PoolTogether DeFi Platform – Savings Meets the Lotto

Project Reviews / 24.10.2020

PoolTogether is a next-gen DeFi platform that seeks to transform saving crypto into a fun-filled activity. This Ethereum-based protocol is the world’s first and most popular no-loss savings game. No-loss savings games combine multiple DeFi applications to accomplish their unique processes. Consequently, PoolTogether is a pioneer in DeFi composability.

DeFi Composability

Composability is a term that refers to the combining of different components within a system to meet any specific use case requirements. Due to the standardized and open approach found in the DeFi sector, developers can combine endless platforms to create new and previously impossible financial products and services. The main benefit of composability is that it allows DeFi developers to focus on their core business logic by leveraging a decentralized, permissionless, censorship-resistant infrastructure.

What Problems Does PoolTogether Attempt to Fix?

Saving crypto is boring, especially when you first start. There are little savings to accrue interests, so you are left just stacking crypto slowly over time. If you expect to earn any significant passive income from your crypto savings, you are going to need a decent amount of holdings. This lull between saving and earning significant interest could take years. PoolTogether proposes a better solution.

The current DAI savings payout is approximately 5% APR. While this is respectable, it’s nothing for small account holders. PoolTogether provides users the chance to earn significant rewards and excitement via its unique composability and functionality.

All Contest No Winner

Another major issue PoolTogether attempts to eradicate is the massive difference between winners and losers in most major contests. In most scenarios, people pay to enter the contest by droves hoping to be one of the lucky few winners. PoolTogether flips this model on its head with endless winners.

How Does PoolTogether Work?

PoolTogether introduces a new type of savings platform. The developers behind the project wanted to create a more entertaining and democratized savings algorithm to serve the market. PoolTogether allows users to pool together their DAI to create a larger interest generating account.  The interest from this massive account is then distributed via daily prizes to one lucky user.

PoolTogether provides users the ability to sacrifice their minuscule interest for a shot at winning the interest from the entire pool. Notably, the DAI pool reached $1 million in locked-in crypto for the first time recently. This level of savings means that winners can look forward to $1228 in rewards weekly, according to their website. All funds allocated in the PoolTogether system go into the Compound protocol where borrowers pay for access to it. 

Automated

The entire PoolTogether system is built to be transparent and trustless. Smart contracts make the process permissionless and streamlined. Also, the platform is non-custodial. Non-custodial platforms are generally more secure because they never hold the keys to your crypto. 

Pool Flexibility

PoolTogether, users enjoy incredible flexibility in terms of when and how they interact with their pool savings. For example, you can enter and exit the pool whenever you deem fit. This streamlines the entire process and eliminates the need to manage your holdings every week.  

DAI

DAI is stablecoin. However, unlike Tether, this unique financial instrument maintains a soft peg to the USD from a basked of cryptocurrency holdings. There are 935,577,123 DAI in circulation currently. There will be 935,577,148 DAI in total.

Benefits of PoolTogether

PoolTogether introduces a variety of benefits to investors and developers alike. For one, 65% of Dai remains sponsored. Sponsored DAI is ineligible for the reward. Consequently, the remaining 35% of eligible Dai competes for 100% of the pool’s interest. This strategy affords users the maximum ROI.

How to Use PoolTogether

Using PoolTogether is easy. The platform features a unique Uniswap interface that puts you in control of your trading data. For every one DAI a user deposits in the pool, the player receives a ticket. This ticket is what enters them into the random rewards drawing. If you are the lucky winner, your winnings automatically deposit into your network wallet.

New Products

Recently, developers expanded PoolTogether to include the only other stablecoin live on Compound, USDC. Notably, developers launched this highly anticipated pool after seeding it $100,000 worth of USDC. Keenly, these coins are not eligible for winning. There are other major upgrades planned for the coming weeks as well.

 Version3

The v3 upgrade will allow ERC-20 tokens into the system. ERC-20 tokens are the most popular token standard in the market today. Currently, there are over 180,000 ERC-20 tokens available. The version 3 update also introduces more yield sources and prize distribution schemes in the update. Amazingly, users will be able to create new pools with their own rules. Best of all, the platform seeks to introduce more decentralization into its network. 

Smart Pool Distribution

As part of the new pool functionalities v3 introduces, users can introduce customizable prize strategies to the equation. For example, say you wanted a certain percentage of your pool’s winnings to charity. PoolTogether makes this process easy and painless.

More Rewards

There will be more chances to win rewards using the v3 protocols. Developers introduce new features such as HODLer rewards. Notably, depositors earn extra tickets when they recruit others into a pool. This referral reward is sure to drive more users to the platform.

Liquidity Mining

PoolTogether adds support for liquidity mining in this upgrade. In a liquidity mining scenario, you agree to lock your cryptocurrency up for a predetermined time via smart contracts. When the lock-up period transpires, you receive your rewards directly via smart contracts.

PoolTogether is Ready

PoolTogether’s unique business model and combination of DeFi features make it one of the unique projects in the market today. It’s amazing to see how savvy developers continue to create new and better ways to leverage blockchain-based applications. 

This latest venture is the perfect example of how the right combination of protocols can create a win-win for everyone involved. Consequently, you can expect to see more copy-cats as PoolTogether’s fun approach to savings becomes common knowledge in the market. 

David Hamilton aka DavidtheWriter is a long time Bitcoinist and cryptocurrency journalist. Currently, he has over a thousand articles published on blockchain technology. His expertise and experience makes him one of the most reputable writers in the sector.