PoolTogether, the lottery where you never lose, has become a sensation. It seems like a scam, but it’s been working well for some time.
Invest a dollar and you can win thousands, this is PoolTogether, the lottery where you never lose. It’s Open Source, it seems like a scam, but it’s been working for some time, and if you lose, they return your dollar. How is this possible? Is there a scam in this mechanism? How does it work?
What is PoolTogether?
Essentially, it’s a weekly lottery, where, just like any lottery, you buy a ticket and hope to gain with the number you’ve purchased. The difference with other lotteries is that you purchase the tickets with a stable cryptocurrency, the DAI, which is on a par with the American dollar. So, 1 DAI equals 1 dollar. Plus, it doesn’t matter how many tickets you buy, because if you don’t win, you will be able to recuperate the entire amount of money you invested. In other words, if you paid for 50 tickets, (50 dollars) and you didn’t have any luck, you can have the DAI back.
How does PoolTogether, the lottery where you never lose, work?
PoolTogether runs on the Ethereum protocol. When you deposit 1 DAI, the platform goes back to several decentralized finances (DeFi) protocols to obtain interest with the deposited money. Among these investment strategies are CompoundFinance, as well as vVaults.
The interest generated by the investment strategies is what the winning user receives from the lottery. Meanwhile, losers can return their DAI and use them in the next lottery—it’s in a week, every Friday—or withdraw the money to their digital wallet.
The opportunities for winning depend on the amount of money invested in each pool. For example, if you deposit 1 DAI (1 ticket) in a pool where another 1,000 DAI (1,000 tickets), your probabilities of winning are 1 in 1,000.
An innovative lottery
The service for generating random numbers, offered by ChainLink, is used to choose the winning ticket. This way, there’s no human intervention and the lottery is completely transparent.
Before, there were additional GAS expenses for depositing the money, for using the Ethereum blockchain
. However, PoolTogether has joined with Polygon, so that it will be possible to operate in the lottery without needing to pay excessive fees for the transaction om the Ethereum blockchain.
Further, to guarantee more transparency, PoolTogether is an open code and, these days, is audited by two businesses; one is called OpenZeppelin. You never have to reveal your name or any other personal data to participate in the lottery.
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Past performance is no guarantee of future results and the value of such investments and their strategies may fall as well as rise.