning tickets roll over to the next draws until they’re withdrawn or finally win.
This “prize savings” approach encourages users to hold onto their crypto instead of spending it.
The platform also offers pods, which allow you to group deposits with others to increase your chances of winning.
A “Pod” is a smart contract that allows users to merge their deposits. When the Pod wins, users split the prize based on their individual contributions.
These Pods introduce two major enhancements: reduced gas costs when entering Prize Pools through batching and increased winning odds via collective deposits.
How to Participate in PoolTogether
To get started with PoolTogether, users need to connect a compatible cryptocurrency wallet, such as MetaMask, Coinbase Wallet, Trezor, Ledger, or Trust Wallet, to the PoolTogether website.
Once connected, they can browse through the different pools available, each featuring its unique weekly prize.
To join a pool, users deposit the required cryptocurrency and obtain their lottery tickets.
It’s essential to note that each pool has its rules, so users should check them before participating.
How to Maximise Benefits
To maximize their benefits, users should maintain a minimum deposit period of 10 days to avoid a 1% fee on their deposit.
Additionally, they might want to explore PoolTogether Pods to pool their deposits with others, potentially improving their odds of winning and saving on gas fees.
By actively participating in various pools, users not only increase their chances of winning but also contribute to the growth of the prize pool, with higher prizes for the entire community.
Key Features of PoolTogether
PoolTogether has been live for over three years and has become a widely used DeFi application.
The platform has distributed over $5 million in rewards since its inception, with the luckiest winner depositing $74 and taking home over $40,000.
Fair and Globally Accessible
PoolTogether is provably fair and globally accessible, and it’s fully non-custodial, which means you’re the only one with access to your deposited funds.
Prizes Generated from Interest
Prizes come from the interest earned on all deposits, allowing users to participate in daily prize draws and withdraw their deposits whenever they want.
Open-Source and Secure Smart Contracts
Built on open-source, secure smart contracts on the blockchain, PoolTogether’s code is available for everyone to verify and validate.
The platform undergoes regular security audits and is decentralized and user-owned, controlled by the community holding the POOL token.
The Future of PoolTogether and the POOL Token
PoolTogether introduced the POOL token in February 2021, allowing token holders to vote on proposals that shape the platform’s future.
Anyone can earn POOL by participating in PoolTogether or buying it from exchanges like Uniswap, Gate.io, and 1inch.
Potential Expansion and New Features
As the platform continues to grow, it might introduce more pools, additional tokens, and new features to enhance user experience and increase the potential for substantial prizes.
Considerations and Risks of PoolTogether
Like in all ventures, there are pros and cons for those who love the lottery and love the mix with new technology. That’s why it’s useful to consider also the downsides of a service like Pooltogether.
Due to the demand on the Ethereum network, transaction fees can be pricey. On top of that, experts and everyone interested in crypto gambling know how volatile gas fees can be. Sometimes the ticket to participate in a pool can cost less than the fee to buy the ticket itself.
Additionally, users may face the opportunity cost of locking their funds in a pool rather than staking or providing liquidity through a decentralized exchange.
At the time of writing, the US government is going after stacking services and experts are keeping their eyes peeled on future developments. So while staking keeps being an opportunity to earn small fees for many, it may reveal itself to be one more volatile option for earning on crypto.
Advantages for Wealthier Participants
Having more tickets increases the odds of winning, which may benefit wealthier users disproportionately.
This factor could potentially create an uneven playing field for participants which goes against the principles of this kind of lottery.
In conclusion, PoolTogether has reimagined the traditional lottery system by incorporating the benefits of cryptocurrency staking and DeFi. This innovative platform provides users with an opportunity to save, participate in prize pools, and potentially win substantial rewards, all while maintaining control of their assets.
With its provably fair and secure system, along with features like Pods that enhance user experience, PoolTogether is well-positioned to make waves in the DeFi space.
As digital lotteries gain more and more traction worldwide, it will be interesting to observe how innovative Web3 lotteries like PoolTogether will position themselves in this much competitive environment.