Block Chain based CRYPTO CHIT FUND

[ynvinay]

I am thinking of an Ethereum smart contract, which works mostly like Chit Fund
Indians are familiar with chit fund, but not others.
Read wiki if you need to know more about Chit funds -  https://en.wikipedia.org/wiki/Chit_fund


My idea is more or less like a lottery, but executed in the form of chit fund.

A smart contract, which will collect Ethers/Cryptos from contributors and randomly select a winner to whom the entire
collected money will go to. There is no roll over and every draw will have an winner for sure.

There can be a public chit fund OR a private chit fund. Public is something which anyone can participate.
Private is something which is played in small groups, say within friends circle, Collegues etc.

The web-end will have all the facility to create and manage new groups Public / Private etc., Number of winners, Prize %, Display pool money and contributors details,draw details etc. At the back end it works on block chain / Smart contract.

The smart contract will automatically decide the winner and send the pool money to the winner.
During the start of the group, you can decide if u want 1 winner or multiple winners.

If it is public chit fund, Better to put a cap on the limit; If the maximum limit is reached, then automatically new
game will start. Say eg., one draw for every 100 ethers.  If cap is not reached, then the contract will execute and decide the winner for
whatever money is pooled. Web end will allow users to Launch new draws and set the limits.

One person can buy any number of tickets.  The contributors id / Sl no, pool money collected, and other details will be constantly updated and displayed on the website.

A small % of money from each draw is kept by the promoters for admin related expenses.

Not sure if any app is already there which works on this model.

I welcome any comments / suggestions on improvement, legal issues, technical issues, suitable platform  etc to make this workable.

[1714799477]

1714799477

[kittucrypt]

I am thinking of an Ethereum smart contract, which works mostly like Chit Fund
Indians are familiar with chit fund, but not others.
Read wiki if you need to know more about Chit funds -  https://en.wikipedia.org/wiki/Chit_fund


My idea is more or less like a lottery, but executed in the form of chit fund.

A smart contract, which will collect Ethers/Cryptos from contributors and randomly select a winner to whom the entire
collected money will go to. There is no roll over and every draw will have an winner for sure.

There can be a public chit fund OR a private chit fund. Public is something which anyone can participate.
Private is something which is played in small groups, say within friends circle, Collegues etc.

The web-end will have all the facility to create and manage new groups Public / Private etc., Number of winners, Prize %, Display pool money and contributors details,draw details etc. At the back end it works on block chain / Smart contract.

The smart contract will automatically decide the winner and send the pool money to the winner.
During the start of the group, you can decide if u want 1 winner or multiple winners.

If it is public chit fund, Better to put a cap on the limit; If the maximum limit is reached, then automatically new
game will start. Say eg., one draw for every 100 ethers.  If cap is not reached, then the contract will execute and decide the winner for
whatever money is pooled. Web end will allow users to Launch new draws and set the limits.

One person can buy any number of tickets.  The contributors id / Sl no, pool money collected, and other details will be constantly updated and displayed on the website.

A small % of money from each draw is kept by the promoters for admin related expenses.

Not sure if any app is already there which works on this model.

I welcome any comments / suggestions on improvement, legal issues, technical issues, suitable platform  etc to make this workable.

A lottery and chit fund are completely different options.  Your idea seems to be a lottery for which there are already several options.

[Patatas]

Had someone approach me this the other day,this is what I told them

 - The 'chit-fund' is never going to work out as who would take the guarantee of every member that he pays his part of the amount every month ?
 - Who would hold all the funds ? An escrow,an automated system ? Who can you trust the most ?

 - What if a user takes his part of the money and runs away ? What happens in that case ? Who will continue his part of the share for rest of the time ?

[ynvinay]

Yes.  Ths is more of a lottery than a chit fund.

No monthly payments....its only one time payment and get into the lottery draw. So no running away...

I know there are many lottery with block chain concept like FireLotto,TrueFlip etc. wherein the participants
pick six numbers and also it rolls over if no number is matched. Its similar to traditional lotto.

In our case, we pick from the participating members., the pool money goes to winner/s.  Also there is a cap on
participants and total amount and hence more transparency and winning chances are more.

