Earn by Backing the Prize Pool
Anyone can back the prize pool and earn yield on dollars, in dollars, by taking on variance!
Backing the prize pool works like selling insurance: you collect steady income from ticket sales (like premiums), and occasionally pay out when someone wins big. Over time, the math favors you, and the more tickets sold, the more you earn.
How Backing the Prize Pool Works
First a quick, high-level refresher on the Megapot protocol:
Now, here's how backing the prize pool works:
Understanding the Return Profile
Backers have a mathematical edge, for every dollar of tickets sold, they expect to earn approximately 20 cents after prizes are paid as compensation for taking on the variance of any single drawing.
Over hundreds or thousands of drawings, this edge compounds and trends toward expected returns.
Ultimately, it pays to stay in the pool over the long-term. Unlike insurance products where the likelihood of an event is unknown the probability of every outcome is known ahead of time and constantly working in the backer's favor.
For a more technical discussion of the return profile and to run your own profit simulations check out our Jupyter Notebook.
Next Steps
Ready to back? Learn How to Back the Pool
Want to understand the full system? Read The Ecosystem
Questions? Reach out on our Support Chat
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