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Lotteries have been a simple concept to recreate in smart contracts as the mechanics behind them are purely transactional. As a result, there is no shortage of cryptocurrency lotteries today; however, the introduction of a lossless lottery is shifting the market and replacing those established projects made on Ethereum and Bitcoin with Terra and Solana. This is an obvious shift considering how retail-oriented these blockchains are. The last quarter of 2021 has been instrumental in the crypto world, and it has sparked even more interest in web 3.0. The most evident question that a newcomer could ask at this point would be -" How can all of this be applied to real-life?" This is exactly where Terra and Solana step in. Both blockchains are very easy to understand, and they provide a straightforward use by introducing dApps that replace everyday financial products, e.g. banking, insurance, lottery, etc.
So what's up with these Lossless lotteries, you may ask? They are bringing lottery as we all know it into web 3.0, which is the perfect case of "mass adoption". So let's break it down.
Lossless lotteries are the culmination of two established ideas. The first is the smart contract lottery – an open-source contract that accepts deposits, generates randomness and pays out to a winner at a specified time, all without the need to trust an intermediary. The second and more recent technology that enabled the "lossless" side of these lottery games is Defi. In Terra, for instance, it's made possible by the Anchor protocol, which generates yield and Pylon, which uses a simple principle - Deposit money -> Spend yields. One such Defi application is glowyield.com, the ecosystem of web3 Terra projects which introduces a lossless lotto glowlotto.com and a Patreon like platform named Glow Creators, which enables no loss contributions to your favourite content creator, but this is another story, let's stick with the lottery for now.
We can now examine the "lossless lottery" with these two concepts now understood. This lottery is a smart contract that takes deposits as expected. However, the deposited funds are lent out through a protocol such as Anchor Protocol between the lottery's start and end date. During this time, the held funds earn interest and – given a long enough period and large enough pooled deposits – the interest earned can be pretty substantial. When the lottery closes, a lucky winner is selected, and the total interest earned is paid to the individual. The kicker for those looking to avoid risk is that all lottery entrants then receive their deposits back in full, creating a lossless lottery.
Lossless lotteries are a great way of mitigating risk while still entering into a chance to win large sums of money. While similar types of lottery exist in the traditional world, (premium bonds in the UK, for example), the ability to run such a game on a blockchain, dramatically improves efficiency and trust in the game while minimizing operation costs for the lottery owner.
The lossless lottery is a relatively early concept. Over the coming years, more complex Defi protocols will undoubtedly appear, sparking an entirely new and previously unimagined set of gambling games for players to enjoy. For now, I would strongly suggest you check out glowlotto.com, their testnet has been available for a while, and it's launching on the 10th on the mainnet.
In the last 12 months, decentralized finance on Terra has grown exponentially with no sign of slowing down. Watch this space. It has grown to become the 9th largest cryptocurrency by market cap and at around US$80 presently is worth around US$23bn.
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