PoolTogether is an Ethereum application that has turned saving money into a game. It is an entirely new concept that combines blockchain technology and Decentralized Applications (Dapps) with the aim of creating an open-source and transparent financial service ecosystem. Players can join the game by buying saving tickets, and at the end of each week a few winners get the pool prizes. All players get their tickets back regardless of whether they win or lose.
Using PoolTogether is simple – you need a wallet that supports the accepted cryptocurrencies of the pool, some ether (ETH) to pay for gas fees, and you can then enter the game. Four different pools are currently available; DAI, USDC, UNI, and COMP. Each ticket costs one token and players can buy as many tickets as they want. Funds in the pool are sent to DeFi lending platform Compound Finance , where they accrue interest for a period, and at the end of the week winners are chosen at random. PoolTogether is often referred to as a no-loss lottery, and no one can ever lose their funds.
In February 2021, PoolTogether also launched its governance token called POOL. 42.46% of the total supply was distributed to early PoolTogether depositors, including all three versions of the protocol V1, V2, and V3. The remaining 57.54% is currently in the POOL Token Treasury, which will be used and distributed according to the token holders’ proposals.
PoolTogether is a powerful example of what can be achieved with an open, permissionless financial system. It demonstrates how Decentralized Finance (DeFi) can help unlock diverse use cases, such as charity and crowdfunding, that may not have been previously been possible. There are a few potential downsides of using PoolTogether, such as it favoring big players, high transaction fees, and the risk involved in locking up funds in a smart contract. Despite this, PoolTogether is a great example of how DeFi can revolutionize the financial services sector.
