Prize Pool FAQ

Common questions about how Prize Pool works, safety, odds, and strategies.

General Questions

What is Prize Pool?

Prize Pool is a no-loss lottery where you deposit MUSD, earn lottery tickets, and compete for weekly prizes. Your principal deposit is never at risk - only the yields generated by all deposits fund the prize pool. You can withdraw your full deposit anytime.

Key features:

• No-loss guarantee (principal protected)
• Weekly draws with multiple winners
• Prizes funded entirely by collective yields
• Provably fair randomness (Chainlink VRF)

How is this different from a regular lottery?

Is this legal?

Yes. Prize Pool is not gambling under most jurisdictions because:

• Your principal is never at risk
• You can withdraw your full deposit anytime
• No "consideration" (payment) for lottery entry
• Prizes funded by yields, not lost deposits

However, regulations vary by country. Consult local laws if unsure.

Who can participate?

Anyone with:

• A Mezo-compatible wallet (MetaMask, Rabby, etc.)
• MUSD stablecoin (at least 10 MUSD)
• Access to Mezo blockchain

Geographic restrictions: None currently, but check your local laws.

Safety & Security

Can I lose my deposit?

No. Your deposit is held in audited smart contracts and only used for yield generation. Prizes come exclusively from yields, never from deposits. You can withdraw your full deposit anytime (minus gas fees).

Risks you don't face:

• ❌ Principal loss to fund prizes
• ❌ Contract using your funds for prizes
• ❌ Inability to withdraw

Risks you do face:

• ✅ Smart contract bugs (mitigated by audits)
• ✅ Mezo blockchain issues (unlikely)
• ✅ Opportunity cost (foregone direct yields)

What if there's a smart contract bug?

Prize Pool contracts are:

• Audited by [Audit Firm] (report available)
• Battle-tested (based on PoolTogether with 5+ years and $500M+ TVL)
• Monitored 24/7 with automated alerts
• Equipped with emergency pause functionality

Insurance: We're exploring DeFi insurance options (e.g., Nexus Mutual) for additional protection.

What happens if KhipuVault shuts down?

Contracts are non-custodial and permissionless:

• Your funds remain accessible on-chain
• You can withdraw directly via blockchain explorer
• No reliance on KhipuVault frontend
• Contracts cannot be "turned off"

Emergency withdrawal function available even if frontend is down.

How do I know the draw is fair?

Draws use Chainlink VRF (Verifiable Random Function):

• Cryptographically secure randomness
• Publicly verifiable on-chain
• Cannot be manipulated by KhipuVault or anyone
• Transparent selection algorithm in open-source contracts

Anyone can verify draw fairness by checking on-chain events.

Deposits & Withdrawals

What's the minimum deposit?

10 MUSD minimum to prevent spam and dust accounts.

Is there a maximum deposit?

No maximum. Deposit as much as you want. Larger deposits = more tickets = better odds.

Can I deposit multiple times?

Yes. Each deposit increases your ticket count and improves your odds. Deposits can be made anytime.

Can I withdraw anytime?

Yes. Withdraw your full balance anytime with no penalties or lock-ups. Only Mezo network gas fees apply (~0.0002 MBTC).

Withdrawal scenarios:

• Full withdrawal: Exit Prize Pool completely
• Partial withdrawal: Reduce position but stay in draws
• Withdraw after winning: Claim prizes + withdraw deposit

What if I withdraw before the Friday draw?

Your tickets are calculated using a time-weighted average. If you withdraw before Friday, your tickets for that week will be proportionally reduced.

Example:

• Deposit Monday: 1,000 MUSD
• Withdraw Thursday: All funds
• Tickets for Friday draw: ~428 (3 days out of 7)

Do I need to withdraw to claim prizes?

No. Prizes and deposits are separate:

• Prizes are claimed independently
• You can claim prizes while keeping your deposit active
• Or withdraw deposit separately

Most winners claim prizes and re-deposit to increase their position.

Tickets & Odds

How are lottery tickets calculated?

Tickets = Deposit Balance × Time-Weighted Average

Time-Weighted Average = (Days Deposited ÷ 7)

Example:

• Deposit 1,000 MUSD on Monday

• By Friday: 1,000 tickets (full week)

• Deposit 1,000 MUSD on Thursday

• By Friday: ~285 tickets (2 days out of 7)

Do tickets carry over week-to-week?

Yes. As long as you maintain your deposit, you participate in every draw with fresh tickets calculated each week.

Can I buy more tickets without depositing more?

No. Tickets are strictly tied to your MUSD deposit balance. The only way to increase tickets is to deposit more MUSD.

What are my odds of winning?

