PoolTogether for Good: 1 ETH = 1 Well

By Thumbs Up | Thumbs Up Finance | 10 Apr 2023


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Hey friends 👋

Water is one of the most essential components of life. However, over 2 billion people worldwide still lack access to clean tap water. This is a problem that needs to be solved, but as with many issues, a lack of funding is the greatest barrier to change. But what if I told you that you could contribute to solving this issue without ever giving up your hard-earned money?

To understand this, first, you need to understand PoolTogether.

What is PoolTogether?

If you’ve read much of my writing, then you probably already know what PoolTogether is. It has been one of my favorite protocols in crypto since I first discovered it, and I’ve written about it countless times. However, many of you may be new to my writing and may not have heard about it, so let’s go over the basics, and then I’ll explain just how exactly PoolTogether is involved in providing access to clean water.

PoolTogether is a crypto prize-linked savings protocol, sometimes colloquially referred to as a no-loss lottery. Here’s how it works: users deposit funds into what is essentially a savings account, and that account generates yield on their deposits (just like your account at the bank or your deposit in Aave). The difference here is that instead of that yield slowly trickling back into your account, it’s pooled together (hence the name), and from that pool, daily prizes are won by depositors.

This design offers two main benefits:

  1. Potential returns are far greater compared to a traditional savings account. While there is no guarantee of winning, even the smallest depositors can win. With prizes ranging from a few dollars to a few hundred dollars per day, the potential for a return that’s 10 times higher than a traditional savings account is very real.
  2. Compared to a lottery which siphons money from the most financially vulnerable, this is an immeasurably better option. Not only are the odds of winning higher, but the deposits are always able to be withdrawn in full. Therefore, users aren’t buying anything, but trading their chance at earning a guaranteed low yield for a chance at an asymmetric return.

Ok, but what does this have to do with water?

Wells for the Win

Back in February, PoolTogether announced a community-led initiative to fund public goods through a prize pool called ETHWIN. It’s a pretty altruistic vision, and yet even the opportunists will still be happy.

Basically, users deposit staked Ether tokens — more specifically, Lido’s liquid staking token stETH — into a PoolTogether v3 smart contract, and those tokens accrue yield every 24 hours via Lido’s yield mechanism. All of the yield is returned to the prize pool, which awards once a week.

What’s unique about this particular prize pool is that it has two randomly chosen winners earning 25% of the yield each, and the other 50% of the yield is donated to a charitable partner.

The current charitable partner is WaterAid’s Crypto Water Fund (coordinated by the Giving Block). The goal of the campaign is simple. For every 1 Ether, WaterAid will be able to fund a community well and the relevant water infrastructure.

 

The prize pool is also sponsored by PoolTogether and WitNet (whose random number generator guarantees fair and decentralized randomness for the prize draws). These sponsorships increase the yield, boosting the prizes, but the sponsors themselves are not eligible to win.

To reiterate:

  • Deposit and withdraw at any time, #noloss
  • Secure the Ethereum network via staking
  • Contribute to the prize pool, 50% of which goes to charity
  • Chance to win prizes every week!

But how?

Get yourself some of Lido’s Stake Ether token stETH. It can be purchased on many decentralized exchanges (DEXs), such as Uniswap and Curve. Many mobile wallets, like Zerion, even have ways to facilitate these swaps in the app.

Once you have some stETH, head over to steth.win, connect your wallet, and click DEPOSIT NOW. You’ll need to approve the protocol to access your stETH.

Note: It’s always a good idea to set a limit on the amount that you approve. Wallets like Metamask should prompt you to input a limited amount. For good measure, you can just choose the exact amount you intend to deposit. That said, the PoolTogether v3 contracts have been extensively audited, and you can always revoke approvals at any time with services like revoke.cash and Debank’s Rabby Wallet.

With your token approved, you can choose the amount you want to deposit and click DEPOSIT.

You can see the countdown to the next draw at any time from the steth.win main page, and you can also see the progress towards that 1 ETH = 1 WELL goal.

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Clicking the little info symbol ⓘ tells you even more detailed information

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11 weeks isn’t bad, but this number will shrink the more people deposit.

More depositors = more yield generated = more funds donated = more access to water

So let’s PoolTogether for good at steth.win!

Until next time 👋
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