Author: ByTrade
As the narrative of the 2024 Bitcoin halving approaches, the market enters a state of awakening, with various sectors rotating and rising. In addition to the BTC halving narrative, we also need to pay attention to the opportunities brought by the narratives of the Fed rate cut, the Ethereum Cancun upgrade, AI artificial intelligence applications, re-staking, DePin, RWA, inscriptions, and the European Cup. Therefore, the cryptocurrency market has also entered a tense and enthusiastic state of FOMO. Today, we will explore the underestimated track of combining Web3 and DeFi in the lottery sector, seizing the huge opportunities and wealth effects in the new bull market.
I. Definition of the Cryptocurrency Lottery Track
In summary: Cryptocurrency lottery is a lottery system based on blockchain technology, ensuring the fairness and transparency of the draw through the use of encryption algorithms.
When most people think of the term "lottery," they often associate it with tangible things such as numbers and lottery machines. However, when "cryptocurrency" and "lottery" are combined, people usually do not think of anything physical. Cryptocurrency is a digital currency supported by cryptography and blockchain technology. Therefore, if cryptocurrency is digital currency, then cryptocurrency lottery means digital lottery represented on the blockchain using cryptocurrency + NFT.
Cryptocurrency lottery is also a blockchain version of traditional lottery games, so it is not based on fiat currency, but on cryptocurrencies such as Bitcoin or Ethereum, and may even involve NFTs and inscriptions. Its core feature is supported by blockchain technology, with application layers and data layers stored on the blockchain, ensuring fairness through encryption technologies such as smart contracts.
II. Technological Innovation of Cryptocurrency Lottery
In the cryptocurrency lottery, its technology is far ahead of traditional lotteries. Perhaps the most commendable technological feature of cryptocurrency lottery is its use of smart contracts and provably fair technology to generate winning lottery tickets, ensuring the transparency and fairness of the selection of winning tickets.
By incorporating provably fair technology into smart contracts, online cryptocurrency lottery platforms ensure that the process is not only automated but also completely random. Winners are not selected by any parameters, but are entirely random, determined by the results of mathematical and cryptographic algorithms.
Another innovative feature introduced by cryptocurrency lottery is the transparency and privacy of the process. Like most other blockchain platforms, cryptocurrency platforms do not request user data. Each player is completely anonymous, and every transaction (purchasing lottery tickets, winning prizes) is recorded on the blockchain and accessible to the public.
The probability events of lotteries also have a certain logical alignment with the cryptocurrency market, which expands the potential and compatibility of lotteries in the cryptocurrency market. As Web3 becomes the benchmark in the minds of all cryptocurrency practitioners, the importance of decentralization is greatly magnified, and the combination of cryptocurrency lottery with the decentralization of DeFi and Web3 breaks the negative impression of lotteries for users, opening up traffic entry points.
Lotteries inherently have a fan effect. With the opening of the 2024 European Cup, this international competition itself will involve gambling on lotteries. By using token or NFT equity forms of lottery models and identity verification, it will break through the technological barriers of the cryptocurrency market. As the narrative of the European Cup heats up, the prices of fan token blocks have risen successively, especially the club tokens incubated by Binance.
III. Differentiation of Cryptocurrency Lottery from Traditional Lottery
The traditional lottery industry has a long history. "Six gambling heroes, good luck comes, the golden plate is thrown, and thousands of people open" is the poet Li Bai's description of the gambling scene in the Tang Dynasty. The biggest difference between traditional lotteries and cryptocurrency lotteries is that the former is driven by fiat currency, while the latter is driven by cryptocurrency.
Traditional lotteries operate in a centralized form, and trust issues are the public's biggest concern. Various aspects of lotteries, such as issuance, purchase, draw, redemption, and the use of funds raised, all have the potential for opacity and behind-the-scenes operations, and user interests cannot be guaranteed.
Blockchain and smart contract technology theoretically provide a solution to this. The decentralization and tamper-proof nature of blockchain, as well as the trustless and automatic execution of smart contracts, can help the lottery system achieve information sharing, real-time supervision, process transparency, and trustworthy results. In addition, cryptocurrencies are decentralized, peer-to-peer, and confidential, allowing anyone to play, even users living in countries where lotteries are prohibited or strictly regulated. More importantly, cryptocurrency lotteries immediately redistribute winnings, so there is no need to wait for days or even weeks to receive assets.
The differentiation between traditional lotteries and cryptocurrency lotteries reveals that cryptocurrency lotteries are a fair, secure, globally available, anonymous, and convenient lottery system. It has the following main advantages:
Fairness: Cryptocurrency lotteries use blockchain technology to ensure the fairness and transparency of lottery results. There is no possibility of anyone changing the lottery results.
Security: Cryptocurrency lotteries use encryption algorithms to protect user privacy and data security. Users' personal information will not be disclosed.
Global availability: Cryptocurrency lotteries are based on blockchain technology and can be used anywhere in the world. Users can participate in lotteries from anywhere.
Anonymity: Cryptocurrency lotteries do not require users to provide real names or ID numbers, ensuring the protection of user privacy.
