To understand how early investors in Facebook's new Libra blockchain will make money over time, it helps to dig into a new lottery going live on ethereum mainnet Monday.
It's a lossless lottery called PoolTogether and tickets are now on sale.
Its similarity to Libra is not a completely one-to-one relationship, but the key insight of both is the same: Earning interest on your own money is good, but it's better to also earn interest on other people's money.
So first let's explain this new ethereum game before circling back to Libra.
On PoolTogether, each ticket sells for 20 DAI. Each pool sells as many tickets as it can, and all the DAI gets put into the ethereum-based money market protocol, Compound.
There, all the ticket money collects interest over the life at the pool and at the end, one ticket earns all the interest off everyone's ticket price.
Personal finance site Bankrate has found that people are less likely to buy lottery tickets as household income increases.
Now, this is a global project, so obviously Libra's backers want to get in a lot more than 100,000 people.
Canaccord Genuity estimates that if Libra coin gets a market cap equal to bitcoin's, $162 billion, then $324 million could be paid back to all LIT holders each year, after subtracting operational expenses for the Libra Association.
A crypto newbie could buy one ticket for 20 DAI and get all the interest earned off a whale who bought 1,000 tickets.
This Ethereum Lottery Perfectly Explains How Facebook's Big Corporate Backers Will Profit from Crypto
Udgivet den Jun 24, 2019
by Coindesk | Udgivet den Coinage
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