OtterTank | LottoPGF | January 2024 Edition

[Music] all right uh hi everyone I'm Nico and um I'm going to start the pitch with uh short quiz kind of um what do the um Great Wall of China the city of Rome and this African Community have in common the the tit the title of my um startup if you've seen it might give you a clue but it's a hard one actually uh all of them were funded through uh lotteries or fund themselves through lotteries uh so this is what we're building building um it's called Lotto pgf permissionless lotteries for public goods funding on ethereum um well as we've seen like uh historically many um public goods have been funded through lotteries uh unfortunately many have been monopolized by the state and both public and private lotteries uh can be rigged can be manipulated and basically turn into scams um and it will sound very cliche but how can we Sol Sol them we can put them on a blockchain um the the idea behind using the blockchain for lotteries is we can make them permissionless so anyone can create their own Lottery uh to find the public good that they want the Char they want um we can make it verifiable so there will be a fair Randomness that you can check that is truly fair and um it will be non-custodial so smart contracts take care of uh of everything uh money Rel related and let's take an example um we have uh OT tank crypto Canal uh makes a public good this is basically a public good you know like we're uh this event is for free for everyone so um people might want to support it uh so a sponsor can put like an initial jackpot and then um some players can buy this lottery ticket and uh by buying the lottery ticket let's say 50% goes to the beneficiary and 50% goes to keep uh filling the jackpot so that they can um it can go on forever basically um yeah this is our team we have uh Marco front end Dev and full stack Dev um who makes great apps um Kevin he's a crypto cryptography nerd and smart contracts engineer um we have uh Serge who is uh the product uh designer and manager uh myself I'm uh I've been always busy with uh Business Development and community building and we have Oto our mascot who's just chilling at the pwn most of the time and yeah and well the Journey of the team has been quite interesting I think um we were both working on two different startups but uh good friends uh always hacking together um one was troops uh social network for Onin clubs or community and the other one is fery that is um on chain Raffles and um well we were hacking together a lot and at a hackathon we decided to do kind of like a proof of concept of this um and later on this Christmas we did an event with scroll where we kind of pro the concept with a Christmas Lottery and uh decided to take it a step further and actually do a a bigger project um in terms of traction let's say well that proof of concept in the if Munich hackaton won the first prize for uh real world use case uh our testet Christmas Lottery had 18 participants uh like around 50 tickets sold at that IRL event and um we last week we started this de and regions Community uh kind of thing where we had like around 300 people join in in very few time like in 48 hours we had like 25k Impressions on on X and we uh yesterday we created a Manifesto of this regions Deion kind of vibe um with more than 1,000 MTS in like less than 18 hours so that was quite cool um yeah so what we're looking for now is uh lawyers to help us figure out uh for an obvious reason I think um well we're trying to develop a more complicated protocol behind it so maybe some mechanism design uh or Game Theory experts would be very helpful um and of course community members and and pilot projects and we're also currently running through um susal Grant uh on on gitcoin so support there would be amazing uh that uh QR code for anyone who's interested leads to the um community on on telegram uh but if you're tired of like so many uh telegram channels full of well this one's actually high quality we're not allowing I SAR there's this other QR code that is more to subscribe to the announcements and just uh you know just get the important stuff it so yeah thank you very much [Applause] um what is the gr where do I sit it's more uncomfortable hello check yeah okay um maybe a short question around um I think it's a cool cool idea cool product what what's your thinking around um getting sort of TVO uh in in something like this cuz that's what really matters like how get the additional funds yeah that's actually like um kind of what we're trying to wrap our heads Heads around like the kind of like mechanism to incentivize the first um kind of like jackpot price um to be honest we thought of just um an idea is just to kind of like launch it as a dow and then like just uh it can be an interesting way to crowdfund the the initial jackpot through let's say donations through like a bunch of people and then give this people kind of like rights to decide where the money will go or something in that direction um but yeah if you have some ideas let's discuss maybe like token incentives yes um so I think you you found the right total dress book Market there's lots of gamblers on on blockchain so that's a good thing um my question would be like the what is what is brog with the traditional lotteries like what is wrong with with those lotteries that's something that I wasn't able to to see in a presentation yeah so I mean the fact that there are some intermediaries is already like a bit of an issue that can be solved like most of the lotteries you know like National Lotteries have like 9% operational costs that can basically be reduced to I don't know 80% less I haven't done the numbers yet but um another thing is like they're also monopolized so um they are basically the ones who decide to which public goods the money that they collect go go to so uh if we make it permissionless then anybody can create the lottery and then to that specific cost and then people who want to play the lottery they can support that specific CA um yeah I think those are the main ones cool now I actually I actually agree with you and if I'm looking at my phone that's cuz I'm