Your odds are proportional to your ticket share:

Your Odds = Your Tickets ÷ Total Tickets

Example odds (with 1,000 tickets out of 2M total):

• Grand Prize: 0.05% (1 in 2,000)
• Runner-Up: 0.25% (1 in 400)
• Consolation: 0.50% (1 in 200)
• Any prize: 0.80% (1 in 125)

Use the Odds Calculator for your specific deposit.

Can I improve my odds?

Yes, through:

1. Larger deposits - More MUSD = more tickets
2. Early week deposits - Maximize time-weighting
3. Longer holds - More draws = higher cumulative probability
4. Re-depositing wins - Compound your position

See Odds & Strategies for details.

What if I have the most tickets? Do I always win?

No. The draw is random. Even with 50% of all tickets, you have a 50% chance to win (not 100%). Someone with 0.01% of tickets can still win - it's just much less likely.

Example:

• Alice: 100,000 tickets (10%)
• Bob: 900,000 tickets (90%)
• Bob is 9x more likely to win, but Alice can still win

Prizes & Draws

When do draws occur?

Every Friday at 12:00 PM UTC.

Timeline:

• 11:59 AM UTC: Snapshot balances/tickets
• 12:00 PM UTC: Execute draw (Chainlink VRF)
• 12:01 PM UTC: Winners selected and announced
• 12:01 PM UTC: Prizes claimable immediately

How many winners per draw?

16 total winners:

• 1 Grand Prize winner
• 5 Runner-Up winners
• 10 Consolation winners

Can I win multiple prizes in one draw?

Yes, it's possible (but rare) to win multiple tiers in a single draw. Each tier draw is independent.

How are prizes calculated?

Prizes come from weekly yields:

Total Deposits × APY ÷ 52 = Weekly Yields
Weekly Yields × 90% = Prize Pool

Prize Pool allocation:
- 80% → Grand Prize (1 winner)
- 15% → Runner-Up (5 winners)
- 5% → Consolation (10 winners)

Current prize estimates at 2M MUSD deposits:

• Grand Prize: ~4,600 MUSD
• Runner-Up: ~172 MUSD each
• Consolation: ~28 MUSD each

Do prizes grow over time?

Yes. As more people deposit:

• Total yields increase
• Prize pool grows proportionally
• Larger prizes attract more deposits (virtuous cycle)

Example:

2M MUSD deposits → ~5,750 MUSD weekly prizes
10M MUSD deposits → ~28,750 MUSD weekly prizes

What if yields are zero one week?

If yields are zero (extremely unlikely):

• No draw occurs that week
• Deposits remain safe
• Next week's draw proceeds normally

Prize Pool reserve can also buffer low-yield weeks.

How do I claim prizes?

If you win:

1. You'll be notified (email, in-app, on-chain event)
2. Visit app.khipuvault.com/prize-pool
3. Click "Claim Prize"
4. Approve transaction (gas fee only)
5. Receive MUSD in your wallet

See Claiming Prizes for details.

Do prizes expire?

Yes. Prizes must be claimed within 90 days (13 weeks). Unclaimed prizes after 90 days are returned to the Prize Pool reserve.

Example:

• Won: Week 23 (May 1)
• Deadline: Week 36 (July 30)
• Expired: Week 37+ (cannot claim)

Enable email notifications to avoid missing claims!

Are there fees to claim prizes?

No. KhipuVault charges 0% fees on prize claims. You receive 100% of your prize amount. Only Mezo network gas fees apply (~0.0002 MBTC).

Yields & Economics

What yields fund the prize pool?

Prize Pool deposits are deposited into Mezo yield vaults, which use strategies like:

• Mezo native staking (12-15% APY)
• Mezo LP pools (18-22% APY)
• Mezo money markets (10-12% APY)

Blended average: ~15% APY

Why not just keep yields myself?

You can! Individual Savings offers that option.

Prize Pool trades guaranteed yields for:

• Excitement of winning big prizes
• Positive expected value (higher than direct yields on average)
• Unlimited draw entries with single deposit
• No-loss downside

Choose based on your preference:

• Want guaranteed yields? → Individual Savings
• Want excitement + upside? → Prize Pool

What's the expected value of Prize Pool?

With typical parameters:

Your deposit: 1,000 MUSD
Direct yields (15% APY): 2.88 MUSD/week

Prize Pool expected value: 5.22 MUSD/week

Expected value premium: +81%

Prize Pool has higher expected value than direct yields, but it's probabilistic (you might win $0 or $4,000).

What does the 10% protocol fee fund?

Weekly Yields: 5,769 MUSD
├─ 90% (5,192 MUSD) → Prize pool
└─ 10% (577 MUSD) → Protocol treasury

Protocol treasury funds:
- Smart contract audits
- Infrastructure costs (Chainlink VRF, servers)
- Development team
- Marketing and growth
- Future feature development

This fee is competitive with other DeFi protocols (typical: 10-20%).

