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PoolTogether

PoolTogether is a no-loss, audited savings game powered by blockchain technology. PoolTogether players sacrifice interest they could have earned on holdings of the stablecoin dai in exchange for a shot at winning the interest of everyone else in the pool[1].

In February 2021, PoolTogether launched its own native token, POOL, and airdropped it to over 17,072 unique wallet addresses[2].

Overview

On PoolTogether, each ticket sells for 20 Dai (the stablecoin generated by the MakerDAO protocol, which aims to keep a stable price at $1.00 each). Each pool sells as many tickets as it can, and all the Dai gets put into the Ethereum-based money market protocol, Compound.  There, all the ticket money collects interest over the life at the pool and at the end, one ticket earns all the interest off everyone’s ticket price.

In February 2020, PoolTogether surpassed 2,000 users and 1,000,000 Dai.  Also in February, the company raised $1.05 million from IDEO CoLab Ventures, ConsenSys Labs and DTC Capital, based on a SAFE (Simple Agreement for Future Equity)[3].

PoolTogether is one of the first and most widely used decentralized finance applications. It is a service that also allows users to stake cryptocurrency into lottery pools for a chance to win a significant weekly prize pool. The prize pools are made up of accumulated staking fees, and users can withdraw their full original deposit even if they don’t win.

Pods

In April 2020, PoolTogether released pods – collaborative no-loss savings tools. It allows PoolTogether players to link their tickets and increase their overall chances of winning. If any ticket in the pod wins, the prize is split proportionally to everyone in the group based on the amount they contributed.

While the payout per person will be less than single tickets, the increase in odds of winning creates an incentive for users to band together. Joining a pod does not exclude users from getting tickets for the main pool. Users can allocate however many tickets to a pod that they would like while still keeping some moonshot tickets for themselves on the side[4].

The pods code is open source and has been audited by OpenZeppelin. Going forward, the PoolTogether team plans to add tools for anyone to easily create their own pod[5].

POOL Token

In February 2021, the POOL token went live and concluded a multi-year process of progressive decentralization creating the open-source, decentralized, and permissionless protocol for no loss prize savings, PoolTogether[6].
wikiPOOL Token

The POOL token exists to govern the PoolTogether protocol. Any changes to the protocol will be proposed and voted on by POOL token holders. These proposals can include things like adjusting the number of winners, launching new prize pools, integrating new yield sources, implementing scaling solutions, and controlling the future distribution of POOL to protocol contributors.

Token Distribution

wikiTokenomics

The POOL Token is being freely distributed to all contributors to the protocol. The total POOL token supply is 10,000,000. After a four-year waiting period, a 2% yearly inflation can be implemented if token holders choose. The following is the initial distribution:

  • 14% of total POOL supply distributed to all POOL depositors across the V1, V2, and V3 protocol up until January 14th, 2021, at midnight UTC. This is 17,072 unique addresses.
  • 12.44% of total POOL supply distributed to early core team contributors (locked for one year).
  • 7.52% of total POOL supply distributed to PoolTogether Inc investors (locked for one year).
  • 5% of total POOL supply allocated to an initial 14-week depositor distribution.
  • 2.5% of POOL supply allocated to onboarding and education of new users.
  • 1% of total POOL supply distributed to addresses that voted in the first two snapshot governance votes and held a PoolTogether deposit at the time of voting.

PoolTogether is backed by some of the top venture capital firms in the world which allows users to focus on building an excellent open-source and decentralized protocol.  PoolTogether provides a low-friction onboarding experience for new users and infrastructure that can scale[7].

How PoolTogether Works

PoolTogether is an Ethereum-based platform that manages its reward pools through smart contracts. Reward pools are divided into two categories: those created by the PoolTogether project and community prize pools that anybody can create.

PoolTogether Prize Pools

Users can deposit USDC, DAI, UNI, or COMP tokens into one of the four main reward pools. One ticket is represented by each token placed. The total amount of the pool represents all user cash deposited into that pool for that weekly draw, and there is no limit to how many tickets a player can purchase.

Each pool is a smart contract that delivers all deposited funds to Compound Finance lending pools once a week, where they earn interest. A random number generator determines the winners at the end of the week, and they receive all of the interest generated by the pool over the week, as well as their tickets back.

Unless the user opts to withdraw their winnings, they are converted to tickets and entered into the next draw automatically. Users who never withdraw their winnings will continue to increase their chances of winning by purchasing more tickets. The game resets for the next weekly round, and everyone else gets their initial investment back. If a user does not remove their tickets, they are automatically placed into the following week's draw.

Community Pools

Anyone can put up a pool in a community. They share three key characteristics with the main Pool. Users won't lose money, they may withdraw money at any time, and there's a chance to win prizes if they join together prize pools. When someone creates a Community Prize Pool, however, they have complete control over which tokens users can deposit, how the yield is created, and how the awards are awarded.

Currently, the most popular Community Prize Pools are BOND, DPI, and ZRX. However, due to lower participation, the prizes are generally significantly less for the Community Prize Pools than the main PoolTogether pools.

Although a user can withdraw their stake at any moment, the PoolTogether protocol imposes an early withdrawal penalty to deter users from investing just before a draw and withdrawing immediately afterwards. If a player deposits and then immediately withdraws, they will be charged a penalty, which will be applied to the following draw.

PoolTogether V3.0

No-loss prize games are pools of funds whose accrued interest is distributed as prizes.

How it works

  • Users deposit funds into a Prize Pool. They receive pool tokens in exchange
  • The funds earn interest
  • The interest is distributed by the Prize Strategy as pool tokens
  • Users withdraw their funds at any time by telling the Prize Pool to burn their pool tokens

Architecture

Prize Pool

Prize pools are the foundation of all prize games. They pool user funds in a yield source and expose the yield to their Prize Strategy, which distributes the monies as needed. Prize Pools can be differentiated in four major ways:

  • The yield source the prize pool uses to generate no loss return
  • The prize strategy used to determine frequency and distribution
  • The rewards offered by the prize pool
  • The asset type the prize pool accepts for deposits
  • The fairness parameters

Prize Strategies

Prize Strategies determine the prize distribution for the Prize Pool. They can define any logic to allocate tokens that the prize pool accrues.

Builders

Builders make it easy to create pre-configured prize games. There are currently three Prize Pool types paired with the MultipleWinners. Prize Pool Builders allow users to create preconfigured Prize Pools. Builders create all contracts using teeny tiny proxies, so creating prize games is cheap

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