Hive Base Layer Lottery: Using HBD To Fund
We often delve into the building on Layer 2 with regard to Hive. This is by design since the base layer is meant to be tight in terms of the features it offers. Due to this, the idea is to push as much out to the second layer as possible, protecting the base from threat of attacks.
That said, we do have core functionality that can be accessed by different applications and games. We know this due to the front ends that provide blogging and some other social media utilities. There is also the account management system which all Hive based applications use.
We recently discussed Ragnarok and how it would access the HBD savings to generate a prize pool. The basic idea is to have an ongoing stream of money from the interest to offer ever growing prizes. All in-game transactions use HBD, all of which is moved into savings. This can be thought of as a permanent funding mechanism, growing over time to provide more value to the game.
From this, we happen upon a concept that could be used for other purposes.
In this article we will discuss the idea of a base layer Hive Lottery.
Hive Lottery System
Could be build out a lottery similar to what Ragnarok is doing? We all know how popular these are, especially when payouts become large. Is this something that we could create on Hive with an ever growing pot?
Obviously, we simply follow the Ragnarok model.
Looking at the existing lottery system, perhaps we hold a monthly drawing. An application is built which allows people to buy "tickets". Using some random generator, we can have 6 numbers spit out and a person receiving this. Perhaps each ticket could be tied to a NFT system built on the second layer.
We could use the 1 HBD per ticket. Throughout the month, people buy the tickets, pushing HBD into the wallet. This is then placed in savings where it earns interest.
Over time, as more HBD is deposited, the amount of interest each month will grow. This is the prize for the lottery.
The payout structure couple be as such:
- 80% of interest going to the lottery payout
- 10% moved to savings to keep building the funding pool
- 10% to the Decentralized Hive Fund (DHF) to help funding that.
We know US based lottery systems use the funding from the state lotteries for education. On Hive, we could do something similar.
This would be something ongoing. Obviously, in the early days, we have a case where the lottery prize is small. However, it will keep growing each month, possibly reaching massive numbers.
Imagine the attention that Hive could receive if the payout was 1 million HBD in a month.
Advantages To Hive
This is a simple idea that could have huge advantages to Hive.
To start, we see the attention that can eventually be generated. We have a tendency to want to promote Hive. Many claim that the marketing of the applications is a better path to take.
Here we have a prime example of something that is easy to promote. Pushing the idea of a lottery on Twitter or other social media is a fantastic way to garner interest.
We also would have to create a bunch of Hive accounts. Unless there is some way to do this with light accounts, each person would require both an account and some resource credits to operate. Remember that transferring HBD still requires access to the chain. Of course, the application could delegate a bit of RC to allow for the transferring of HBD.
HBD would also be given a use case, pushing demand. The simple fact is that HBD would be the only coin accepted. That means people would likely need to get $HIVE and swap it on the internal market. Another possibility is going through different liquidity pools (or someday DEX) and bridging it over. Either way, demand for HBD would increase.
HBD Creation Center
Much like the state lotteries, we use this as a creation center for HBD. In an upcoming post I will discuss a blockchain code change that could really enhance the Ragnarok/Lottery idea as it applies to a time vault. For now, we will simply use the existing technology for our mental model.
The idea here is that HBD enters the wallet yet it does not leave. Hence we have a situation where the circulating supply of HBD is not truly reflected in the numbers. If there is a percentage locked up in projects like this, we can see how the float is actually diminished.
It is similar to the HBD that is in the Decentralized Hive Fund. Technically, it is HBD that exists. However, due to the way the funds are released, it is of no threat to the ecosystem. The same would apply here.
That said, unlike the DHF, the HBD would be part of the interest pool. This would establish a baseline of HBD being created. Nevertheless, it is a "slowing" of the circulation, at least with regards to the HBD used here.
For example, let us say there is 1 million HBD placed in this wallet. Before that move, we had 1 million HBD in circulation. After it was done, it effectively is no longer available for general use. It does, however, generate 200,000 HBD per year. Thus, we have a 5 year time period before we return to the previous level. This will make more sense when tied to the next post.
Multiple Projects
The final piece to this puzzle comes from open source. This could be duplicated across many different applications. Since it is operating at the base layer, the front end could be open source.
What this means is that any community or application could effectively create its own lottery. The payouts might change as the community sees fit. Nevertheless, it could be something that front ends build in as an added feature for their users. Perhaps this doesn't get into enormous numbers but even a 10K HBD prize is significant.
The point being is that Hive is behind all of this. If this feature is incorporated in many games or applications, we could see demand for HBD increasing. At the same time, the applications can likely start to incorporate the coin into the payment system since it is already there.
Here is how we build around the base layer coin.
As stated, the next article will entail a time vault idea that takes all of this to another level.
In Conclusion
There is an added benefit to all this which we will delve deeper into.
If we incorporate the upcoming idea, we can see how there will be greater control of the money supply as it pertains to HBD. Having 10 million locked up in a time vault let's us know how much HBD is going to be generated. This is something that is worthwhile to know.
A lottery is an idea that can help to feed Hive on many different levels. It also can provide an enormous use case for HBD.
What are your thoughts. Let us know in the comment section below.
If you found this article informative, please give an upvote and rehive.
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really great idea! Let's get this rollin'
As I will show tomorrow, to truly make this realistic we have to add some things.
But there is potential there.
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Lotteries give the options of lump sum payment, which is less than the cash value of the prize; or annual payments over so many years, which ultimately adds up to the prize.
