- The Ethereum-based DeFi application, PoolTogether, has raised $1 million in funding from ConsenSys, IDEO CoLab Ventures and DTC Capital.
- The application is the first “no loss” DeFi lottery while PoolTogether does not charge participation fees.
The Ethereum-based decentralized financial application PoolTogether announced that it has raised $1 million in a financing round supported by IDEO CoLab Ventures, ConsenSys and DTC Capital. PoolTogether is also one of the recipients of the MakerDAO grant program, and together with the recently raised funds, it aims to accelerate the development of the project.
Ethereum-based “no-lose” lottery
PoolTogether was founded in 2019 as a lottery game system designed to make sure that participants do not have any losses. The application was launched in two versions, the first in June and the second in September last year. Lottery participants must purchase tickets using either the Dai token or the stablecoin USDC.
Participants can then play in PoolTogether and all funds raised go into a fund that is awarded to a single winner. Although, PoolTogether guarantees that the rest of the participants do not have losses, once the winner is selected the funds of the rest of the participants are returned.
PoolTogether stated that the funds raised in the funding round will allow immediate improvements to be made to security, the size of prizes and to ensure that the application continues to operate without the need for additional fees:
Safety is always our highest priority. This investment has allowed us to hire some of the best security auditors in the world […] This (funding round) enhances the expected value of PoolTogether, the weekly Dai fund currently has ~$250,000 Dai sponsored […] This fundraiser has allowed us to go ahead without this fee. To be clear, PoolTogether does not charge any fees.
PoolTogether claims that applications like these will enable the DeFi business to increase its number of users by millions. In addition, PoolTogether stated that they will continue to work towards keeping their protocol “permissless, composable and decentralized”.
Although it has been successful in the funding round, PoolTogether has received criticism from the crypto-community. Some users believe that funds for the application would be better placed in other projects with greater potential and productivity rates. In addition, the PoolTogether protocol has also received criticism for lack of transparency because the team behind the application could change the terms of the contracts and withdraw the funds at any time.
DeFi has no impact on the price of the Ethereum
As reported by CNF, the market for decentralized financial applications (DeFi) is dominated by Ethereum. However, the cryptocurrency has not benefited from the growth of this sector. A research by Longhash has taken up the problem and showed that the growth of DeFi has not had the same effect as the ICO boom in 2017. According to Delphi Digital the central problem is that DeFi projects are not attracting fresh capital.
The price of the Ethereum is, at the time of publication, at $185 with a slight loss of 1.78% in the last 24 hours.