Lotto Overview and Interview
Lotto has streamlined, automated and decentralised lotteries, we sat down with the founder of one of the most exciting DeFi projects to come out.
25th April 2021, 21:30 GMT
As you may know, we at the Street Analysts have become increasingly engaged with blockchain and the future it offers in terms of decentralised networks, particularly DeFi. One of the projects we are especially excited about is Lotto. Lotto is a DeFi project that removes the traditional friction and barriers of lotteries, the result being a seamless, decentralised lottery that runs automatically with the whole process being orchestrated through a single transaction.
Not only is Lotto a display of innovation and execution within DeFi, but it is also symbolic of how the tide is shifting, with blockchain enabling further efficiencies in the future, the possibilities are endless.
The future of decentralised finance is particularly bright with crypto innovators such as Tyler Fallon, the founder of Lotto and Upfire, in the driving seat of change. We were therefore very excited to be able to sit down and chat with Tyler, discussing Lotto, DeFi and blockchain.
Below is my colleague Josh Moir’s interview with Tyler about Lotto (for his interview about Upfire click here).
Hello, this is Josh Moir from The Street Analysts here and today we have a very special guest who was previously featured on the 'Business of' interview series, Tyler Fallon and today we're talking about his project, Lotto. Tyler, thank you for taking the time.
Hi Josh, thank you for having me back again. Happy to be here.
So, for some of our audience who perhaps haven't read over our last interview, could you give a brief introduction about who you are or what you were doing before getting involved in blockchain and what you've been working on recently?
So I started working on my first project, Upfiring, from then, launched it at the end of 2016, beginning of 2017. It got pretty big. It's currently going through a rebrand, so still very, very excited about that project.
And as an extension of that, when I first found out about DeFi, I kind of had a similar reaction at the beginning of 2020 to when I first found out about Ethereum. I kind of realized that, wow, the entire financial space is going to end up moving into here, there's a financial incentive for people to store their money in something like Aave over, for instance, a regular bank because they earn interest in Aave. Right. So I was just thinking of like DeFi projects and my mind was on that for a few months. I was thinking, what do people want in the space and what's something that can be moved into the space. And I came up with Lotto after talking to a lot of people and we thought, why is there no cryptocurrency where one user can just essentially get rich, for lack of a better word, to have a bunch of tokens just appear in their wallet out of nowhere? Right. There's no real lottery, and especially one where you don't really have to do much work. We wanted to make this really simple, type of experience for users. And I kind of just felt like no one had done anything like this correctly yet.
Yeah, and then sort of delving a little bit deeper into that. Can you give us an overview of the concept and then obviously the tech behind Lotto and the ideas behind it and how it actually works?
Yes, so the way it works from the user standpoint is you acquire Lotto either from the airdrop for free or you can go buy it on an exchange. And once it's in your balance, on Tuesdays and Fridays at 8:00 p.m. EST, the start game function is called. It can be called by anyone, but, once that function is called, it initiates this lottery. 5 tokens are then pulled from every single Lotto address, they're pooled together and then they're all given to one user at random. The user doesn't have to do anything. They don't have to pay for gas. It's just like magic on the user's part. They just have their balance. If they have a thousand Lotto, all of a sudden Tuesday at 8pm comes around and boom, their balance switches to 995 and those five tokens go to the winner. Or if they win, they'll check their balance and they'll have like at the moment the jackpot like fourteen thousand something Lotto. They'll just see like thousands of dollars, according to Etherscan, worth of Lotto appear in their balance. So that's kind of what it looks like from the user's standpoint.
From our standpoint, it's a lot more complicated from a tech standpoint. There's a lot more going on where we are using an oracle service for randomisation. We are basically drawing a list of all the addresses that have more than 5 Lotto. We're sending it off to this service called Provable, we give them a list of addresses and they give us a provably random address back. Then that sends it back to the smart contract. The contract integrates it into the transaction, and then all of the participating addresses end up having their five tokens go to that one address, that Provable returned.