By annuitizing the prize, the lottery savings could grow faster. And, by locking away the value over 10 or 20 years, I think it adds staying power to the blockchain.
It's likely most players would want the lump sum, even if it's not the full amount. Even a modest prize of $1000HBD goes a long way in some parts of the world.
Simple and smart, Hive has amazing potential and while we see one project tapping into it with one use case, others will follow. In such times I simply wished I was a developer. :)
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Yeah. There is actually a larger piece to all this. We can use this to be more powerful for the ecosystem. There is a monetary control component to it.
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I already have an lottery idea, but where people don't have to constantly buy tickets but just hold like a dividend paying token, but it choose 5 different people every month and cap people at holding 100 tokens any tokens over that, is not considered in the lottery.
So an investment token payout as a lottery. Sounds like fun to me :D
But a real lottery system as we knows it could also be funded by hbd
There are many different ways to do this. The specifics of the lottery itself are open to debate and adjustment. Here the main premise is the idea of HBD savings/lock up as a powerful feature to build around.
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Yes ofcouse!
It would be powerful to use hbd for that aswell :D
Great idea Task, considering how the lottery jackpot pot increases and lures people into trying their luck, replicate such an idea on Hive will be awesome. And yes we are discussing an app that potentially could bring the masses home.
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People seem to be drawn to lotteries.
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Wow, I like the idea.
I like the idea of limiting people to buy hive and HBD to do the work, play and invest here. That would keep the demand for the hive.
I like this idea, with only one caveat. 6 numbers makes no sense, we'd see the first winner in many years. Choosing one random winner any month makes much more sense IMO.
The specifics of the lottery itself arent the focus right now. We have to look into the integration of the base layer feature of the blockchain.
Obviously how the lottery itself works is varible until it would be developed.
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This sounds like a great idea. My only question would be the legalities. I'm not sure who would police this or what kind of authority would be able to exert control over it, but you'd have to think the governments would want to get involved somehow.
I mean, imagine if this blew up and there got to be $10M in HBD underneath this. That's $167,000 a Month in prizes! The current lottery takes out the taxes before they send you the rest. How would this fit into those rules? Especially when the winner could be from literally any country on the planet.
Like I said, I have no idea who or what could try and police a decentralized forum, but someone would have to be running it. And they would be the single point of failure. Unless it could all be done by a completely hands-off smart-contract...? Maybe it gets built inside the DHF and everything is done automatically?
Seriously though, if this little lottery were to percolate for a few months, even years, you would think eventually it would get big enough to hit the mainstream. At that point, it could grow to epic proportions. The Powerball can pull in $400 million over 3 days when the jackpot gets high. This would have a month...and the jackpot would never go back down. It would just keep growing. Crazy to think about....
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There is nothing they could do about the HBD, the savings account, or the distribution of rewards.
The only thing governments could do is to target the URL. If the software is open source and many url are tied to the wallet, then taking one out would be of no consequence.
Distributed, decentralized, and open source makes governments impotent.
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I'm not questioning you but I find it hard to believe they wouldn't try to find a way to insert themselves. If there's that much money at stake, I'm pretty sure they'd take an interest to some degree.
Best thing to do would be to try it and find out, right? :-)
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Very interesting. I think there are a lot of applications for this. They could maybe even do some kind of virtual 50/50 drawing for fund raising. I think having NFTs to add legitimacy to the claim is a good idea too. I think it will have to be a witness to start this. People are going to be very cautious and afraid of being scammed. It will take the right kind of person or group to make sure it is done fairly and right.
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There are a lot of different possibilities.
As for the project, it would take someone developing and tying in. You will see based upon the next article how much is solved. The payouts would have to be coded into the software somehow.
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I'll be keeping an eye out for it!
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Hive have the potential to be anything and this makes hive a hidden gem from the rest of the world. The way you analyze how hive will succeed with lotteries makes me wonder if there is something impossible with hive?
I love this idea
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Yes smart contracts. This can be solved on layer 2.
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Great idea I wish it will be implemented by hive community because an idea is just an idea until it's implemented
Another thing is why we can't use hive coin for this, why HBD should be preferred or used over HIVE coin in Ragnarok prize pool and Hive Lottery System HLS prize pool ?
I ask same question yesterday but unfortunately you not understand my point, I think hive coin should be preferred because it's deserved more attention especially if both Ragnarok and hive lottery system becomes successful
$HIVE is a value capture coin. It has volatility tied to it. HBD is the stablecoin which is designed for payments. This is why the focus upon HBD. Value has to be built on that also.
With $HIVE, the price could be worth $10 or 20 cents. That would affect the prizes greatly.
HBD does not present that issue.
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Those are some really well thought out ideas. Let’s see if they can come to life.
This is a good use case, a good interface and some backend fixes would suffice to adjust the lottery functionality.
I am currently designing an architecture for an application focused on sports, similar to what hivebuzz did with the world cup. But with its own interface and covering more sports, I think it would attract a good number of users. For my part I would like to get sponsors to move forward with the project.
Psychologically, making $2 off a blog post is far less appealing than making "a lottery ticket." I could see that making a big difference to motivation levels.
I think this is a great idea because the pool is always growing and there are a ton of people who gamble.
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I have never been a fan of the lottery and gambling systems of the world, having probably spent enough to buy a vehicle over the years and seeing not nearly that much come back. That said... a donation to a cause, with a chance to win a pot, doesn't bother me as badly, as I would be expecting to lose the money with my intent to help the cause anyway and anything coming back would be considered a blessing.