An Overview of the Crypto Lottery Track: A Perfect Fit for Web3 and DeFi?
The encrypted lottery track achieves its transparent, fair, and tamper-proof model through blockchain technology. From a technical perspective, it aligns perfectly with the cryptocurrency market. As the industry develops and matures, there is a need for segments with large traffic and financial attributes to emerge and explode.作者： ByTrade
With the arrival of the new round of Bitcoin halving narrative in 2024, the market is waking up, with various sectors rotating upwards. Beyond the BTC halving narrative, we still need to pay attention to opportunities brought by the Federal Reserve's interest rate cuts, Ethereum's Cancun upgrade, AI applications, re-staking, DePin, RWA, inscriptions, and the European Cup narratives. Therefore, the crypto market has also entered a tense and enthusiastic phase, filled with FOMO. Today, we will explore the undervalued lottery sector that combines Web3 and DeFi, seizing the huge opportunities and wealth effects in the new bull market.
1. Definition of the Crypto Lottery Sector
In a nutshell: Crypto lottery is a lottery system based on blockchain technology, which uses cryptographic algorithms to ensure the fairness and transparency of the draw.
When most people think of the term lottery, they often associate it with tangible items like numbers and lottery machines. However, when "crypto" and "lottery" come together, they usually do not think of any physical objects. Cryptocurrency is a digital currency supported by cryptography and blockchain technology. Therefore, if cryptocurrency is digital currency, then crypto lottery means digital lottery represented by cryptocurrency + NFT on the blockchain.
Crypto lottery is also the blockchain version of traditional lottery games, so it does not use fiat currency, but rather cryptocurrencies like Bitcoin or Ethereum; it may even involve NFTs and inscriptions. Its core feature is supported by blockchain technology, with application layers, data layers, etc., stored on the blockchain, ensuring fairness through cryptographic technologies like smart contracts.
2. Technological Innovations in Crypto Lottery
In crypto lottery, the technology behind it far surpasses traditional lotteries. Perhaps the most commendable technological feature of crypto lottery is its use of smart contracts and provably fair technology to generate winning tickets, ensuring the transparency and fairness of selecting winning tickets.
By incorporating provably fair technology into smart contracts, online crypto lottery platforms ensure that the process is not only automated but also completely random. Winners are not selected by any parameters but are determined entirely by the results of mathematical and cryptographic algorithms.
Another innovative feature introduced by crypto lottery is the transparency and privacy of the process. Like most other blockchain platforms, crypto platforms do not request user data. Each player is completely anonymous, and every transaction (buying tickets, winning) is recorded on the blockchain and accessible to the public.
Moreover, the biggest probability event of the lottery can be intuitively understood as having a certain logical alignment with the crypto market, thus expanding the potential and compatibility of lotteries in the crypto market. As Web3 becomes the benchmark in the minds of all crypto practitioners, the importance of decentralization is infinitely amplified. The combination of crypto lottery with DeFi financial attributes + Web3 decentralization breaks the negative impression users have of lotteries, thus opening up traffic entry points.
The essence of the lottery also possesses a fan effect, coinciding with the opening of the 2024 European Cup. This international competition itself will have betting and lottery components. Through the rights token or NFT of the lottery model and identity verification, it will break through the technical barriers of the crypto market. As the narrative of the European Cup heats up, fan sector token prices will rise successively, especially the club tokens incubated by Binance.
3. Differentiation Between Crypto Lottery and Traditional Lottery
The traditional lottery industry has a long history. "Six heroes compete for good luck, a golden plate thrown opens to thousands" is a depiction by poet Li Bai of the gambling boom during the Tang Dynasty. The biggest difference between traditional lottery and crypto lottery is that the former is driven by fiat currency, while the latter is driven by cryptocurrency.
Traditional lotteries operate in a centralized manner, and trust issues are the biggest concern for the public. Various stages of the lottery, such as issuance, purchase, drawing, redemption, and the use of raised funds, all have certain possibilities of opacity and manipulation, making it difficult to guarantee user interests.
Blockchain and smart contract technology theoretically provide solutions for this. The decentralized and immutable characteristics of blockchain, along with the trustless and automated execution of smart contracts, can help lottery systems achieve information sharing, real-time supervision, process transparency, and trustworthy results. Additionally, cryptocurrencies are decentralized, peer-to-peer, and confidential, allowing anyone to participate—even users living in countries where lotteries are banned or heavily regulated. More importantly, crypto lotteries immediately redistribute prizes, so there is no need to wait days or even weeks to receive assets.
Under the differentiation between traditional lottery and crypto lottery, it can be found that crypto lottery is a fair, secure, globally available, anonymous, and convenient lottery system. It has the following main advantages:
Fairness: Crypto lottery uses blockchain technology to ensure the fairness and transparency of the draw results. No one can change the draw results.
Security: Crypto lottery uses cryptographic algorithms to protect user privacy and data security. Users' personal information will not be leaked.
Global Availability: Crypto lottery is based on blockchain technology and can be used anywhere in the world. Users can participate in the lottery from anywhere.