The crazy thing about this is the whole lottery happens in one single transaction. So when it's called, it's the start game function, once that transaction confirms, it just is like boom, just the lottery commences and everyone's balance is changed. So from the user standpoint, there's no easier lottery to play in in the world, you can buy a thousand Lotto and you can be in every lottery for the next 2 or 3 years and you never have to buy it again. You never have to acquire it again. So no trips to the store. And the jackpot is hopefully going to be just as good. It's a new project, it's growing.
Yeah, and then where did you get the idea for a token-based lottery? What was it that called out to you? Was it sort of random or were you really looking into where is this the hole in the market?
There's two criteria for this, number one, what's something that everyone can participate in, in the entire crypto space? My first project Upfiring or Upfire is really pretty incredible because no one has done anything like it yet, but it's very niche. Not everyone wants to use a file-sharing application, not many people file share. It's a very niche group of people that are into that sort of thing. But a lottery, that's something everyone can play in. And so my first criterion was to make something that everyone can play.
My second criterion was based on one thing that I've learned from being in the crypto space for as long as I have: everyone is here for money. I hate to say it because that's not how I feel about it. But I saw very, very clearly in both 2014 and especially in 2018 and 2019 that when the money disappears, everybody leaves. So at the end of the day, everyone can sit around and say that they that they're in the crypto space for the tech and that they're interested in the projects but I saw for myself that when the money dries up, you know... So it's an unfortunate reality of the situation but you have to accept it and you have to take that into account and say, ok, so people are here for money, let's just accept that. Let's address that, and kind of create something around that. So that's kind of where the idea for Lotto came in, we have something that everyone can play in and it's skipping right to the point. People want money and this is a project that gives them the chance at it. It's the only project where you can hold this token and have a massive number of tokens just appear in your balance. There's no other project like that or nothing else that can even remotely do that.
So all these people that come into this space and they look on CoinMarketCap and they're looking at which project can I buy? Or, you know, like they don't know anything about crypto. They're like, which one is going to go up in value? You don't have to worry about that for this project. You have all you need to do is acquire the token and just sit tight and let the lottery do its work. So that's kind of the premise here with why came up with it. And I just thought it would be a cool idea and something that no one has done before. I kind of had a breakthrough with the technical aspect of it where we figured out that we can alter everyone's balances in one single transaction, which is something that like no other projects can really do. So, yeah, it just kind of came together over the course of a few months.
Yeah, could you then sort of go into what sets Lotto apart from traditional lotteries? Why is lotto better, I suppose?
The first thing is that there's no borders, there's no boundaries on who can buy it, it's integrated with Uniswap and a bunch of centralized exchanges. So it's very readily available and anyone can buy it at any time from any country. The second thing is that you only have to buy it once, so if you want to play in a year's worth of lotteries, you can just buy like, you know, 300 days worth of Lotto and then you're done. You don't have to go to the store. You don't have to go on a website and buy tickets every week. It's not something you have to actively think about. You can buy the token. You can store it like any other cryptocurrency, but you're also in the lottery automatically.
So those two premises, and also there's a third thing, there's like a lot of thought that went into all this, by the way, like when I was designing it, one metric that tends to go up for projects even in a bear market, even when the prices of everything goes down 90 per cent, there's one metric that tends to go up regardless of the price pressures, and that's the number of token holders. So number of token holders for a project, if you look at something like Chainlink or UniSwap, UniSwap has like 110,000 token holders. Right. We might see the price of UNI crash from $35 down to $7 or $8 in the bear market. That seems about reasonable, but the number of token holders will not go down that much. If anything, it may even go up. So there's the same number of people holding it, there was just so much selling.
So this lottery takes advantage of that, the amount of Lotto won in the lottery is based on the number of token holders. So even if, say the jackpot is 14,000 Lotto right now, even if we enter a bear market, the jackpot is still going to be 14,000, 15,000, 16,000. The jackpot can still continue to go up. The lottery itself, most importantly, can continue to grow through the bear market. Yes, the price of Lotto may go down, but the lottery itself, in terms of growth, can continue to grow even regardless of what's happening in the crypto market. So there's just a lot of thought that went into designing this.
Yeah, I mean, that sort of leads on to my next question with how you're going to grow the lotto pool and how big the lottery is. I know that a lot of your team specialize in marketing, I believe. Could you talk a bit about how you're planning to acquire new users? I know you mentioned some of this is currently going through influencer marketing. Can you talk a little bit about this?
