Have you ever heard of the ‘no-loss crypto lottery PoolToghether?
How can you lose in a lottery without actually losing anything? Let’s see how the phenomenal ethereum-based lottery platform that is taking the crypto community and the internet by storm works.
Where does it come from?
It all started with decentralized finance (Defi), which is somehow similar to blockchain technology in some ways since it draws inspiration from it. For instance, they both are designed to remove intermediaries between transacting parties. However, there are some major differences between the two. Defi was made for more complex financial use cases and expands the use of blockchain. Decentralized finance utilizes smart contracts and allows users to do almost everything from lending or borrowing funds to staking funds in liquidity pools to enable trading.
Now that we know where it comes from, let’s get to the point!
PoolTogether is, in reality, a combination of crypto staking and traditional lottery systems in which, users sacrifice a smaller
amount of potential yield for a potential jackpot. In this ethereum-based lottery, users are required to deposit cryptocurrency into pools to buy tickets. Each pool holds a weekly drawing, awarding a prize pool to up to five lucky winners. By depositing funds into pools, users are staked via Compound (a DeFi platform) and generated interest is used for the lottery rewards.
Don’t get confused yet, here comes the interesting part! It does not make much sense on the surface but as much as it sounds unreal, it is real!
If you purchase a ticket, you have a chance to win a stash of crypto right? But what if you lose? Well, a better question would be ‘do you lose at all? No! Aside from the money you pay for transaction fees to enter, you literally can’t lose your money even if you want to, which you don’t! This is how things work in PoolTogether; if you lose the drawing, you don’t lose any of your money and your tickets do not expire. Instead, they keep rolling over to the next drawing again, and again until you win or decide to withdraw all of your money from the pool. You will have to pay transaction fees to enter or exit and as long as you keep your money in the pool, you will be continually entered in the weekly drawings.
From a different approach, you are being rewarded for holding onto your crypto funds rather than simply spending them. Plus,
they say fortune smiles upon those who are willing to take risks.
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