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A lottery for Winners

lottery Pool Together reinvents the lottery, where no one loses money.

Pool Together is a first of its kind, Blockchain-based application, offering a no lose lottery to participants. The first thought that comes to mind is genius! no actually it’s brialiance! Before we dive into the details of this protocol, let’s review our current lottery systems.

Every country has different laws, some entirely ban it, while others allow it with governance. In the United States it is illegal to create a private lottery, unless it’s a charitable fundraiser of sorts. Every state (excluding Utah and Alabama) operates a lottery which provides a significant source of revenue for its budget. In 9 states the net revenue from the lottery exceeds corporate tax revenue. There is a strong argument to be made against lotteries, as they do more harm than good to the citizens, even though the proceeds fund public programs.

We will examine the New York State lottery as its the largest in the United States. For year 2020 the NYS lottery generated a whopping $9.741 billion, with net proceeds of $3.377 billion. Prizes of 4.6 billion (pre tax numbers) were distributed, $1.4 billion in retailer commissions, $225.6 million in gaming contractor fees and 130.5 million for administrative expenses. This paints a clear picture that state lotteries are popular and profitable.

The odds of winning are very low

, in fact, statistically it’s more likely to be struck by lightning multiple times then win the lottery. Per the CDC.GOV, the chances of being struck by lightning are 1 in 500,000 for a given year. According to Lottery USA, the odds of winning the Mega Millions jackpot are 1 in 302.6 million and the odds of winning the Powerball jackpot are 1 in 292.2 million. These two lotteries are offered across multiple states offering the highest reward and lowest chance. Yet with these very low odds, people continue to spend money on a miniscule chance of winning. And it gets worse, according to the National Endowment for Financial Education, about 70 percent of people who win a lottery or receive a large windfall go bankrupt within a few years.

 

lottery

 

Now let’s turn our attention to a lottery

worth participating in. A lottery for winners. Pool Together is a self governed protocol available on Etherium, Matic, Celo, Xdai and Binance Blockchains, which allows participants to deposit a variety of cryptocurrencies and be included in a weekly drawing for a prize. At any time, a depositor can withdraw their funds and will be removed from the lottery. There is no lockup period, and the principal amount deposited is always returned. How does this work you might ask, it sounds too good to be true. The protocol uses yield sources such as Compound, Aave and Yearn to generate yield for the weekly prizes. The prizes are raffled off amongst all depositors, with the odds being in accordance to their percentage of total deposited assets. In short the interest on all the participants/depositors are distributed back via a lottery. Therefore allowing everyone to keep their principal intact while possibly earning a large sum of money. Many pools split the winning amongst multiple winners, further increasing your odds of taking home a prize

As of today 9/19/2021, Pool Together has a total deposited amount of 134.41 Million with a weekly prize of 87,696. The collective Annual Percentage Yield on deposits are 3.4%. (87,696 multiplied by 52 = 4,560,192 which is 3.4% of 134,410,000). The yield rate on each pool is typically different as its tied to the market yield being offered on that particular coin. This effects the prize size in relation to total assets deposited, but would have no impact on ones statistical chances of winning.There are some risks associated with participating, however very small they are, it should be made aware of. 1. Protocol Dependency Risk, Pool Together uses a public blockchain which hosts the smart contract, and the yield generating platforms discussed earlier. 2. Smart Contract Exploit Risk, if a smart contract fails, due to a bug or security issue. All contracts are audited by third parties in addition to a bug bounty program which offers 25,000 reward for reporting a bug, instead of attempting to exploit. The risks here are typical in the blockchain space and are not a concern to me.

Personally, I don’t enjoy gambling, because the odds are terrible, and loosing money is for losers. Pool Together on the other hand, offers the upside and excitement of potentially winning, while your protected against losing your principal. It is worth noting the upside is significantly less, but your odds are also greater. In addition, I think it’s healthier to win 15K then millions, since statiscally it has ruined most winners lifes. I look forward to winning my first prize on Pool Together.

The complexities of DeFi applications like Pool Together highlight the importance of professional cryptocurrency accounting. With unique mechanisms like yield-generating protocols and varied crypto assets, accurately reconciling crypto transactions demands specialized knowledge. This is where OnChain Accounting’s expertise becomes invaluable. We ensure that all transactions, including potential earnings from platforms like Pool Together, are accurately recorded and accounted for. This precision is crucial not only for personal financial clarity but also for compliance with crypto taxes. Utilizing advanced cryptocurrency tax software and tools like crypto tax calculators, our team navigates the intricate landscape of crypto accounting and other cryptocurrency accounting requirements. In a domain where financial regulations are constantly evolving, our proficiency provides peace of mind and ensures that our clients’ financial records are both accurate and compliant.

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