PoolTogether Jackpots

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Summary:

Discussion about the Implementation of accruing stablecoin Jackpots.

Motivation:

Currently the entire generated interest is fully redistributed to winners weekly, so far not allowing for accrual of a truly sizeable prize pools. In traditional lotteries, the number of participants correlates with growing size of the Jackpot (refer to the crazy Spanish Christmas lottery, EuroJackpot or Powerball). To unlock further potential of PoolTogether and add an attractive feature, it should therefore be considered to implement accruing Jackpots to the stablecoin pools, cutting a specified percentage from the running stablecoin prize pools until the Jackpot reaches a pre-defined threshold/cap and gets drawn.

In addition to raising more awareness and attracting more users, the Jackpot could serve an additional purpose. An often raised concern is that PoolTogether might be beneficial to whales even if the odds of winning are the same per ticket. This perception is amplified by the fact that most weekly winners tend to be large ticket holders. To attract and reward smaller participants, each wallet could only participate once in the drawing of the Jackpot, regardless of amount of tickets.

Jackpot Design:

The below overview helps to assess the current value accrual potential:

PTJackpot

For example, applying a 5% cut on a weekly prize pool in amount of $20k (comparable to current state), this would allow to add $1,000 per week to a Jackpot contract. After 10 weeks, this gives all participants the opportunity to win $10,000 and represents a high value proposition in particular for smaller ticket holders. Applying a slightly higher cut and assuming the Assets under Management (AuM) keep growing, larger Jackpots can also be in reach. The Jackpot size could be revisited from time to time through governance proposals (wen $100k?).

Such a Jackpot could be implemented for both currently featured stablecoin pools (DAI + USDC). Re-deploying of the funds held in the Jackpot into Compound needs to be assessed from a cost/benefit perspective in light of currently high gas fees.

A mechanism to determine eligible users needs to be worked out. My initial thoughts on this would be to limit the participants to ticket holders who did deploy prior to the draw of the previous Jackpot. I.e. everyone would be eligible for the first Jackpot, whilst for the second Jackpot only users who deposited before the first draw are qualified and so on. This also creates an incentive to remain a long-term depositor in PoolTogether.

For:

  • Large Jackpots naturally attract more participants
  • Drawing of Jackpot can be done in an event format and used for additional marketing, especially when they reach a proper size
  • Instrument to honor smaller ticket holders through a fairness mechanism (1 ticket per wallet)
  • Creates stickiness with depositors

Against:

  • Deviation from 1 Ticket = 1 Chance may be perceived as unfair (but mitigated by only a small percentage cut)
  • Reinvestment of funds in Jackpot may not be feasible due to gas fees to deposit smaller amounts into Compound weekly, resulting in inefficient use of capital

Looking forward to your thoughts and winning the Jackpot!

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Awesome post. I like your line of thought on all of this.

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This is great! Huge prizes and payouts have always been the main draw of these kinds of games. If a ticket holder can’t dream huge about a life changing event, what’s the fun?

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Nice analysis; I have a minor suggestion for a modification, though - instead of rising to a pre-defined threshold (like 10k), use the RNG to give a 10% chance per week that someone wins the accrued jackpot. This will allow the jackpot to grow organically and also add a bit more excitement to each weekly drawing.

While I like the idea that each wallet can only win the jackpot once, someone could pretty easily split their deposit into multiple wallets. Maybe gas price will discourage this, but I doubt it will discourage whales much.

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This jackpot idea, paired with a ticket holder threshold could be an interesting way to develop a “kiddie pool”.

Kiddie Pool:
Say maximum number of tickets held by a wallet is 1,000.
A portion is held for a quarterly jackpot.
The usual process occurs where 3 or 5 or whatever number can win grand prize and runner up prizes.
Rinse and repeat until quarter end.
Jackpot is drawn where each wallet effectively has one ticket - this could even be split into the grand prize and runner ups I suppose.

The usual con it here that a whale could create multiple wallets and contribute the maximum wallet size multiple times. There’s a real thing but there’s also a lot of “bookkeeping” that would need to go into that I think. Also I’m just really biased towards finding a way to help out the little fish as much as possible.

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I updated the prize pool assumptions given the rapid increase of them.

unknown

At current rate it would be easily possible to cut weekly $2,500 into a Jackpot at a cut of only 5% of the respective stablecoin prize pool. After 10 weeks, this would create a $25k Jackpot.

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I literally wanted to post something like this… But I first made 3 other posts.

This could also be connected to the topic in my other post

for the verification that can make you eligible for the 1 ticket chance of winning the jackpot

But overall its almost exactly what I was writing. But you were faster. Good work and keep up with the amazing ideas.

Yours sincerely,

Richard Jansma
Empowering the vision and possibilities of everyone and anything
RichardJansma.nl & RichardJ.nl
ETH: 0xa9196E531aE237B3edFE0B10299932CfD5dd494B
Opensea: RichardJansma

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I definitely like the idea of the jackpot! Whether or not it should be “1 chance per wallet” is up for debate, but I think with a cut of 5% that could work, as it doesn’t skew the chances that much. Who would implement the code for this proposal? @Leighton does the core team have development capacity to offer? If a member of the community implements it, they could get rewarded with POOL tokens for their work.

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I’d be wary about skewing the pot odds for the whale to limits that are under what they would get from the interest source (compound). A plan for that is paramount before we can do any of these product offerings like jackpots, charities, etc. My main focus is what pooltogether will be providing a year from now, or when it has burnt through a lot of it’s pool reserve. So, roughly speaking, if we can somehow have it such that depositors in pooltogether have 20% better pot odds than they do just using compound I think we are in a great position. That would be possible if we were taking 20% from the prize pools now; effectively doing a token raise from users. But when the Pool rewards are turned off we can turn that reserve way down because we will be in a great position and more attractive for future depositors over the interest source.