Pool Together

PoolTogether

About PoolTogether

The world's savings protocol, run by you.

PoolTogether is a prize savings protocol, enabling you to win by saving.

1. Deposit USDC for a chance to win

2. Participate in daily prize draws

3. Withdraw your deposit any time - even if you don't win!

Every dollar you deposit gives you a chance to win prizes. The more you save, the higher your odds!

PoolTogether is one of the first and most widely used DeFi (Decentralized Finance) applications and has been live for over three years. Since its inception, the protocol distributed over $5 million in prizes to depositors. The luckiest winner so far deposited $74 and won over $40,000.

How does it work?

This is possible because prizes are made up of the interest that accrues on all deposited funds:

🏦 Users deposit into the network

📈 Yield accrues on all deposits

🏆 The yield is randomly awarded as prizes to the users.

PoolTogether is

PoolTogether is a Prize Linked Savings account powered by the blockchain. It's:

1. Provably fair

Prize draws at PoolTogether are transparent: anyone can confirm who won, when, and why.

2. Globally accessible

The protocol empowers everyone to save. It offers a level playing field where every user enjoys the same conditions.

3. Fully non-custodial

No one but you has access to your deposited funds. PoolTogether is non-custodial, meaning users can redeem their money from the pool at any time.

4. Open-source & secure

The protocol is made up of computer software: smart contracts living on the blockchain. The code is open-source for everyone to verify and validate. On top of that PoolTogether undergoes regular audits.

5. Decentralized

PoolTogether is user-owned and user-driven. Control over the protocol rests in the hands of the community holding the POOL token. Find out more about governance.

Frequently Asked Questions

Where does the prize money come from?

Prizes are generated on the interest earned on deposited funds.

When a deposit is made into PoolTogether that deposit is automatically routed to other decentralized finance protocols like Aave to begin earning interest. Protocols like Aave are "fully liquid" meaning deposits can be withdrawn at any time. Additionally, interest accrues every ~15 seconds. Anyone who borrows from Aave must deposit collateral that is greater in value than what they are borrowing. This ensures that loans are never defaulted on.

PoolTogether is a non-custodial protocol. That means no one has the ability to control the funds deposited. All deposits and withdraws are conducted automatically by the smart contracts making up the PoolTogether protocol.

Do I have to enter for each prize?

No! By depositing you are automatically eligible for all future prizes until you withdraw!

Is there any penalty to withdraw?

No! You can add to or withdraw your deposit whenever you desire! However, your chances to win are based on your average deposit size over the prize period.

For example, say you have $100 deposited for a full 24 hour prize period. That would mean your average balance for the prize period is $100. Someone else might deposit $200 halfway through the prize period. Their average balance for the prize period day prize period would be $100, even though they deposited more than you, their chance to win would be the same.

How are winners chosen? How is it fair?

The PoolTogether protocol is decentralized and open source. That means anyone can view and audit the code to verify it is fair and secure. Several professional third parties have audited the PoolTogether code.

Specifically for choosing winners, PoolTogether relies on the ChainLink VRF (Verifiably Random Function). In fact, PoolTogether is one of the featured case studies on ChainLink. The ChainLink VRF ensures that winners are chosen in a verifiably random way.

Is there an advantage to depositing early?

Yes! Your chances to win are based on your average deposited amount over the prize period. For example, say you have $100 deposited for a full 24 hour prize period. That would mean your average balance for the prize period is $100. Someone else might deposit $200 12 hours before the prize draw. Their average balance for the 24 hour prize period would be $100, even though they deposited more than you, their chance to win would be the same.

Can I lose my money? What are the risks?

Assuming the protocol operates as intended, there is no risk of losing your money. In the two years the protocol has been live no depositors have ever lost money.

However, there are still many risks inherent in using a blockchain-based protocol like this. These risks could result in losing some or all of your money. Please read the "Risks" page for more details on the specific risks you should be aware of.

Are my deposits insured?

Your deposits are not insured, however, you can purchase protocol cover here.

Prizes & Winning 🏆

What are my odds to win?

Your chances to win a prize are dependent on how much you have deposited. The more money you deposit the higher your chances to win.

Your exact chances to win dynamically change in real-time based on how many others are depositing and withdrawing. And what the prize distribution is for that specific prize pool.

How many prizes are awarded?

The amount of prizes (and therefore the total amount of money awarded) changes dynamically. The numbers displayed are projections based on current data and probabilities of winning. It is likely that actual prizes awarded will be either higher or lower in any given prize period than what is visualized.

How do I get my prizes?

1. Once a prize has been awarded there is a 24 hour cool down period before you can check your prizes and claim your winnings. This period ensures cross-chain communication has happened correctly.

2. Once the 24 hour cool-down period is completed you can check and claim your winnings.

3. Your winnings are claimed in PoolTogether tickets! This means when you claim them they are automatically added to your deposited balance. When you withdraw you'll receive the underlying USDC.

Claiming prizes must be done within 60 days of the prize being awarded. If it is not done in that time frame you will not be able to claim your prize.

What prevents someone from joining at the last second?

You can deposit and withdraw without penalty whenever you desire. However, your chance to win is based on your *average* deposit size during the prize period.

For example, say you have $100 deposited for a full 24 hour prize period. That would mean your average balance for the prize period is $100. Someone else might deposit $200 12 hours before the prize draw. Their average balance for the 24 hour prize period would be $100. Even though they deposited more than you, their chance to win would be the same.