Convenience: Cryptocurrency lotteries can be participated in over the internet, without the need to leave home.
Of course, in the current iteration of cryptocurrency lotteries, there are some issues. However, due to the perceived huge potential, it is believed that these issues will be addressed through further upgrades or breakthroughs in the future. The specific drawbacks of cryptocurrency lotteries are as follows:
Technical dependency: Lotteries require users to have a certain level of technical knowledge, which may be challenging for those unfamiliar with technology.
Security: Although cryptocurrency lotteries use encryption algorithms to protect user data security, there are still some security risks, such as hacking attacks and network failures.
Policy instability: Cryptocurrency lotteries are still subject to some policy impacts and restrictions, which may limit users based on region and identity.
Early stage and small user base: The user base of cryptocurrency lotteries is currently not stable, and the track is in the early stages of development, with a relatively small number of participants.
In summary, as a new type of lottery system, lotteries still need to undergo a period of development and improvement to address the current issues.
IV. Ecosystem of Cryptocurrency Lotteries
Although the cryptocurrency lottery track is in a stage of development and underestimation, it still has some high-quality projects and applications. We can divide it into two categories: the first category is compatible functional lottery applications, and the second category is native lottery-type applications. Next, let's specifically understand the classification of the lottery sector.
- Compatible Functional Lottery Applications
(1) PancakeSwap
Website: PancakeSwap
It is a decentralized exchange (DEX) built on the BNB Chain, using an automated market maker (AMM) system.
Lottery gameplay:
By consuming Cake to purchase lottery tickets, each ticket's price is approximately $5. Players can choose random selection or manually input numbers. There is a period of time between rounds when lottery tickets cannot be purchased, and bulk purchase discounts can be used. The more lottery tickets purchased, the greater the discount. Starting from purchasing 2 tickets, the discount increases up to 5% (4.95%) for purchasing up to 100 tickets.
At the end of each round, players can check if their lottery tickets are winners. When the jackpot is not won in the previous round, the next round's jackpot will increase. The longer the time without a jackpot winner, the larger the lottery jackpot becomes. The longer a round of lottery tickets is open, the more people can buy tickets, further increasing the jackpot.
Summary: PancakeSwap has a large user base, and its lottery model is well-received by many users, with strong entertainment value, satisfying users' investment desires.
(2) Bytrade
Website: Bytrade
ByTrade is a leading digital financial derivatives and Web3 trading platform across the internet, with international operations in multiple countries such as Dubai, Thailand, and Turkey. It currently holds a Dubai DMCC compliant trading license and has gathered an elite team with years of experience in finance and high-tech fields, focusing on developing strategic plans for emerging assets and providing comprehensive services to partners. ByTrade has significant advantages in global strategic operations and has established diverse business segments and a comprehensive financial risk management system.
Lottery Gameplay:
Establish an innovative, transparent, and fair NFT lottery system, with a lottery mode based on the date of the BTC halving, using blockchain technology at its core to ensure unwavering transparency, randomness, and legitimacy through on-chain data accessible to all users.
The lottery will use verifiable random function (VRF) to ensure fair and secure draws, allowing smart contracts to maintain unpredictability and verifiability while preventing tampering. NFT tickets can be obtained with fiat currency or USDT in the most convenient way. Additional entries and odds can be increased. The lottery is represented in NFT form, which can be used on the exchange to reduce fees, provide personalized support, offer the highest BYTD token rewards, and shape the platform's future voting rights and future lottery activities.
Summary: This lottery is a functional lottery model on the exchange, with draws based on the date of the BTC halving. Holding lottery tickets is expected to have significant future empowerment value. Users who do not win will receive a full refund, making it an innovative non-loss lottery on the exchange platform. The exchange platform also holds a compliant trading license, has a strong background and high liquidity, and is currently a platform with ultra-low trading fees in the centralized exchange in the cryptocurrency market, making it worth keeping an eye on for ongoing developments.
- Native Lottery-Type Applications
(1) TonTogether
Website: TonTogether
It is a no-loss lottery project built on TON.
Lottery Gameplay:
TonTogether allows users to stake TON tokens in Tonstaker to earn node staking rewards and then randomly distribute these earnings to lucky winners. By staking $TON tokens in TonTogether, users have a chance to win the lottery and also receive $TOT token mining rewards. The total supply of $TOT is 10 billion, with 98% generated through user mining, 1% allocated to TonUP DAO (possibly for issuance), and another 1% used for liquidity management.
According to the project team's documentation, 80% of the revenue will go into the Token Treasure, with 50% of the total revenue allocated to winners and 30% going into the DAO treasury to support the issuance and price of the $TOT token. In other words, for every $TOT issued, there will be $TON in the treasury to support the price, and the remaining 19% will be used for buybacks.
Summary: The project is still in the early stages, and the specific product has not yet been launched. Its lottery model mainly uses the staking model of DeFi, locking platform tokens and earning protocol income. Its core highlight is the no-loss lottery mode, where participants do not incur any losses even if they do not win. It is positioned within the Ton ecosystem and has user advantages. From the project's perspective, its TVL will continue to be addressed, which will meet user liquidity needs, making it worth keeping an eye on.
