My-Chance Prize Bonds- A lottery system without gambling.
An article explaining the My-Chance NFT Prize Bond system. The world’s first global prize bonds.
Introduction
My-Chance is a gamified savings protocol built on Avalanche, the Eco-friendly platform for smart contracts and decentralised applications. A protocol that combines decentralised finance and collectable NFTs with a mission to further social and environmental preservation and development.
Background
My-Chance is the next evolution of Prize Bond systems. Prize Bonds also known as Premium Bonds are a non-interest-bearing savings instrument. Interest accrued by a collective saving together is returned to bond owners in the form of prizes. Prizes are distributed to bond owners by random selection of bond identifiers through a lottery process. Since the 1950’s traditional systems have been implemented on a national level in places such as Ireland, the UK, France and Pakistan. In these systems, users purchase paper bonds, which can later be redeemed for their original value, at the post office or directly from the issuer.
Recent developments in decentralised networking and decentralised finance have allowed Mycelium Network, the team behind the protocol, to improve upon a proven concept. What has been developed is a more efficient system, accessible by a global audience. A system that gives users the chance to win regular and special prizes, while furthering their positive social and environmental impact, without incurring any cost.
Taking Part
To participate users deposit digital assets such as stablecoins and acquire a Prize Bond in the form of a non-fungible token (NFT). Each Prize Bond NFT is primarily a proof of deposit and guarantee of redemption. Additionally, each Prize Bond NFT contains information that is used in the prize distribution process.
When a deposit is made it is transferred directly to Aave a secure, non-custodial, decentralised finance platform which allows users to lend and borrow digital assets. Aave specializes in providing over-collateralised loans. Individual deposits from members of the collective form a non-custodial prize generation fund. Savings deposits are secured by the protocol and can be withdrawn at any time by the Prize Bond NFT that was created upon deposit.
The collective prize generation reserve generates interest on Aave. The interest generated by the collective is redistributed amongst individual Prize Bond holders as prizes in both regular and special lottery draws. A portion of interest is also designated to supporting social and environmental causes. On a weekly basis, a lottery is called using Chainlink Keepers and executed using Chainlink VRF. As soon as a winner is selected the prize fund for that draw is locked to the winning Prize Bond NFT. The Bond owner can claim their winnings whenever they choose.
Collectable artwork
Each My-Chance Prize Bond NFT is also a collectable composition. When a Prize Bond is created an artwork is selected at random from a database of limited editions. Some editions are more numerous than others. The most limited edition to date is limited to 10 bonds per asset class.
When a Prize Bond NFT is created a composition is selected and removed from the database of available artworks and attached to the Prize Bond NFT. During this process additional information is added to the bond artwork; the sum of assets deposited by the bond creator, the Prize Bond ID and the address of the smart contract which created it. The finished bond image and accompanying JSON file is then recorded on the Interplanetary File System (IPFS).
Burn Baby Burn
At My-Chance we want you to burn your NFT. This may sound unusual to those familiar with collectable NFTs. Each time an NFT is burned it benefits those who hold a similar artwork. For example, if an artwork is limited to 10 editions and a holder burns one it leaves 9 in existence, increasing the rarity of remaining artworks which benefits the remaining holders. As the most widely produced artworks are also those which are most likely to be burned it creates an interesting possibility. Over time, those which were initially the most numerous may number less than any other type. In other words, a common Prize Bond NFT may become a very rare Prize Bond NFT.
My-Chance Prize Bonds summary
No loss Prize Generation: Prizes are generated through redistribution of collectivised interest, your savings are never at stake.
Non-custodial: My-Chance is a non-custodial automated process, operating through the use of smart contracts and other decentralised network infrastructure.
Efficient: Built on a platform that is energy efficient. Vastly reducing the overheads of traditional systems. Eliminating the environmental cost of traditional paper Prize Bonds.
