Diving Into The DeFi Lottery With PoolTogether
Even though we just entered the fall season, things in DeFi keep getting hotter. How about cooling down with a platform that incentivizes you to save while satiating your scratch-off ticket itch inside? PoolTogether is an open-source and decentralized protocol for no-loss prize games. Here’s how you can play to get a share of $95,000+ awarded to members weekly.
PoolTogether was founded by a team including Leighton Cusack that capitalizes on the notion of prize linked savings (PLS) that has existed for the past 400 years.
As Cusack states, one modern example of this in action is “Premium Bonds,” which pays out millions of dollars in monthly prizes from the annualized yield that is accrued.
Prize linked savings incentivizes you to save and build positive financial habits. You can think of it as satisfying your psychological desire to WIN BIG by SAVING SMALL.
And when you combine that age-old mental model with Ethereum, it gets even more exciting.
PoolTogether groups funds into their deposit that accrues interest over a certain time frame and then rewards one or a few accounts with this accrued interest each week as the lotto prize.
I’m Psyched. What’s Next?
So you’re sold on the idea of a no-loss lottery because, well, how can you lose? Here’s how to start playing.
First, you’ll need to connect your wallet. You can download MetaMask, the easiest and most trusted wallet to start foraying into the world of Web3 instantly.
Remember to practice good security with your seed phrase—store it safely, in multiple places, and NEVER give it to anyone.
Done? Huzzah! You’re ready to start interacting with PoolTogether.
Once you connect your wallet, it will look like this:
As you can see, there are pools and pods available to shimmy into.
At the time of writing, there are 13 pools across the Ethereum, Polygon, Binance, and Cello networks. For purposes of this article, I will focus on the pools available in Ethereum, where you can deposit USDC, DAI, COMP, SUSHI, POOL, UNI & GUSD tokens.
PoolTogether’s pods allow you to group your deposits to increase your chances of winning. DAOs can use this as a fun way to collaborate and potentially earn big.
You have a range of options to choose from. If you don’t have any of the pool’s tokens in your wallet currently, you can use MetaMask’s swap functionality directly in your browser.
In this example, let’s go the OG route and blow up our floatie for the DAI pool. Entering into the pool will also earn you a 6.78% APR in POOL, PoolTogether’s native token.
Not too shabby, considering your average savings account in traditional U.S. banks earns you 0.04% APR.
Once you have DAI in your wallet, you’re ready to deposit and save.
Entering your amount will also automatically compute your winning odds. Once you hit “Continue” you will have to deposit and approve your transaction in MetaMask. PoolTogether asks that you maintain a 10 day minimum deposit period, or be subject to a 1% or less fee.
And you’re in! That’s how simple it is to play the DeFi no-loss lottery.
- Download MetaMask
- Connect your wallet to PoolTogether’s app
- Pick a pool or pod (if you’re in a larger group, you might want to consider the pod)
- Swap tokens to get into the desired pool
- Deposit tokens
- Sip on your mojito and relax in your flamingo floatie (optional)
Once you deposit your money, you’re automatically re-entered into each week’s drawings. That means, while you save, you have the chance of winning thousands of dollars.
PoolTogether is a simple concept to grasp for many. You can’t lose—if at any point, you want to withdraw your deposit, you can. And you’ll have earned more at the end of it with the savings feature.
I personally thought this was a brilliant DeFi app and told my family abroad about it who had NEVER done anything crypto-related. They were intrigued and I walked them through how to join, witnessing firsthand how an app like this generates instant interest.
Could dapps like PoolTogether be the gateway to understanding the ever-changing landscape of DeFi? Perhaps this obvious money lego will incentivize more people to save for a rainy day.
If you’re ready to explore another dapp, consider giving PoolTogether a shot and maybe tell your non-crypto friends about it to gauge their reaction. After all, no one wants to go to a pool party alone.
This article is intended for informational purposes for beginners participating in Web3 and DeFi via MetaMask. The contents of this article are not to be construed as legal, business, investment, or tax advice. You should consult with your advisors for all legal, business, investment, and tax implications and advice. ConsenSys is not responsible for any lost funds. Please use your best judgment and practice due diligence before interacting with smart contracts.