UPDATED - 27/03/21 - After thinking about this idea, I had a drop into the PoolTogether discord and also participated in their last weekly team update and community update. The latest information is that PoolTogether is actually going to deploy on the xDAI and other L2 chains. For now, I have been informed by PoolTogether dev team that xDAI launch/ release is very close. So I have now decided not to pursue this proposal. Thanks for everyone that viewed/ commented and spent the time on this post!
PoolTogther What is it?
I am sure a lot of the users here have heard about PoolTogether. It’s a simple ‘no loss’ lottery where users pool funds into a smart contract and the pooled funds are then used to seek yield. The yield earned per week is then rewarded to a winning ticket which is picked at random from the users that pooled for the initial pool of money. So the ‘entry’ to the lottery is by funding the pool and keeping it locked for a duration of time. The ‘chance of win’ is proportional to the percentage of the pooled funds held by each unique address. So apart from the ‘business as usual’ risks involved in smart contracts and their interaction with other smart contracts, the users funds are generally not at loss as stable coins are used to fund the pool. (If anyone is interested you can read this article for a better overview https://medium.com/pooltogether/introducing-pooltogether-2f80c7c0bfc6)
On the main net this project has really taken off and has had a great success story. Recently they have tokenized the Dapp and created a DAO with some percentage of tokens being airdropped to early users of the protocol.
Problem: With gas prices on the main net pricing out the new and small players, I think the opportunity is ripe for something like this to be bought to the 1Hive model. Costs for approving the token spend and executing the transfer of funds to the smart contract on the main net are apparently upwards of $100. So unless someone is spending a few thousand dollars, it becomes pointless to enter the lottery with the very small probability of winning.
Solution: I propose that 1Hive has a mechanism where project forks can proposed and assessed based on economic incentives and viability of the effort required to fork and build the project to be live. I think PoolTogther could attract a load of new users as it has a very easy economic model that can be understood. 1Hive could take advantage of xDAI or any other L2 network that is suitable to build this Dapp and use the low gas fee and easy fiat onramps to attract a ton of new users that may be willing to dip their toes into the crypto world but with a familiar concept of a lottery.
I assume opportunities to seek yield on 1Hive may not be that extensive, so I would propose to use an established blue chip DeFI project that has been through rigorous auditing and stood the test of time and delivers a decent APY/APR for stable coins. I guess to make this affective we may also need to ask users to lock funds for periods of 3 or 6 months which I assume will be ok for most people. I guess there will also be some points of centralization in this model where the user funds may have to be bridged to the main net and back. Also the execution and choosing of the actual projects where to park the funds and other decisions at the start could be made by a well-known team or could be decentralized and left to the users. I am sure that with the right aligned incentives, active users would strive to keep funds safe and make logical choices.
Whats in it for 1Hive and the Devs: I am sure new users on 1Hive increases its exposure and brings more value to the network as a whole. The devs can take a cut of the winnings each week which could fund the team.
Well this is my first post here in the Forum, so please give me all the feedback you can. I am fairly new to this but think that 1Hive has a great potential to capture a new market of users which has been priced out by the main net due to gas costs.