Jon Jordan takes a deeper look at PoolTogether
PoolTogether is one of the most interesting blockchain products, both in terms of its features and particularly its underlying psychology.
Best described as a mash-up between personal decentralized finance (DeFi) and a group lottery. PoolTogether works by accumulating the interest from all its ticket holders and regularly – daily or weekly – rewarding it to one ticket holder.
In this way, it attempts to balance the thrill of potential – if unlikely – wins. With the more general warm feeling that your presence – however small – is making someone else happy.
The main prize pool is based around the DAI stablecoin, which is worth $1.
Each entry ticket requires you to stake one DAI token. Hence each ticket in the pool generates a small amount of interest from the DAI staked. This is all combined together, and the total is awarded to one ticket on a weekly basis. Hence the term PoolTogether.
You can sell your tickets and reclaim the DAI you deposited immediately and at any time.
PoolTogether video review
Obviously, the prize total is dependent on the number of tickets generating interest and the interest rate. This is the case of DAI has declined significantly during 2020.
And that’s why the weekly prize in PoolTogether has dropped from well over $1,000 to around $300 at the time of writing.
There’s also a much smaller daily prize pool using the USDC stablecoin, and even a legacy prize pool using the original DAI stablecoin (now called SAI).
Yet the point of buying tickets in PoolTogether isn’t really about winning. Unless you put in a lot of DAI, your chances of winning are very low – currently, 1 in 500,000 per ticket purchased.
The developer is attempting to improve this situation by launching the Pod feature. Here users will be able to create groups to combine their tickets hence improving the odds of winning. While obviously also sharing the prize between all ticket holders in the group.
You can check out how it all works at the PoolTogether website. All you need is some DAI (or USDC) and an Ethereum wallet such as Metamask.
But, as ever, remember these are experimental products and you should never spend more tokens or value than you are prepared to lose.