using it for making notes so um and and I actually agree with you actually lotteries do make sense as a use case for blockchain um and I think that's that's great that you're exploring that especially for things like public goods because I think you can do a lot of good deal with this type of mechanism because as T quickly pointed out gambling is very popular over cryptocurrency and this is you know lotos are a form of gambling so you know would say for that reason there's a reason why today we have icos and IPOs and we don't all have lotos to build coliseums and I think there's good reasons for that now I'm on this stage to actually eval valuate um your project as an investment and the problem that I have with that is that this seems more like a charity it's a public goods project and people might participate in the lottery for fun or to support something that they like and I think that's great I'm not I'm not against charity but if I'm evaluating as an investment it doesn't make sense to even turn this into an investment because as soon as you do you potentially introduce wi seeking and that that makes the system less efficient and potentially more corruptible as well so you know for that reason I'm afraid I'm going to have to give a bit of a lower score cuz I do believe I need to evaluate this as an investment so um yeah I I would say those are my main um comments on that um thank you cool thanks yeah I think um Justin you're is absolutely right like how can we evaluate this is an investment you were saying 9% operational cost for traditional lotteries you're going to bring it down down to 1% can we assume that 1% of every lot lottery ticket sold is going to this protocol or how can we see as an investment um indeed so that's also one of the things that we're exploring you know like um we actually compare this a lot with um with dexes so we think like because once the code is out it's going to be very easy to replicate and then copy it so we think like the the protocol with biggest liquidity or like the lottery with the biggest price pool uh will be the winner let's say so if uh the the best way to solve that is through creating indeed like a more sophisticated protocol H that can potentially also provide some incentives to let's say token holders who own this this network basically so there's definitely um stuff that we're thinking about that you know um we would' love to explore a little bit more in depth but uh we like lotteries are very profitable so if we put them on the blockchain I think we can make them even even more uh add a contrarian opinion here I disagree with the previous statements from the other judges um I think it could be a good investment um and public goods funding the these types of instruments can can be profitable I think with the magic of tokens right um in that like if there's like let's say a 1% cut of of the funds that are um you distributed to public goods uh 1% goes to some treasury where the token holders can hold you know that that could provide some underlying value to the tokens um so as like it's definitely not like a a mature investment but I think like for a high-risk Angel type investment could be viable but it's like you know High RIS high but that's why my question around like getting the TPL right like if you that's like you got to get out millions and millions right um much like hundreds of millions and then that's when the token actually has some like strong value yeah indeed like um maybe when we go off the Record we can talk about like what we've been exploring about the token side of things but uh yeah love the lovely comment true it's not it's not a security yeah than something for you to think about in terms of your incentive design in the future if I could just add is that the thing is if you have a lot of mechanism to fund public goods there's the issue that there's more of a disconnect between the incentives of the investors slash gamblers um in terms of uh you know their success in the lotto like some people might just invest because they think they're going to win the lotto and it's not exactly as good as um appropriating funds like say Ico mechanisms are so that's just something for you to think about as well yeah and and I I will say I suppose for a very degenerate investor what you said earlier is s i could be on board with that pretty DJ I agree on the DJ thank you judges I'm going to turn to the audience um any question from the audience and I'll just grab them one of the mics and go back and forth I have a question sorry first one was in my field of hey so I brought this up when we were talking offline as well but the issue with Current public goods funding is that it's the demand side right it's like people fund stuff that they know people fund like Bank lless gets funds V of capital people who have raised V of capital get public goods funds so that's the issue right how does something like this solve the issue um so uh can you repeat the question how do I not distribute the lottery to my friends all right yeah yeah yeah so in we see this more as a kind of like part of the uh public goods funding toolbox where you know like U let's say gitcoin um octant all like there's a lot of players who focused on resource allocation more I guess um and we see this as the piece that's more like for Capital formation let's say like to incentivize people to actually donate because well how Bitcoin works right now is just uh the incentive is that it will be matched with with some funds but there's no real intrinsic motivation that indeed like works in the real world with normal lotteries so I think um we could explore like also resource allocation but I think like it might be smart to just really focus on the kind of like Capital formation for hi uh I'd like to know if you've thought of actually showing these to current lotteries that already exist as a way that they can enhance what they offer in order to also offer Public Funding because uh what I've noticed is that a lot of lotteries at this year in the Netherlands what they do is that they show that you can do many things apart from just being a lottery right they