Imagine playing lottery every day with prices of several thousand dollars 💰
There is just one catch: you don’t have to pay for the ticket 👀
Enter a new kind of lottery powered by Web3 🧵👇
1| Lotteries perfected exploiting the weaknesses of the human mind.
There are two major cognitive biases at play:
1. Loss aversion 😧
2. Near miss 🎯
2| Loss aversion: Taking 10$ from us feels disproportionally more painful than the pleasure of getting 10$.
When the numbers are drawn and your ticket becomes worthless, you want to make up for your loss.
3| Near miss: Nearly losing feels much worse than losing by a wide margin.
24 got picket, but you crossed 23 on your ticket? You were so close to getting it right.
4| These two biases can cause people to spend money they don’t have on games they are unlikely to win.
Why not devise a lottery that doesn’t game our shortcomings? Enter @PoolTogether_
5| PoolTogether is a fully transparent no-loss lottery.
All of the fun, none of the gambling.
Here is how it works:
6| All players buy tickets to enter the lottery.
1 Dollar, 1 Ticket 💵🎟
Here is the trick: Buying the ticket just means lending money - you will get it back!
7| The money spent on the tickets is put to work to earn interest.
In Web3 this means returns of 5-20% and sometimes more 👀
But how exactly is the money “put to work”?
8| If your favourite government needs money for some big infrastructure projects, it sometimes needs liquidity to pay for them.
You can chip in here and lend your money to it - this will be rewarded with interest 💰
9| Cryptocurrencies have a similar issue: to make everything work, they need liquidity.
If you are willing to provide your tokens for this, you will be rewarded all the same!
10| So PoolTogether takes all the ticket money and lends it to your favourite Cryptocurrency.
And this will earn some good interest 👌
11| The interest earned forms the price pool.
Every day, a pre-defined set of prices is awarded to randomly chosen lottery tickets 🏆
12| The best part: The prize-money doesn’t come from the ticket, but from the interest.
If you don’t want to play anymore, you take your money and go 👋
13| “But there is no free lunch!” 🍽
You are right of course - there are actually two fees:
Gas fees and Early-out fees
14| 1. Gas fees.
To participate you need USDC on Ethereum, Polygon or Avalanche.
Depending on how you deposit them, you’ll have to pay different amounts of gas.
15| 2. Early-out fees.
For the ticket money to earn interest, it needs to stay for a bit.
If you want to withdraw it earlier than after 10 days, you pay a fee
16| Ok, so where is the lottery? I still want to gamble 😁
Every day, when the winning tickets are drawn, you can check whether you hit the jackpot 🎰
17| If you weren’t lucky that day, tomorrow is another day.
Because all your tickets are still valid and will work for you just the same the next day 🙂
18| So if the interest of your savings account is little to non-existent and you are looking for some crypto-lottery:
@PoolTogether_ is for you!
If this helped you to understand something better or different, re-tweeting or liking the first tweet would mean a lot to me ❤️
If I got something wrong or you have a question, please let me know 💬
If you want to read more of this, my goal is to write 1 Thread every week of 2022.
In simple language that anyone (in particular, me) can understand.
twitter.com/CordtMinzer/status/1477305115254177796?s=20
PS:
If you are interested in the psychological biases that are at play when gambling, I recommend “The Psychology of Human Misjudgement”, which you can read up on @farnamstreet’s great blog.