Messari, a notable crypto analytics firm, has recently published data that the no-risk lottery platform, PoolTogether, has managed to gather 6,000 users since its launch in October of last year.
To date, PoolTogether's V3 has garnered over 6,000 continuous lottery players, making it one of the most utilized protocols excluding DEXs pic.twitter.com/KLK2K63pRl
— Messari (@MessariCrypto) March 23, 2021
PoolTogether V3 One Of DeFi’s Most Used Protocols
With this user base, Messari claims that PoolTogether stands as one of the most utilized protocols within the entire DeFi space. This statement excludes the decentralized exchanges, of course.
On the 23rd of March, 2021, Messari issued out a separate report. This report made note of how PoolTogether V3 had managed to garner a total of $234 million in Total Value Locked (TVL) since launching its incentives for liquidity providers. With this, PoolTogether stands at 30th place when reviewing the largest DeFi protocols, standing above names like PieDAO and Hegic.
The Illusion Of Kept Value
PoolTogether offers “risk-free” stablecoin lotteries through an ingenious little system: They use the capital from liquidity providers and ticket boyers in order to generate interest on them by way of decentralized lending protocols. From there, the winner of the lottery round collects a majority share of these accrued yields.
Typically, a number of runner-ups also receive a small portion of the pot as further incentives. The remaining participants are refunded in full, but they never get to realize the profits they could’ve made just by staking their own holdings in a lending protocol.
Dune Analytics revealed that a total of 4,599 participants are already holding tickets for the next lottery at the time of writing. This number will undoubtedly increase as time goes on.
PoolTogether v3 Doing Quite Alright For Itself
Messari has given estimates that the weekly grand prize pool payouts range in rewards from $60,000 to $90,000. In total, PoolTogether has managed to pay out a total of $750,000 in various prizes since its initial launch.
In order to grow its balance sheet, PoolTogether V3 makes use of maintaining a 5% reserve rate on the accrued interest from these pooled funds. It should be noted that a governance proposal was published on the 20th of March, 2021, within PoolTogether’s forums. This proposal suggested increasing the reserve rate to as much as 50%.
In this proposal, it makes note that liquidity providers are earning anything between 30% to 40% in APYs. With this, the proposal estimates that the liquidity providers are only managing to earn 8-15% for the prize, in total
Through the increase of the protocol’s reserve rate, the author of the proposal speculates that higher prize levels could be achieved in the future, should more whales decide to withdraw their liquidity.