So much of the space right now is just influencer marketing, that's just kind of where we've gotten to a point where influencers are everything. If you look at NFTs, the reason that they're so popular is that they're being launched by influencers and celebrities. And so we're just kind of going with the flow, in that sense, we're working with influencers. A lot of them are making videos on Lotto. We're kind of just letting them know about the project, partnering with them. So that's one of the main ways.
Another way that we're doing it is through giveaways and events, we just started hosting the lottery on Tuesdays and Fridays on Discord. And we have giveaways for the hour leading up to the lottery. And like a lot of people come just for the giveaways and then they're because they're already there and the lottery, the actual lottery is the biggest giveaway. It kind of puts them in to looking into the project more, even if they were originally just there for the giveaway. So we have events, meme competitions, all sorts of different things to keep the community involved.
Ok, and then can you talk a bit more about the long term. What is your long-term vision for Lotto in a few years’ time? Where do you want to see it?
I honestly wanted to get to like 100,000 token holders, that's like the point where I would be able to actually sleep at night and be like, ok, cool. This was this is kind of where I envisioned it being. It's at 3000 token holders right now for reference, but we're only 2 months out of the gate. So that's my metric for the project, the number of token holders. A lottery is only as good as the number of people in it. Right. So a lottery between ten people is nothing but a lottery between hundreds of thousands or millions of people is really exciting. So that's the goal, to just get this number of token holders up to, baseline, like twenty thousand. 30,000 would be great, 10 times from where we are now, which I think is doable within the year. Long term I want it to be fully decentralized, like 100%, like I'm out of the picture and the lottery's just running itself.
Yeah, and talking about the decentralization of Lotto, why is Lotto not fully decentralized yet? Is it because, you need to grow it to a point that you think they can work on its own in the community and even on its own?
Well, there are a few things. Technically, yes, it’s decentralized right now, like anyone can go call to start game function and run the lottery. So technically it depends on how you're looking at it. It is decentralized, but more so what I'm referring to is we want there to be better incentives, for the project to maintain itself. So, like right now, if I were to step away from the project, yeah, users can call start game if they want to, but there's a gas fee associated with that and they may not want to call start game. And so, in the future, something that we're implementing, before I can say this is good, is a reward for the user that comes from the lottery, for the user that calls the start game function. Whoever calls it is going to receive a decent percentage from the lottery, up to 5% of the tokens. So then it will be a race between users to see who can call the lottery each week. That way the lottery will maintain itself guaranteed. And I won't have to oversee anything, you know. So there's a few things like that. It's like, yes, it's decentralized, but I just don't think the incentives are there yet, we still have a few changes we want to make.
Yeah, agreed. I think that's covered the bulk of what lottery is. Is there any additional information about lotto that you want to talk about today?
No, I think that that basically covers everything, we went into the details about how it works and all. Yeah, that covers it.
And then just so to finalize this brief interview, could you talk about where you think blockchain is headed in the near future? And is there anything specifically within blockchain that you're really excited about and you're really looking forward to developing in the next months and years?
Yeah, I think like the synthetic asset and like DeFi world is kind of the future of the space, for instance, if I wanted to buy a synthetic version of gold and store in my portfolio along with, like synthetic stocks and some Ethereum, I can store all those assets. I'm basically managing an entire portfolio but in a decentralized way. I think that's important as well as like, the DeFi incentives. And I think that within 10 years, 1/3 of the entire financial space is going to move into DeFi. It's just that we're just kind of getting out of the gate now in the last year. But I think that the incentive is there for this to happen. People are moving in and, yes, we're going to have bull and bear cycles like always. But overall, we're going to trend towards growth. So I see the DeFi space kind of being the main thing. When people talk about crypto in five years, that's kind of where I see us going.
Yeah, agreed. I mean, thank you very much for taking the time today to participate in this interview. A pleasure talking to you. We'll be linking the links to Lotto's website and also the Upfire article that we've just done and links to your new rebranded website. Thank you very much. Was there anything else you wanted to mention?
Tyler: Thank you so much for having me.
Pleasure chatting with you today.