What is the Prize Cap?

The "Prize Cap" is a parameter controlled by POOL governance that limits how much an individual wallet can claim per prize period (24 hours). Currently, it is set to 1 but it is adjustable by POOL governance.

It's important to note you automatically will claim the largest prizes possible. So when the Prize Cap is 1 you will be able to claim the largest prize you win per period.

What is the "Prize APR"

The prize APR serves as a rough approximation of what type of returns you can get by depositing into the protocol. It's meant only to give you a ballpark number and it changes based on a number of variables. Your actual realized return on your deposit will vary significantly based on what prizes you win. The prize APR is calculated by taking (Daily prizes * 365 / current deposits)

PoolTogether's projected prize APR is higher than it is for the yield sources. That is because prizes are currently incentivized by the protocol's treasury. The goal of this is to kickstart the initial launch, over time it is likely to get reduced (decided by the POOL token holders) until we reach full sustainability.

How long do I have to claim my prizes?

Prizes must be claimed within 60 days of them being awarded. Unclaimed prizes will no longer be claimable after 60 days.

Governance

Control of the PoolTogether Protocol rests solely in the hands of the community holding the POOL tokens.

The POOL Token

POOL is the governance token of the PoolTogether protocol. Control over the protocol rests solely in the hands of the community holding the POOL tokens. The primary duty of POOL holder governance is to ensure the growth of the protocol by managing the protocol parameters properly. Those parameters are:

• Manage the distribution of the POOL token

• Manage the protocol treasury

• Determine parameters of prize pools (i.e., how many winners per week, prize size, etc.)

Anyone holding or delegated 10,000 POOL tokens can submit changes to the protocol. Once a change has been submitted, it is voted on by POOL token holders. You can read more about how to submit governance proposals and how voting works here.

How Governance Works

Changes to the PoolTogether protocol are submitted as governance proposals. Anyone who either holds 10,000 POOL tokens (0.1% of total supply) OR has 10,000 POOL tokens delegated to them can submit a governance proposal. Once submitted, governance proposals are voted on for five days. After this period, if the majority of votes are in favor AND at least 100,000 votes have been cast in favor, the proposal will pass. There is a two-day “timelock” before the proposal is actually implemented.

Voting

PoolTogether governance exists on the Ethereum blockchain and is not limited to the Pooltogether.com website. There will be many different interfaces you can use to view governance proposals and vote. However, it will also be supported on the “Vote” tab of app.pooltogether.com. Whenever a proposal is live, you can cast a vote there.

Delegation

If you hold POOL tokens but don’t want to actively participate in governance you can delegate your voting power to others. This action keeps the POOL tokens in your wallet but allows someone else to vote for you.

If you’d like to have more voting power, you can announce yourself as a Delegate on Sybil.org to allow others to delegate to you. This is a great way to have a bigger voice in governance.

POOL Token

The POOL token controls the PoolTogether protocol to ensure decentralization and community ownership. Token holders manage protocol parameters to promote growth. Read about tokenomics and governance.

Tokenomics

Growth Flywheel

The key to PoolTogether's growth and long term sustainability is large prizes. Large prizes attract more deposits which create bigger prizes attracting more deposits. This is the growth flywheel for PoolTogether.

The PoolTogether protocol will reach escape velocity when

1) Prizes are large enough to organically attract new depositors and

2) depositor consistently win enough small prizes to remain engaged and economically better off than a traditional savings account.

However, the protocol has a "cold start" problem. Large prizes are needed to get deposits but to get deposits we first must have large prizes. Two mechanisms help overcome this, reserve capture and POOL token distribution.

The POOL Token & Kickstarting the Growth Flywheel

The POOL token solves the cold start problem. At the early stages, the distribution of the POOL token serves as an additional incentive to deposit into the protocol when prizes are not yet large enough to achieve escape velocity. People initially deposit primarily to receive the POOL token but these deposits create larger prizes and grow the reserve. Larger prizes begin to trigger organic growth. As organic growth increases and becomes self-sustaining the distribution of the POOL token can be reduced.

Reserve Capture & Perpetual Growth

The "Reserve" is a percent of every prize that is kept in the prize pool and placed under the control of POOL token holders. Funds directed to the reserve make the prizes larger without diluting the odds of winning. Prizes in turn contribute to a larger reserve. This creates a perpetual growth cycle and mathematically speaking, increases the expected value of a deposit into PoolTogether. A large reserve accelerates the growth flywheel.

POOL Supply

Details of the POOL token supply and distribution are below.

• The total supply of POOL tokens is 10 million

• 4.8 million (48%) of those tokens have not been distributed and are controlled by governance

5.2 million (52%) have already been distributed; details of the most significant distributions are as follows:

• 1.5 million tokens were given to early users of the protocol; of that amount, ~400,000 remained unclaimed in the distribution contract

• 1.2 million tokens were given to early contributors to the protocol. All these tokens are subject to one-year locking ending on February 17th, 2022

• 750,000 tokens were given to investors in PoolTogether Inc. All these tokens are subject to one-year locking ending on February 17th, 2022

• 411,000 tokens were distributed to participants in the protocol diversification. These tokens have one year vesting with progressive one-year unlocking that begins in May 2022

Based on the above information, you can calculate the approximate amount of POOL tokens currently distributed and not locked in any way is 2.45 million.