*obligatory not financial advice*
What is Moonpot?
Moonpot is a DeFi application on the Binance Smart Chain that is a mixture of a savings protocol and a no loss lottery. It was founded by the team behind Beefy Finance, which is one of the most popular DeFi dApps on BSC.
The Binance Smart Chain has gained a lot of popularity as an alternative for Ethereum thanks to its low transaction fees despite obviously depending on the Binance exchange. There are countless of applications running on it including DEXes, lending protocols and games. Moonpot is one such application with a focus on DeFi.
Moonpot is like a lottery where even the losers are earning money. Normally, the prize pool of a lottery is created by the sales of tickets, which means that all the losers of the lottery are losing money to fund the prize of the winner. Moonpot works differently, the provided funds are used to earn interest on other DeFi protocols, for example CAKE is reinvested into the Beefy CAKE vault, and then half of the earned interest is distributed to all the users and another half is given to the winners of the weekly or bi-weekly lottery.
This means that you can use Moonpot as a savings tool while also having a chance of hitting it big. There are pots for USD stablecoins, CAKE, BNB, BIFI and more tokens and all offered APYs have at least double digits which is a pretty neat return, although most of that APY comes from POTS token rewards. Pools distribute the lottery prizes weekly, bi-weekly or monthly and the prizes are usually ten thousands of dollars’ worth of crypto that 5 different addresses are winning. You don't need to re-deposit your funds or won prizes after a lottery cycle is over, they get reinvested automatically and the interest you earned is compounded.
How likely you are to win depends on how much money in the pool is yours. The more you supply, the higher are your chances. You could argue that this means that people with big pockets are more likely to win and therefor it’s unfair for smaller players, but you need to understand that their funds allow the pool to collect more rewards which make the prizes bigger. Also small fish can still win, they are just less likely, and in fact one of the very first winners had only $150 worth of CAKE staked but won more than $16K in CAKE.
All in all, Moonpot is probably not the best yield optimizer since a part of the earned interest is used for prizes that you are not very likely to get, but it provides a decent return on provided funds and makes saving fun by giving you the chance of winning a large sum.
The POTS Token
POTS is the native token of the Moonpot dApp. It is used for governance, meaning that the holders can vote on changes to the protocol. The token holders are also earning a share of the revenue, so they have a big incentive to govern the protocol properly to cause more people and funds to join the dApp.
You can earn this share of revenue by staking your POTS in a special pot that gives you more POTS and also BUSD, this pot also has a lottery. 5% of all the collected interest of the entire platform is distributed in this pot that way.
There is a max supply of 10,000,000 POTS token. 25% is distributed to Moonpot users, 25% is distributed to Beefy Users and its treasury, 14% was used to provide the initial liquidity on the Pancakeswap DEX, 20% were set aside for future farming and other rewards, 10% were given to the developers and are being vested, 5% were used for sponsors and social giveaways and 1% was used as bounty for searching for bugs. In all honesty, the share for the actual Moonpot users could be higher.
The token has been around since August 2021 and had explosive growth early on but has been falling ever since. The value of the token obviously depends on how much funds are in the Moonpot smart contracts, because not only will voting rights for the protocol be more desirable if more funds are added but the rewards the token holders earn will be higher too. It offers a fun way of earning money with your cryptocurrencies, you could likely earn more with another savings protocol or yield optimizer but with Moonpot you have the chance of winning thousands of dollars’ worth of crypto and you have nothing to lose by playing with this lottery.
POTS are not listed on any big centralized exchange, but you can buy it on the Pancakeswap DEX if you want too. You can store your tokens and interact with the Moonpot platform with any Binance Smart Chain wallet like with Trust Wallet for example.
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