(2) PoolTogether
Website: PoolTogether
It is a cryptocurrency-driven lottery protocol based on Premium Bonds and is one of the earliest and most widely used DeFi applications.
Lottery Gameplay:
Deposit into any prize pool and immediately receive a lottery ticket. As long as the deposit remains in the pool, there is a chance to win a prize. The prize is composed of all the interest earned from the deposits in the pool, and all players can withdraw their deposits at any time. When a deposit enters PoolTogether, it automatically moves elsewhere to start earning interest. Protocols like Aave are "fully liquid." Additionally, interest is generated every 15 seconds. Anyone borrowing from Aave must deposit collateral worth more than the borrowed assets to ensure that the loan is not defaulted.
Summary: The core of the project is the staking model of DeFi, with a lower emphasis on lottery attributes. However, because every pool deposit earns interest, it can also be understood as one of the no-loss lotteries.
(3) BTC Lottery
Website: BTC Lottery
It is a decentralized gaming and lottery platform built on the Polygon protocol, providing secure gaming, lottery, charity, and gift services to blockchain users.
Lottery Gameplay:
BTC Lottery offers four groups of lottery games: 20-person, 10-person, 5-person, and 2-person. Each category is uniquely designed to provide different probability levels and pricing to accommodate different preferences and strategies. The core involves purchasing lottery tickets with platform tokens, with the ability to customize lottery modes such as the number of participants and the number of tickets. A 10% fee is uniformly charged to different player groups to maintain transparency and fairness. Specifically, 5-person, 10-person, and 20-person draws reward 2, 3, and 4 winning tickets, respectively. All winnings are directly stored in the dashboard, and players can easily transfer them to their wallets.
Its core uses Chainlink to ensure randomness, automation, and seamless cross-chain interoperability. BTC Lottery supports multi-chain interaction, including Ethereum, Polygon, Binance, Avalanche, Optimism, Arbitrum, and Base.
Summary: The project's core focuses on different lottery games, customizing various gameplay to meet the entertainment value of cryptocurrency lotteries. The rounds are fast, and the platform primarily generates income by charging a portion of the assets from users purchasing tickets.
(4) Prode
Website: Prode
It is a decentralized sports lottery application launched in August 2022.
Lottery Gameplay:
Each Prode market is a pool betting system that aggregates all matches of a specified event (such as the World Cup group stage) into one betting pool, allowing users to predict each result and have the chance to earn points and win cumulative prizes.
Platform Support:
- Anyone can create a betting market.
- Anyone can verify market configurations according to their category guidelines.
- Anyone can bet on the event results of certain or multiple markets.
- Anyone can provide real event results to close the market.
Summary: The project's core is decentralized, supporting anyone to create markets without restrictions on regions or events. It supports betting on stocks, competition events, World Cup, etc., deployed on the Gnosis chain, with bets placed using xDAI. The project is still in the process of iterative progress and is worth keeping an eye on.
Website: Lottoland
It is the world's first Bitcoin lottery. The company behind it is based in Gibraltar and has over 350 employees. Lottoland is regulated and widely regarded as a leader in traditional lotteries.
Lottery Gameplay: [Not provided]
Provide a Bitcoin-based lottery, which is based on Bonolotto, a lottery draw held in Spain every working day and Saturday with 49 draws. The Bitcoin lotto offers a top prize of 60 bitcoins and a second prize of 1 bitcoin, with the option to choose equivalent cash. Winners can choose to receive their prize in bitcoin (calculated based on the value of bitcoin at 9:30 PM (CST) on the day of the draw) or equivalent cash.
Players choose six numbers between 1 and 49 and purchase a ticket. The price of each ticket is 3.50 euros, and the cost is adjusted based on the value of bitcoin at each draw. Despite the high stakes, the odds of winning the jackpot are as high as 13 million to one. Lottoland offers six levels of prizes for users who match 2-6 numbers with the winning numbers. The odds for each level range from 7.6 to 13,983,826, with prize payouts ranging from 1.50 euros to 1 BTC, and up to 1000 BTC for the highest level.
Summary: The core is still a centralized platform, but it supports betting in euros, and rewards can be chosen in BTC. For centralized platforms, there is still the potential for tampering, but this project seems to be popular with traditional users. It is worth keeping an eye on for future developments, especially if it continues to increase cryptocurrency options, as it has great potential.
V. Future Prospects of Cryptocurrency Lotteries
In summary, the cryptocurrency lottery sector achieves transparency, fairness, and tamper resistance through blockchain technology. From a technical standpoint, it is perfectly suited for the cryptocurrency market. As the industry matures, there is a need for a sector with large traffic and financial attributes to emerge and explode. Additionally, with the inclusion of NFTs, identities, and inscriptions, the lottery world is about to change. Regardless of the sector it combines with, it can be a unique lottery or prize, making the lottery more collectible and tradable, ushering in a new era of Web3 for the lottery system.
In the new bull market, let's explore powerful sectors with great potential and value returns, and get ready to set sail!
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