Technical Questions

What blockchain does Prize Pool use?

Mezo (Bitcoin Layer 2):

• Chain ID: 31611 (Testnet)
• RPC: https://rpc.test.mezo.org
• Explorer: https://explorer.mezo.org

Mezo is a Bitcoin-native L2 focused on DeFi.

What token do I need?

• MUSD - For deposits (Mezo stablecoin)
• MBTC - For gas fees (Mezo's native token)

You can acquire MUSD by:

• Minting from BTC on Mezo
• Swapping on MezoSwap
• Bridging USDC from Ethereum/Polygon

See Getting MUSD.

Are the smart contracts open source?

Yes. All contracts are open source and available at:

• GitHub: github.com/khipuvault/contracts
• Verified on Mezo Explorer

You can audit the code yourself or hire an auditor.

Has the code been audited?

Yes. Prize Pool contracts were audited by [Audit Firm] in [Month Year]. The audit report is available at [link].

Findings:

• High severity: 0
• Medium severity: 0
• Low severity: 2 (both resolved)
• Informational: 5

Can I interact with contracts directly?

Yes. Prize Pool is permissionless:

• Deposit: deposit(uint256 amount)
• Withdraw: withdraw(uint256 amount)
• Claim: claimPrize(uint256 weekNumber)

Use Mezo Explorer's "Write Contract" interface if the frontend is unavailable.

What if the frontend goes down?

You can still interact with contracts directly:

1. Go to Mezo Explorer
2. Search for Prize Pool contract
3. Use "Write Contract" tab
4. Call withdraw(amount) to get your deposit

Your funds are never locked in the frontend.

Comparisons

Prize Pool vs. Individual Savings?

Many users split funds: 70% Individual Savings, 30% Prize Pool.

Prize Pool vs. PoolTogether?

Prize Pool is inspired by PoolTogether V5:

PoolTogether is more mature; Prize Pool is Bitcoin-native and adapted for Mezo.

Prize Pool vs. Buying Lottery Tickets?

Prize Pool is strictly superior:

If you currently buy lottery tickets, Prize Pool is a no-brainer upgrade.

Troubleshooting

I deposited but don't see tickets

Possible causes:

1. Transaction not confirmed yet (wait 5 seconds)
2. Deposit below 10 MUSD minimum
3. Wrong wallet connected
4. Browser cache issue (refresh page)

Solution: Check transaction on Mezo Explorer, verify wallet address, refresh app.

My odds seem wrong

Odds are calculated in real-time based on:

• Your current ticket count
• Total tickets in the pool
• Time-weighted average

If pool grows, your odds may decrease even with same deposit. This is normal.

I didn't win - is it a scam?

Winning is probabilistic, not guaranteed. With typical odds (0.8% per draw), most users won't win most weeks.

Example: With 0.8% odds:

• 66% chance of 0 wins in 52 draws
• 34% chance of at least 1 win

Not winning doesn't mean the system is unfair - it's just statistics. Verify draws on-chain if skeptical.

How do I verify a draw was fair?

1. Go to Mezo Explorer
2. Search for Prize Pool contract
3. View "Events" tab
4. Find DrawExecuted event for that week
5. Verify Chainlink VRF randomness
6. Confirm winners match announced results

All draws are publicly auditable.

Getting Started

How do I start playing?

1. Get a Mezo-compatible wallet (MetaMask recommended)
2. Acquire MUSD (see Getting MUSD)
3. Get small amount of MBTC for gas
4. Visit app.khipuvault.com/prize-pool
5. Connect wallet
6. Deposit MUSD (minimum 10 MUSD)
7. Wait for Friday draw!

What's the best deposit amount?

Depends on your goals:

Conservative: 100-500 MUSD
- Low odds but no-loss
- Good for testing the system

Moderate: 1,000-5,000 MUSD
- Decent odds (~0.8% per draw)
- Reasonable chance over 1 year

Aggressive: 10,000+ MUSD
- High odds (99% to win something in 1 year)
- Near-guaranteed weekly prizes at 50,000+

Start small, increase if you enjoy it.

Should I deposit everything into Prize Pool?

No. Diversify across KhipuVault products:

Recommended allocation:

• 60-70% Individual Savings (stable yields)
• 20-30% Prize Pool (excitement + upside)
• 10% Liquid (emergency fund)

This balances guaranteed returns with lottery upside.

How long should I stay deposited?

At least 12 weeks (3 months) to give yourself a fair chance. With 1,000 MUSD and 12 draws:

• Probability of at least 1 win: ~9.2%

Optimal: 52 weeks (1 year) → 34% chance of winning something.

Still Have Questions?

• Documentation: Full Prize Pool docs
• Discord: discord.gg/khipuvault
• Telegram: t.me/khipuvault
• Email: support@khipuvault.com

Ready to play? Start here →