Sponsors

We got the goods!

Sponsors create a lottery by defining its parameters and writing them to a smart contract. Sponsors have full control over the parameters of their lotteries, and these parameters are completely transparent to Participants.

Examples of Sponsors include:

• Clothing and Accessory Brands (Nike, Supreme, Yeezy)

• Electronics and Gaming Platforms (Playstation, ASIC Cards)

• Ticketed Events (Musicians, Sports Teams)

• Certain fungible and non-fungible token releases

• Physical Art Collections

Sponsor Interface and Dashboard

After connecting their wallet to the system, the user accesses the Sponsor interface within the platform.

The Sponsor Interface and Dashboard includes:

• User Settings

• Sponsor Reputational Scores

• Lotteries in Progress

• Lottery History and Metrics

• Access to Sponsor Token smart contract (mint and distribute)

• Access to Lottery smart contract for lottery creation

Sponsors can run as many concurrent lotteries as they like, determining the parameters for each independently.

Sponsor Tokens

Sponsors can mint ‘Sponsor Tokens’ and issue them to Participants. Sponsors can create and issue as many types of tokens at they like (such as a general token, a Spring collection token, etc), and in any quantity, but once created are only issuable by that Sponsor. Sponsor tokens are used by Participants to improve the probability of winning a Sponsor’s lotteries.

Each Sponsor Token is tied to a specific wallet address. However, once issued, they are tradable between users.

These tokens are given purely at the Sponsor’s discretion and Participants typically earn them through brand interaction, promotion, and community building. They can also be earned by participating in lotteries. Sponsor Tokens are discussed in further detail in both Participants as well as in the Tickets, the Pool and Ticket Weight Factor.

Each Sponsor token is tied to a specific Sponsor wallet address. However, once issued, they are tradable between users.

Sponsor Veracity and Reputation

As a decentralized platform, there is no centralized check on the authenticity of any information the Sponsor inputs to their profile. Thus, the tradeoff to decentralization is that anyone can claim to be a brand offering a Drop. A number of mechanisms are used to disincentivize and filter out bad actors from the platform.

First, we expect most Sponsors to use one wallet address for Lotteries and validate this address on verified social media accounts they control. In addition, all users will have access to every Sponsor’s lottery history. This history includes both rollups and details on individual lotteries, including number of entrants, total amount staked by Participants, and winning ticket details (the stakes and tokens).

Sponsor identification can be simplified by Sponsors adopting ENS names.

Sponsors are also encouraged to fully collateralize their lottery by locking value into the winning NFTs, discussed in Collateral.

Additionally, there is a Reputational Scoring System which serves to verify the legitimacy of the Sponsor. It consists of two separate scores:

1. Distribution Score – This Score indicates the distribution of Sponsor Tokens (sum of all types) outside of the Sponsor’s Wallet. This is important to show that the Sponsor is not concentrating Tokens in a few users, potentially indicating collusion between a Sponsor and certain Participants. We use a modified GINI coefficient calculation to derive this score. See Distribution Score Function for more information and a mathematical description.

2. Feedback Score – After participants win a lottery, they have the ability to give a simple positive signal back to the Sponsor. Typically, this will occur after the winners redeem their item from the Sponsor. Participants are incentivized to send the signal, however, as it helps the Sponsor whose assets they own and support. The feedback score is a percentage of the number of positive signals divided by the total number of winners. It omits any lotteries conducted within the previous three weeks to allow for fulfillment.

$$Feedback Score = \Sigma(PositiveFeedback) / (\#TotalWinners)$$

There is a third score that is less effective in determining Sponsor authenticity, but is an important characteristic of the Sponsor and helps them derive a metric-driven value from the platform. It is called the Hype Score, and it is a measure of the difference between the sum of the Sponsors purses and the Total winning stakes the lotteries took in (called the lottery’s Residual).

$$HypeScore=\Sigma(WinningLotteryStakes) / \Sigma(LotteryPurses)$$

For a dApp platform without governance, the system needs to be secured purely through reputation. As it evolves into a DAO, additional safeguards can be made through governance and other methods of verification. For example, Sponsors can submit for Verification, or use a system such as the one used by Proof of Humanity, where other users stake value in support of a Sponsors claim at the risk of getting their stake slashed if it is determined they are working in collusion with a bad actor.