Disclaimer: I own Pool tokens so I’m obviously biased. Do your own research (in other words - google it, reddit it, discord it etc.).
I had never bought any tokens or cryptocurrencies besides Ether. That changed a few days ago when I discovered PoolTogether.
What’s PoolTogether?
PoolTogether is an “open source and decentralized protocol for no-loss prize games”. Basically, you put money in, get lottery tickets, and you either win, or get your money back (actually that’s a lie, at the moment you will receive Pool tokens for just participating!).
What’s a Pool token and what’s the point?
The owners of Pool tokens govern the protocol (boring), and they own the reserve.
What the hell is the reserve?
A certain percentage of the winnings goes to the reserve. It is basically a total profit accumulated each week (at the moment lotteries happen on weekly basis) by the protocol. Last week $116,000 was accumulated in the reserve in just one week for example (https://twitter.com/PoolTogether_/status/1385706779284148224).
Let’s do some math
At the moment $223 million is deposited in the protocol of PoolTogether. Let’s assume deposits grow by 30% each year (it actually grew 5000% in the last 2 months), yields produce 12% of APR (yield sources), reserve rate (percentage of winnings that go to the reserve) is 10% (at the moment it’s 50% but I assume that’ll change). How much of reserves will be accumulated in the 5th year in that case?
223,000,000 * 1.3 ^ 5 * 0.12 * 0.1 = ~$10,000,000
Not bad. What if deposits double each year? It’ll result in $6.5B total deposits and:
223,000,000 * 2 ^ 5 * 0.12 * 0.1 = $85,632,000 increase in the reserve.
Remember, the reserves are owned by the token holders. At the moment all is reinvested (which really should happen for foreseeable future for the Perpetual Growth), but these are the total profits owned by the token holders and they (the token holders) decide what to do with it.
Okay
This is exciting. Not only I believe this project will do good for humanity (people will save more, people might gamble less), but this is a beautiful demonstration of decentralized business that can be owned by anyone and that generates net profit. How cool is that?!
Oh, and there are projects like Dharma that allow to buy tickets at PoolTogether directly from the bank. Retail is finally coming to the DeFI?!?!
If you decide to get involved, make sure to check out the possible risks: https://docs.pooltogether.com/security/risks