Anonymity: Crypto lottery does not require users to provide real names or ID numbers, ensuring good protection of users' privacy.
Convenience: Crypto lottery can be participated in online, allowing users to take part without leaving their homes.
Of course, in the current iteration of crypto lottery technology, there are some issues. However, seeing the enormous potential, it is believed that future problems will be upgraded or resolved more. The specific drawbacks of crypto lottery include:
Dependence on Technology: Lotteries require users to have a certain level of technical knowledge, which may be difficult for those unfamiliar with technology.
Security: Although crypto lottery uses cryptographic algorithms to protect user data security, there are still some security risks, such as hacking attacks and network failures.
Policy Instability: Crypto lottery still faces some policy influences and restrictions, which may impose regional and identity limitations on users.
Early Stage and Small User Base: The user base of crypto lottery is still not stable, and the sector is in the early stages of development, with a small number of users participating in the lottery.
Overall, as a new type of lottery system, crypto lottery still needs some time for development and improvement to address the current issues.
4. Ecosystem of Crypto Lottery
Although the crypto lottery sector is in a development and undervalued stage, it still has some quality projects and applications, which we can divide into two categories: the first being compatible functional lottery; the second being native lottery applications. Next, we will specifically understand the classification of the lottery sector.
- Compatible Functional Lottery Applications
(1) PancakeSwap
Official Website: https://pancakeswap.finance/
It is a decentralized exchange (DEX) built on the BNB Chain, using an automated market-making (AMM) system.
Lottery Gameplay:
Users can purchase lottery tickets by consuming Cake, with each ticket priced at approximately $5. Lottery numbers can be chosen randomly or entered manually. There is a period between rounds during which tickets cannot be purchased, and bulk purchase discounts are available. The more tickets purchased, the greater the discount. Starting from the purchase of 2 tickets, discounts can be as high as nearly 5% (4.95%) for up to 100 tickets.
At the end of each round, users can check if their tickets are winners. If the previous round's lottery did not win the jackpot, the prize pool for the next round will increase; the longer no one wins the jackpot, the larger the lottery prize pool becomes. The longer a round of lottery is open, the more people can buy tickets. Each ticket sold further increases the prize pool.
Summary: Pancake has a large base of users, and its lottery model is well-received by many users, being highly engaging and satisfying users' investment desires.
(2) Bytrade
Official Website: https://www.bytrade.io/
ByTrade is a leading digital financial derivatives and Web3 trading platform, operating internationally in countries such as Dubai, Thailand, and Turkey. It currently holds a compliant trading license from Dubai DMCC, with a team of elites with years of experience in finance and high-tech fields, focusing on strategic planning for emerging assets and providing comprehensive services to partners. ByTrade has significant advantages in global strategic operations, having established diverse business sectors and a comprehensive financial risk management system.
Lottery Gameplay:
It establishes an innovative, transparent, and fair NFT lottery system, with a lottery model based on the date of BTC halving, primarily using Blockchain technology to ensure unwavering transparency, randomness, and legality through accessible on-chain data for all users.
The lottery will utilize verifiable random functions (VRF) to ensure fair and secure draws, allowing smart contracts to operate with unpredictable, verifiable randomness while maintaining tamper-proof characteristics. Users can obtain # NFT tickets in the most convenient way through fiat currency or USDT. They can also increase their chances and odds by entering multiple times. The lottery is represented in NFT form, which can be used in exchanges to reduce fees, provide personalized support, offer the highest BYTD token rewards, and shape voting rights for the platform's future and future lottery events.
Summary: This lottery represents a functional lottery model for the exchange, with draws based on the BTC halving date. Currently, holding a lottery ticket has significant future empowerment value, and users who do not win will receive a full refund, making the lossless lottery supported by the exchange platform quite innovative. The exchange platform also holds a compliant trading license, has a strong background and high liquidity, and is currently one of the platforms with ultra-low trading fees in centralized exchanges in the crypto market, making it worth following activity dynamics.
- Native Lottery Applications
(1) TonTogether
Official Website: https://tontogether.com/
It is a lossless lottery project built on TON.
Lottery Gameplay:
TonTogether will stake the TON tokens deposited by users to Tonstaker to earn interest from node staking rewards, then randomly draw from this income for lucky winners. After staking $TON tokens to TonTogether, users have a chance to win the lottery while also mining $TOT tokens. The total supply of $TOT is 10 billion, of which 98% is generated through user mining, 1% is allocated to TonUP DAO (potentially for issuance), and another 1% is for liquidity management.
According to the project team's documentation, 80% of the income will enter the Token Treasure, with 50% of the total income allocated to winners, and 30% entering the DAO's treasury to support the issuance and price of $TOT tokens. This means that for every $TOT issued, there will be $TON in the treasury as price support, with the remaining 19% used for buybacks.
