A different approach at explaining Decentralized Lotteries:
With the evolution of DeFi, we will see the emergence of creative and disruptive financial applications which will open up accessibility and remove middlemen. One of these disruptions is decentralized lotteries.
Ready for some fun?
Imagine being able to purchase a lottery ticket without any risk. Sounds too good to be true, right?
No longer is that the case!
With decentralized lotteries, all proceeds from tickets purchased are pooled together in one Dapp, invested short term into a DeFi lending Dapp and interest is paid out to the lottery winner after the set time interval. All this is done over a blockchain network such as Ethereum and without supervision, as terms are set in a smart contract. The best part? All participants will have their initial investment returned, even if they aren’t the lucky ones whose numbers are chosen. Win win!
Here’s an example: Earlier in February 2020, a user who had deposited only $10 won $1,648 in a DeFi Dapp Lottery Prize Pool with a 1 in 69,738 chance of winning. After the lottery winner was chosen, all participants received their invested tokens back guaranteeing zero loss to all users.