MakerDAO-backed PoolTogether raises $ 1.05 million, with ConsenSys participating

PoolTogether has raised $ 1.05 million to improve the security of the agreement, increase rewards, support the platform's zero-fee service, and launch the USDC daily prize pool and ticketing consolidation feature in the near future.

PoolTogether was established in September 2019 and is supported by the MakerDAO Foundation.It is an Ethereum-based lossless lottery system originally designed by the government to combat inflation and encourage savings.

With PoolTogether, users can buy lottery tickets for 1 Dai. Payments will immediately begin to generate revenue through Compound's Dai currency market, and every week a lottery holder will win the lottery and receive all the interest earned.

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According to Monday's announcement, the startup received a $ 1.05 million investment led by IDEO CoLab Ventures, with ConsenSys Labs and DTC Capital.

PoolTogether co-founder and chief vision officer Leighton Cusack told The Block that the fundraising was based on a simple agreement on future equity.

New capital inflows will support companies in many areas.

First, PoolTogether will use the new investment for platform security work, which will include hiring security auditors and implementing higher rewards for its vulnerability bounty program. Notably, Cusack revealed that the company also received a small grant of less than $ 50,000 from MakerDAO to cover its first security audit.

Second, a portion of the new funds will be deposited into the interest pool as a "sponsored Dai", which will help increase weekly yields but is not eligible for winning the lottery. The company said that the prize pool currently has about $ 250,000 in sponsored Dai, and that new revenue will increase the expected value of the system.

Third, PoolTogether initially planned to retain 10% of the revenue it earned, but has since implemented a zero-fee model. The new financing will support the company in providing free services.

In addition to the immediate enhancements mentioned above, this investment will also fund PoolTogether when launching new prize pools and features.

According to Cusack, the company plans to release a new USDC-based daily prize pool. He says:

"Increasing the frequency of prizes can increase the probability of winning for small depositors. This new daily prize pool uses USDC, so we are also expanding the types of tokens people can use."

In addition, the company is developing a new feature, "pods," which allows users to link tickets together and share prizes when they win. Cusack said that this ticket consolidation feature will allow users with less deposits to compete with users with large funds.

Rapid growth

The Block previously stated that PoolTogether has maintained rapid growth since its inception, with the most recent jackpots coming from 1,187 independent players and a jackpot of more than $ 195,000.

Cusack believes that the platform's growth was stimulated by the "flywheel effect" that began in January, with more deposits leading to larger bonuses and larger bonuses leading to more deposits.

"When people see this trend in action, I think it is of great interest," he said.

In addition, according to Cusack, while platforms that link savings products to prizes are common in traditional finance, they are still lacking in the Ethereum ecosystem.

"Reward-linked savings products have become very popular in traditional finance. Building one on Ethereum will only make it better. Users have high demand for such products, but not many."

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