Summary: The project is currently in its early stages, and specific products have not yet launched. Its lottery model mainly utilizes DeFi staking, locking platform tokens to earn protocol income, with a core focus on the lossless lottery model, meaning that even if participants do not win, they will not incur any losses. It is positioned within the Ton ecosystem, providing user advantages. As the project's TVL continues to be resolved, it will meet user liquidity needs, making it worth following.
(2) PoolTogether
Official Website: https://pooltogether.com/
It is a cryptocurrency-driven lottery protocol based on Premium Bonds and is one of the earliest and most widely used DeFi (Decentralized Finance) applications.
Lottery Gameplay:
Deposit into any prize pool and immediately receive a lottery ticket. As long as you stay in the prize pool, you are eligible to win prizes. The prizes consist of all the interest earned from deposits in the pool, and all players can withdraw their deposits at any time. When deposits enter PoolTogether, they are automatically transferred elsewhere to start earning interest. Protocols like Aave are "completely liquid." Additionally, interest is generated every 15 seconds. Anyone borrowing from Aave must deposit collateral worth more than the borrowed assets to ensure the loan is not defaulted.
Summary: The project's core is based on the DeFi staking model, with lower lottery attributes. However, since each pool deposit earns interest rewards, it can also be understood as one of the lossless lotteries.
(3) BTC Lottery
Official Website: https://www.btclottery.io/
It is a decentralized gaming and lottery platform built on the Polygon protocol, providing secure gaming, lottery, charity, and giveaway services for blockchain users.
Lottery Gameplay:
BTC Lottery offers four groups of lottery games for 20, 10, 5, and 2 people. Each category is uniquely designed to provide different levels of probability and pricing to accommodate various preferences and strategies. The core is to purchase lottery tickets using platform tokens, while allowing customization of the lottery model, such as the number of participants and tickets. A uniform fee of 10% is charged for different player groups to maintain transparency and fairness. Specifically, the 5-person, 10-person, and 20-person lotteries reward 2, 3, and 4 winning tickets, respectively. All prizes are directly deposited into the dashboard, and players can easily transfer their winnings to their wallets.
Its core utilizes Chainlink to ensure randomness, automation, and seamless cross-chain interoperability. BTC Lottery supports multi-chain interactions, including Ethereum, Polygon, Binance, Avalanche, Optimism, Arbitrum, and Base.
Summary: The project primarily focuses on different lottery games, customizing various gameplay to meet the fun aspects of crypto lottery, with quick round cycles. The platform mainly generates income by collecting a portion of the assets from users purchasing tickets.
(4) Prode
Official Website: https://prode.market/
It is a decentralized sports lottery application launched in August 2022.
Lottery Gameplay:
Each Prode market is a betting pool system that aggregates all matches of designated events (such as the World Cup group stage) into one betting pool, allowing users to predict each outcome for a chance to earn points and win accumulated prizes.
The platform supports:
- Anyone can create a betting market.
- Anyone can verify that the market is well-configured and valid according to its category guidelines.
- Anyone can bet on the event outcomes 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 regional or event restrictions, and supports betting on stocks, competition events, the World Cup, etc., deployed on the Gnosis chain, with betting conducted through xDAI deposits. The project is still in iterative progress and can be monitored.
Official Website: https://www.lottoland.com/
It is the world's first Bitcoin lottery. The company behind it is located in Gibraltar and employs over 350 people. Lottoland is regulated and widely regarded as a leader in traditional lotteries.
Lottery Gameplay:
It offers a Bitcoin-based lottery, which is based on Bono lotto, a 49-draw lottery held every working day and Saturday in Spain. The Bitcoin lotto offers a top prize of 60 Bitcoins and a second prize of 1 Bitcoin, with the option to receive equivalent cash. Winners can choose to receive prizes settled in Bitcoin (calculated based on the Bitcoin value at 9:30 PM (CST) on the day of winning) or equivalent cash.
By selecting six numbers between 1 and 49 and purchasing a ticket. Each ticket costs €3.50, and the fee is adjusted based on the Bitcoin value at each draw. Despite the high stakes, the odds of winning the jackpot are 1 in 13 million. 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 to 1 BTC, with a maximum of 1000 BTC.
Summary: The core remains a centralized platform, but it supports betting in euros, and rewards can be chosen in BTC. For centralized platforms, the aforementioned issues of manipulability still exist. Currently, this project is favored by traditional users, and it is worth following up on future developments. If it continues to increase cryptocurrency offerings, it will have significant potential.
5. Future Prospects of Crypto Lottery
In summary, the crypto lottery sector achieves its transparent, fair, and tamper-proof model through blockchain technology, which will infinitely align with the crypto market from a technical principle perspective. As the industry develops and matures, there is a need for sectors with large traffic and financial attributes to emerge and explode. Additionally, with the integration of NFTs, identities, inscriptions, etc., the lottery world is about to change. Regardless of how any sector is combined, it can serve as a unique lottery or prize, making lotteries more collectible and tradable, ushering in a new era of Web3 lottery systems.
In this new round of bull market train, let us explore powerful sectors with enormous potential and value returns together, ready to set sail.
