The platform has currently raised more than half of its objective, and the NFT fundraising campaign will finish in another 21 days.
PoolTogether, a decentralized finance (DeFi) platform that promotes itself as a “no-loss lottery,” has raised 470.90 Ether (ETH) from nonfungible token (NFT) sales to fund its legal defense against a putative class action lawsuit.
PoolTogether is already more than midway to its aim of raising at least 769 ETH ($1.5 million at the time of writing) to fight what it deems a “meritless” lawsuit. Before the NFT financing campaign closes, the platform has another 21 days. On its NFT minting page, it asserted:
“PoolTogether Inc. is a defendant in a putative class action lawsuit. A person deposited the equivalent value of $12.00 into the protocol and is now suing PoolTogether Inc. and others for substantial damages.”
Joseph Kent, the former technology director for Senator Elizabeth Warren’s 2020 presidential campaign, is heading the class-action complaint. In January, Ken started action against the project, its founder Leighton Cusack, and several of its associated partners after depositing approximately $12 worth of stablecoins into the system.
Kent claims that PoolTogether is conducting an illegal lottery in New York. According to an amended lawsuit submitted in February, the platform “may never offer a positive expected value” because it keeps up to 50% of each weekly win as a reserve.
Kent is demanding compensation equivalent to doubling the number he spent on lottery tickets in PoolTogether and twice the decent amount of attorney’s fees and legal expenses.
PoolTogether claims to be capable of providing risk-free lotteries on stablecoin deposits by creating interest with the money of ticket buyers and liquidity providers using DeFi lending protocols.
The lottery winner gets the most profits, while the runner-ups receive a smaller fraction. All other registrants will be paid in full. PoolTogether’s site says that it presently has $80,436 in weekly prizes offered across its v3 and v4 pools.
PoolTogether claimed that the “allegations lack merit, but a comprehensive defence is still necessary,” citing a January Wall Street Journal report that indicated that the case looks to be “a purposeful attempt to put some of the DeFi community’s central concepts to the test.”
So far, the community has displayed tremendous support for the campaign, with 2,416 NFTs sold for 470.90 ETH, which is valued at approximately $911,959. The platform will have raised 1,076 ETH, or about $2.2 million if all NFTs are sold.
The NFTs include a purple animated avatar named Pooly and are present in 3 levels of rarity and pricing: the supporter tier includes 10,000 NFTs for 0.1 ETH each, and the lawyer tier contains 1000 NFTs for 1 ETH each, and the judge tier has 10 NFTs for 75 ETH each.
Notable individuals in the space, such as Andreessen Horowitz’s general partner Chris Dixon have also contributed to the effort by obtaining one of the 75 ETH judge NFTs available.
The plaintiff also shows disgust for cryptocurrency overall, explaining why the community has gathered around PoolTogether. Kent is “gravely concerned” that the cryptocurrency business is “accelerating climate change and allowing people to avoid capital controls and swindle customers.”