NFT raffles are extremely popular in Web3, as evidenced by the constant stream of raffles that are being hosted on raffle platforms 24 hours a day, 7 days a week. They’re no doubt fun precisely because participants have the opportunity to win big with a relatively small wager.
But are they really worth it?
The answer to this lies primarily in how you’re getting involved — as a host or as a participant.
We’ll discuss the latter first, since most fall into this category.
Raffle Ticket Purchaser
As a raffle ticket purchaser, you’re usually severely disadvantaged when you participate in any sort of raffle – even if you buy multiple tickets. The prospect of winning an expensive NFT with a relatively small wager is understandably tempting indeed. Unfortunately, it is often the case that this gamble is simply not worth it. The odds are severely stacked against you – and some quick math can easily reveal this.
Many raffles have far more than 100 tickets sold when the timer hits 0. So based on a typical 100-ticket raffle, purchasing one single ticket (which may not have been necessarily cheap to begin with) would only give you a mere 1% chance of winning. This means that if you were to participate in 100 of these raffles with one ticket each, you’d probably win only once. The more superstitious among us may feel that they’re “eventually winning” after losing many times. Unfortunately, in reality, this is not the necessarily the case since every new raffle presents a brand new set of probabilities. Just because you’ve lost the last hundred raffles, it doesn’t mean that you will win the next one. In fact, probability states that you’ll lose the next one as well. You can (and many will) lose every single raffle that you’ll participate in in your lifetime. If such a situation turns out to be the case, then you might as well have pooled all the money you’ve spent on raffles and bought an NFT of your choice outright.
Buying a few more tickets for a specific raffle isn’t likely to help much either. Increasing your minuscule chance of winning by a minuscule amount will still render your overall chance of winning minuscule. You could, of course, choose to buy a large proportion of the tickets. However, this would increase your potential risk by an equally large margin — and unless you buy more than 50% of the total tickets that are ultimately sold, you’re still more likely to lose than win anyway.
“So if the odds are so poor, why do people always seem to be winning? I’ve seen people win multiple NFTs worth 5 digits each despite only paying a small amount for one or two tickets.”
Indeed, with the exception of instances where raffle creators buy out their own tickets, almost every raffle will have a real winner.
Winners, more often than not in their sheer excitement and joy, immediately take to social media to show off their wins. They proudly boast about how little they’ve spent and how big of a win they’ve achieved.
And this is entirely justified!
Why wouldn’t you celebrate if something good happened to you? They should rightly boast and share their joy with the world. And the more generous among us may even feel some sort of vicarious joy.
Through no fault of this lucky group of happy winners, this inevitably creates the appearance that everyone is always winning. While this could not be further from the truth, it certainly works wonders in encouraging people to cast probability and mathematics aside and expect raffle wins. If all raffle losers equally shared their losses on social media every time they participated and lost, then the optics of raffle probabilities would be far more aligned with true probabilities.
However, in the same way that I don’t blame raffle winners for posting their wins on social media, I don’t blame raffle losers for not posting their losses on social media. It is unexciting, mildly shameful to some, and not much to write home about. At the end of the day, it’s down to the raffle participants to know exactly what they’re getting themselves into regardless of what they’ve seen on their feeds.
Raffle Organiser
Should you sell your NFT via a raffle? The answer to this is actually less straightforward. There are a few advantages to selling your NFT via a raffle.
Firstly, you’ll almost definitely sell your NFT when the raffle period ends – that much is a given.
Secondly, there is a reasonable probability that you’ll earn more than simply listing your NFT on the marketplace.
Thirdly, it’s far more exciting than simply selling your NFT on a marketplace.
As a raffle creator, you get to decide how many tickets in total you want to issue for the raffle as well as the price of each ticket. The less tickets issued, the higher the perception that raffle participants will have of their winning chances. The amount you earn is the number of tickets eventually sold multiplied by the price of the ticket. Therefore, it makes sense that if there are less tickets, the price of each ticket should be higher and vice versa.
Typically, when raffles sell out all their tickets, the total value comes up at far higher than what raffle creators would otherwise have earned had they just listed their NFTs on a marketplace. Sometimes, raffles do not sell out their tickets and raffle creators earn less than they otherwise would. But this is less common. A majority of the time, raffle creators get a fair amount for their NFTs even after fees have been deducted.
It is worth noting that if a raffle seems as though it is not going to sell out, and the timer is running out, don’t panic. There are often lurkers waiting to buy a big bunch of tickets right at the end. This increases their chance of winning because it makes the raffle seem less desirable up until moments before the very end. It also helps them better gauge their probability of winning based on the number of tickets they’re buying since it is unlikely that more tickets will be bought after them.
That said, and as already alluded to, the risk of selling your NFT through a raffle is the fact that you could end up getting far less for it than you’d have hoped.
Conclusion
In summary, if you participate in a raffle, you’ll most likely lose. Raffling off an NFT, on the other hand, is a reasonable option for liquidation. That said, good luck in your raffle adventures!
You’re going to need it!
Written by: Jpegtologist
