General
FAQ for PoolTogether V4

What is PoolTogether?

PoolTogether is a decentralized and open source blockchain based prize savings account. Replicating "no loss lotteries" and "prize savings accounts" all depositors are offered a chance to win prizes without needing to risk their deposited funds. This is possible because prizes are made up of the interest that accrues on all deposited funds.
The PoolTogether protocol has been live for over 2 years and distributed over $5 million in prizes to depositors. The luckiest winner so far deposited $74 and won over $40,000. PoolTogether is one of the first and most widely used decentralized finance applications. It helps people save money by giving them the chance to win prizes.
Read more about PoolTogether

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 Protocols like Aave are "fully liquid" meaning deposits can be withdrawn at any time.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 7 day prize period. That would mean your average balance for the prize period is $100. Someone else might deposit $200 the day before the prize. Their average balance for the 7 day prize period would be $28.57, even though they deposited more than you, their chance to win would be far less.

How are winners chosen? How is it fair?

The PoolTogether protocol is decentralized and open source. That means anyone can view an 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 7 day prize period. That would mean your average balance for the prize period is $100. Someone else might deposit $200 the day before the prize. Their average balance for the 7 day prize period would be $28.57, even though they deposited more than you, their chance to win would be far less.

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 buy third party insurance here.

Last modified 15d ago