YIP YAM Lottery proposal

YAM Lottery proposal

Basic Summary

Elasticity token with a treasury created by YAM can be a valid fundamental model for a lottery system. Token price is relatively stable, treasury can accumulate a prize pool for the lottery. So, I propose a Yam lottery protocol alongside the Yam protocol. I am also volunteering to implement the protocol (but I don’t have solidity background even I am an experienced software engineer, need some mentoring from the community experienced solidity software engineer).

Abstract

The lottery project will be a new elasticity token YAM lottery token (YLT) with its own treasury (prize pool). Yam treasury provides a reasonable amount of yUSD (propose for 50k-100k yUSD for now, can be altered according to discussions, but needs to be attractive for people) as the seed lottery prize fool to kick off the project. After that, the rebase system can collect stable tokens for the treasury and draw the prize. People can mint YLT to get NFT ticket for the lottery, the NFT ticket will be destroyed after the prize draw. To avoid legal issues, the new protocol will be named as YAM airdrop. Please advise me if there is anything technically impossible.

Motivation

  • It can be a very interesting marketing point to attract people to join the YAM community.
  • Make a simply usage of the treasury.
  • Can bring some values to YAM holders.

Specifications

Numbers in this section may not be thoughtful.

Initial Distribution:

  • 10% YLT will be airdropped to all YAM holders.
  • Long term ETH/YLT and USDT/YLT incentive LP pools will be created.

Minter:

There will be a minter to burn YLT to NFT lottery tickets.

Rebaser:

YAM lottery will have a high frequency rate (rebase each hour) of rebase for:

  • Avoid get listed on CEX to make CEX wallet a whale.
  • Dilute the selling pressure from each rebase time.
  • Each rebase will take 1% of the printed tokens to buy USDT as the treasury.
  • The max slippage of each buying is also up to 1%.

Treasury:

The treasury will store mainly USDT. Lottery project don’t have any money gain requirement for the treasury, so just use the most widely used stable token.

Safety considerations:

To avoid whales to hold all the tickets to empty the treasury, YAM lottery will use quadratic or other nonlinear formulas to nerf the tickets number in to the price draw for each account.

There will be also a protection function when people have more than 15% of the change to win will be excluded from the prize draw

Prize draw:

Prize draw will happen on prize pool reaches a curtain number, 20K USDT may be a good starting point.

50% of the pool will be evenly distributed to 5 lottery ticket holders.

When prize draw happens, 1% of the prize pool will be sent to YAM treasury.

When prize draw happens, 5% of the prize pool will be airdropped to YAM holders.

Legal issues:

Online lottery can have some Legal issues, We may make the project an airdrop project.

Poll to Measure Sentiment

  • For
  • Against

0 voters

5 Likes

It’s a good idea!! It’s a good idea!!

nice nice good good good

I mean, I think this could potentially be a cool idea

But a lottery would expose the YAM Team Members and the YAM project in general to significant legal risk.

even if we call it an airdrop instead of a lottery, we should be careful with complying with laws and regulations if we pursue this.

2 Likes

yes, minimize the legal risk is a premise for this project.

Maybe the fact that it’s decentralized governance reduces the legal risks? Since it’s not the team that is voting to do this.

In general US regulatory bodies aren’t afraid to overstep, especially when it comes to unregulated financial schemes like lotteries. I don’t support this proposal, as it has too many things we can’t control, and it gives dubious benefit (and is likely detrimental to) the growth of YAM. Just gonna post a list, in no particular order, of the things that I don’t like about this:

  • I don’t like the addition of another token. I don’t see the point. This would suck value away from YAM, since you’d basically just be moving value from the treasury to the YLT token
  • Rebasing every hour will be expensive. It doesn’t stop CEXs from listing.
  • USDT is a ticking time bomb
  • “To avoid whales to hold all tickets to empty the treasury” is pointless since the whale can just hold in multiple wallets
  • The legal issue around the gambling makes it so I wouldn’t personally want to develop this because I don’t want regulatory bodies knocking on my door, and I assume the same for most of the original team members
  • In general there are many, many unanswered technical questions here. How do we safely create randomness? Who operates this? Why a new token? Does this give any benefit to YAM?

In general I think there are just many more productive uses of our time/money than developing a lottery system

4 Likes

In a couple of weeks, PoolTogether is releasing V3’s no-loss lotteries. As I understand it, the protocol can be utilized by any one who wants to. Not sure how user friendly it is to create unique no-loss lotteries.

However, I agree that creating a new lottery YAM token is distracting.

1 Like
  • I don’t like the addition of another token. I don’t see the point. This would suck value away from YAM, since you’d basically just be moving value from the treasury to the YLT token

YCP also contains new token. We can directly use Yam and yam treasury, but i dont think it make sense to directly interactive with the current treasure. The new treasury can give yam treasury a percentage each time to enlarge yam treasury.

  • Rebasing every hour will be expensive. It doesn’t stop CEXs from listing.
    The first part is true, the second part is not, i pretty sure CEX has problems listing elasticity token, i did talk to people from Huobi. of course it is not impossible, but surely have some problems.

  • USDT is a ticking time bomb
    Everything is a time bomb, defi has bugs, usdt has regulation problems. This can be easily switch to DAI or other stable tokens.

  • “To avoid whales to hold all tickets to empty the treasury” is pointless since the whale can just hold in multiple wallets
    Nothing can stop that, this is a valid point.

  • The legal issue around the gambling makes it so I wouldn’t personally want to develop this because I don’t want regulatory bodies knocking on my door, and I assume the same for most of the original team members
    agree, legal issue is the biggest issue.

  • In general there are many, many unanswered technical questions here. How do we safely create randomness? Who operates this? Why a new token? Does this give any benefit to YAM?
    On chain random is a challenge, but i think it is not impossible. It brings YAM some other income to treasury, and attract people in another way…

It’s a good idea!!!!!!

The US has all the resources in the world to take down companies that don’t abide by their laws. There may be companies can weather a lawsuit, but Yam does not have the size or scale to do this. The risk of putting together a lottery is too high.

Best case: We have a lottery with few winners. Yay!

Worst case: We all lose. Yam’s value is gone through fines and cease/desist letters by governing bodies, unless KYC policies implemented and enforced. Founders/developers interviewed by law enforcement at a minimum. Sure, it’s DeFi, but that doesn’t imply immunity.

I assume the worst case scenario assuming Yams have worth and assuming the lotterys’ value is meaningful (big enough to get the attention of the government).

High risk, low reward

2 Likes

YCP also contains new token

Not exactly. YCP doesn’t have it’s own protocol token, at least as the YCP documentation stands. It has tokens that represent a claim to cash flow

The first part is true, the second part is not, i pretty sure CEX has problems listing elasticity token, i did talk to people from Huobi. of course it is not impossible, but surely have some problems.

Second part is definitely true. CEXs may get not currently be set up to quickly onboard elastic tokens, but I imagine with the rise in popularity they’ve gotten lately that it is only a matter of time before CEXs are set up to just plug in a few parameters to list arbitrary elastic supply tokens

Everything is a time bomb, defi has bugs, usdt has regulation problems. This can be easily switch to DAI or other stable tokens.

Agree that USDT isn’t a big issue here since it could be any stablecoin

On chain random is a challenge, but i think it is not impossible

Definitely agree that it’s not impossible, but it’s very difficult to do in a truly decentralized way. This would likely end up with some central operator that “seeds” randomness, and it could be made so that couldn’t cheat, but they would still have that “operator” title that opens them to regulatory scrutiny