offer you know like a card and this sort of thing but have you thought like also telling them like hey there is more in blockchain that can be used on your lottery with this uh to be honest we thought to use it as a defense mechanism when they start knocking our door you know like uh hey you can actually use this why are you attacking us you but uh it's definitely like I mean right now there's really only National Lotteries happening because the rest are like either illegal or like super highly regulated so it's definitely going to be an approach to to tell them hey we have the infrastructure that can help you reduce costs I'm not sure they're going to want that actually but uh yeah it's a good great uh great approach to take there is a uh irony to solving public goods problems in cryptocurrency with gambling I just I mean I agree but we want to bring it together that's that's also why we created this Deion regions Community like regions are defined as these kind of like um Deion who wanted to turn their profits into something uh good you know like funding public goods and stuff like that so uh yeah it's ironical but I think it works especially in this space where everything seems to [Laughter] work so I want to understand actually who is our customer and how can you attract the first 100 or first 1,000 um yeah so I would say it really depends what approach we take so like if we take the approach of kind of like creating a protocol that allows to so the way we're think about it is um incentivizing kind of like a main lottery um that is fed through kind of like sub lotteries um it's just an idea that we were exploring just recently but um so the way it would work so these organizations that want to fund their their uh initiatives those would be the the initial customers let's say if we take that approach the other one is like if we create a big lottery then the the customers will be really like just web three gamblers or three people um and um yeah the the way to get each is different one requires more business development you know talking to let's say gitcoin first or like looking through the the uh projects that have applied to gcoin that we can tell you can also use this mechanism um on for like let's say normal users it requires a lot more heavy marketing you know like uh just social media Med and stuff like that all right I'm going to take one last question from the audience and just let people know that there's a few more seats here and bean bags so if you don't want to stand on the side of the stage you already said that um lotteries are either illegal or highly regulated where are you in this space and how how long will it take for you to get a a license to do so yeah so I think that's the the interesting part that's why we need lawyers to to explore but to because the main problem that we've been facing is that we don't feed so there's in most jurisdictions kind of two types of of um licenses one is like the operational license and the other one is like the software provider license license for example the Netherlands doesn't need if you're a software provider for lotteries you don't need or gambling you don't need a license you can just sell it um but we're not sure we fit that category because like people are actually interacting with it especially we have a front for the lottery and people are directly interacting with it so but at the same time we're also like how many jurisdictions Define operating is just like the people who have the contact of the of the customer which we don't because like everything happens through through the contracts contract so it's a very great area and um yeah that's why we like to relate to the Unis swap example you know like to decentralized exchanges because like they should also need a license but U they they don't operate with a license because there's no like there the requirements are not needed for for that so yeah that's how we're thinking about it all right thank you so much nick uh I'm going to now invite the judges to give do you have any final comments or questions for him before you decide or are you ready to give your final fin grade final grade time an explanation of that said no cheat so yeah I gave it a give it a six you got to you got to turn it around no no no it's fine like this I give it a six I uh I can see it succeeding um the only part is the tokenomics for me uh but also the attracting the users that's one of the guys in the audience asked I think maybe uh introducing points or air drops is something that works really well so going to the first thousand uh user is going to help with airdrops um and that's why I give it a six I want to see where it goes uh tvl wise but also where investors are able to get return um so that's why I give it a a six I give it 7.5 um I think it's a good project good idea pretty pretty original I think it solves a a a um a good problem in the crypto space so it's good to see more public goods funding uh as a focus here uh of course there's huge huge challenges with like regulatory stuff uh and then also you know tvl or just navigating that entire space so very challenging space but it's sort of a high risk return type thing all right I will say if I if I were to evaluate this as a charity or the good that you're doing in the world I would rate it very highly but I'm here to evaluate it as an investment and that' be a free for me um no surpris I'm going to be the most pessimistic one out of the bunch here but I I do actually like what you're doing and I I will say it actually makes sense to use a blockchain for this which is always something that I think is a very important requirement and you know this is the type of thing that historically also has worked on blockchain so I think that's that's fantastic and I wish you the best with it so oh uh sorry okay being told I need to be more of a bad cop here so terrible investment you you cannot add uh any sort of investment perspective because it would add rent seeking to the system and it misaligns the incentive of the lotto participants from the actual success of the project itself is that better okay good thank [Applause] [Music] you