PoolTogether Myths
PoolTogether is a protocol for no loss prize games. It enables users to deposit money for a chance to win prizes — and keep all their money even if they don’t win. This is possible because the prizes are made up of the interest accrued on deposits. The protocol is modeled on the well established concept of “No loss lotteries” and “Prize Linked Savings” which are popular all around the world.
There are a few common misconceptions about how the protocol works this article will explain.
Only Large Depositors Win
Your odds of winning are proportional to the amount you deposit. This means large depositors have a higher chance of winning (and also contribute more interest to the prize). However, these large depositors give smaller depositors a chance to win 2x-40x their deposited value.
Here are four examples of depositors that have received 1.2x to 599x their deposits in just the last 6 weeks.
$10,336 deposited → $26,523 won
$14,700 deposited → $57,459 won
$26,578 deposited → $33,763 won
Large depositors have a higher chance to win but the amount they win is much smaller proportional to their deposits.
I don’t get my money back
PoolTogether is no loss! You will receive back 100% of what you deposit¹ whenever you want to withdraw. You have a chance to win and you are saving your money!
I need to deposit each week
No! Depositing one time will make you eligible for all prizes until you withdraw. You have a perpetual chance to win!
I need to claim winnings
No! All winnings are automatically sent to your wallet. Additionally, winnings automatically increase your chances of winning again.
I’m better off depositing into Compound or Aave
The answer to this question depends on your personal desires but it’s worth noting that due to the reserve and sponsorship the expected return of a deposit into PoolTogether is higher than a deposit into the underlying yield source. PoolTogether depositors also freely receive the POOL governance token.
PoolTogether is a lottery
No! PoolTogether is not a lottery. Deposits in PoolTogether always have a positive expected value and you never lose what you deposit. Lotteries always have a negative expected value. PoolTogether is based on the global financial product of “prize savings” and is often times called a “no loss lottery”.
There is more!
The protocol is controlled by the POOL token holders and is continuing to grow. Many projects are moving forward to lower gas costs, integrate new yield sources, launch more prize pools, and enable users to split prizes.
Is there something you’d like to see changed? Hop into the governance forum or Discord to get started!
- To ensure fairness there is an early exit penalty if you try to withdraw within 10 days of your deposit.