[kittucrypt]

Yes.  Ths is more of a lottery than a chit fund.

No monthly payments....its only one time payment and get into the lottery draw. So no running away...

I know there are many lottery with block chain concept like FireLotto,TrueFlip etc. wherein the participants
pick six numbers and also it rolls over if no number is matched. Its similar to traditional lotto.

In our case, we pick from the participating members., the pool money goes to winner/s.  Also there is a cap on
participants and total amount and hence more transparency and winning chances are more.

The very fact that lottery prize money is rolled over makes it more attractive. Because people like to have a chance to win $1,000,00 rather than to win $1,000. Every month as the pot becomes bigger and bigger, more people start joining in.

[Patatas]

Yes.  Ths is more of a lottery than a chit fund.

In that case,please change the title it's misleading.

No monthly payments....its only one time payment and get into the lottery draw. So no running away.

Again who would hold this money and what is the guarantee they won't run away with the money ?

I know there are many lottery with block chain concept like FireLotto,TrueFlip etc. wherein the participants
pick six numbers and also it rolls over if no number is matched. Its similar to traditional lotto.

Which means the market is already saturated and no new services will be welcomed gratefully.

In our case, we pick from the participating members., the pool money goes to winner/s.  Also there is a cap on
participants and total amount and hence more transparency and winning chances are more.

That is technically how every lottery works.The winning chances will always depend on the number of participants.How would you earn money if you give all the pool money to the winner ? You know that's a lie.

[ynvinay]

Again who would hold this money and what is the guarantee they won't run away with the money ?

This is where the smart contract comes into picture.  The smart contract will hold the money and automatically pick the winner and send it to his wallet directly.  The smart contract program will be open to view by anybody.  Whoever trusts can put money into smart contract.
Its highly transparent. No tampering...no human intervention, once the smart contract is deployed.   Smart contract acts like an escrow.

Which means the market is already saturated and no new services will be welcomed gratefully.

May be you are right.
But I personally believe there is nothing like saturation...Over a period of time the old apps are pushed aside to make way for a promising new contender.  New format of Lottery with new ideas will always emerge. This is how facebook killed orkut, even though they were offering more or less same services....but FB came up with more innovations.

That is technically how every lottery works.The winning chances will always depend on the number of participants.How would you earn money if you give all the pool money to the winner ? You know that's a lie.

Yes. The admin charges and promoter charges need to be increased.  Lets say 10%.  On this platform, anybody can start his own Lottery.., its like a lottery market place.  He will earn 5% of the collected amount and 5% goes to the platform.  To start a game, he will have to shell out some fixed charges to the platform.  These are few ideas i have about the monetizing.

[ynvinay]

The very fact that lottery prize money is rolled over makes it more attractive. Because people like to have a chance to win $1,000,00 rather than to win $1,000. Every month as the pot becomes bigger and bigger, more people start joining in.

This is akin to small society lottery. Small is the USP.  The odds of winning in small pool is higher. There are many people out there who are happy with small things. Small, affordable and transparent. 

It will be like a marketplace.  The Lottery creator will decide what will be ticket cost, Upper cap, Draw date etc.   The platform will also put a limit on the higher cap.  Based on the cap, the platform charges will differ.   Say i want to create a lottery of  300eth, then the creator should shell out more platform charges, apart from giving 5% of the collection charges.  If it is less than 100eth he should be able to do it for cheap.

[kittucrypt]

The very fact that lottery prize money is rolled over makes it more attractive. Because people like to have a chance to win $1,000,00 rather than to win $1,000. Every month as the pot becomes bigger and bigger, more people start joining in.

This is akin to small society lottery. Small is the USP.  The odds of winning in small pool is higher. There are many people out there who are happy with small things. Small, affordable and transparent.  [/b]

It will be like a marketplace.  The Lottery creator will decide what will be ticket cost, Upper cap, Draw date etc.   The platform will also put a limit on the higher cap.  Based on the cap, the platform charges will differ.   Say i want to create a lottery of  300eth, then the creator should shell out more platform charges, apart from giving 5% of the collection charges.  If it is less than 100eth he should be able to do it for cheap.

I doubt thats the case with lottery though. People who buy lottery, do so in hope of a major payout.