Wallet lottery to increase Fin. ID

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Over 25 years entrepreneurial experience in profit and non-profit. Now connected to an NGO with over 600 global projects (120M per year).

This idea is improved, thanks to the constructive comments below

First some context

How can we encourage developers and entrepreneurs to build Dapps and businesses on top of Cardano in the next 6 months?

Basically, people who are unaware of Cardano, shall not contribute. I believe that there are a huge group of potential developers that does not even know we exist. The wallet-lottery is aiming at three goals.

1. To create awareness and an accessible way for people to attend the wallet lottery. And by doing so creating a financial ID.
2. Within that group of attendees there are for sure developers who are then introduced into the wonderful world of Cardano. I will not be surprised if the first attendees consist mostly of technical oriented people. But I might be wrong in that assumption.
3. The wallet-lottery is a fundraiser for charities. Isn't it nice that we not only help participants in 3rd world countries to get easy access to a financial ID, but that they indirectly supporting/ improving their local environment due to activities of local active charities?

Introduction

Attached to the proposal is a schematic presentation. The proposal starts with the strategy of the wallet-lottery, complete with a numeric example. I elaborated on some points of the strategy.

We currently have a team of 4 people:

Erik Zevenbergen (me): entrepreneur: https://www.linkedin.com/in/erik-zevenbergen-2936461/ (focus is Marketing and recruiting)

Pieter Nierop: entrepreneur, developer: https://www.linkedin.com/in/pnierop/ (focus is Marketing and development)

Ingmar Matthezing: entrepreneur, developer: https://www.linkedin.com/in/ingmarm/ (focus is architecture and development)

Tom Breuker: entrepreneur: https://www.linkedin.com/in/tombreuker/ (focus is Marketing and recruiting)

After the strategy below, we go into the timeline of the proposal. The timeline is currently limited to the first 6 months. This is also the timeframe of the challenge.

Finally, finance. I will explain the funding and the pledging/investing. Both are given a "reward" based upon the wager-stakes. More important, how is that ADA spend. And how the wallet-lottery is self-sustainable after 6 months.

Strategy of the Wallet-lottery

The purpose is to get 2 million participants within the first 6 months. To do that we will recruit a salesforce of about 50 people in areas with low penetration of financial ID's. To motivate locals to participate in the Wallet-lottery and create a financial ID, we motivate them with a 5ADA giveaway that can only be spent on the Wallet-lottery.

Also there should be a possibility for people to join via mobile phone, taking also into consideration that the internet connection can be bad.

1. Currency is ADA (this can later extend to other currencies when interoperability on Cardano is realized)
2. The address of the wallet used for paying the wager is the entering the lottery. Winnings are directly returned to that same wallet (to be regulated with smart contracts).
3. 50% of the wager stakes goes to charity. Focus is on charity that (among other things) focus on bringing internet connection to the people in 3rd world countries
4. 35% of the wager stakes goes into prizes
5. 1% of the wager stakes is distributed as ROI among pledgers
6. 0.04% of the wager stakes is contributed to the treasury (as a ROI of the funding).
7. 13.96% of the wager stakes is for covering the operational costs (marketing, accounting, charity management, ambassadors (PR), HR).

Focus is 3rd world countries. Object is to create awareness for blockchain applications and the advantage of having a financial ID. The lottery should act as a trigger for people to create a wallet. Once they see the advantages, the accessibility to more (useful) applications is increased.

Numeric example

• Wager stakes 100,000,000.00 per month 1,200,000,000.00 p/y
• Charities 50% 50,000,000.00 is 600,000,000.00 p/y
• Prizes 35.00% 35,000,000.00 is 420,000,000.00 p/y
• Operational costs 13.96% 13,960,000.00 is 167,520,000.00 p/y
• Reward for pledgers 1.00% 1,000,000.00 is 12,000,000.00 p/y
• Reward for treasury 0.04% 40.000 is 480.000 p/y

Some elaboration on the strategy

Ad 3. 50% of the wager stakes goes to charities

Everyone can recommend charities. Charities will be ranked in order by the community (voting) Ranking decides the ratio of donations (to be decided)

Ad 4. 35% goes into prizes

There is a fixed prize-model. (to be decided)

Example of a prize-model (with the aim for people to keep participating):

• Fixed larger prize (0.1% of the wager stakes) every month (from the example: 120,000,000.00 each time 14,400,000.00 p/y)
• Fixed smaller prize (0.025% of the wager stake) every week (300,000.000 each time 15,600,000.000 p/y)
• 10 times a game in a game: prize 0.5% of the wager stakes (6,000,000.00 each time 60,000,000.00 p/y)
• 4 large prizes (2% of wager stake) per year (24,000,000.00 each time 96,000,000.00 p/y)
• 2 time a year a prize of 10% (120,000,000.00 each time 240,000,000.00 p/y)

Additionally there also might be extra small unanounced prizes as an extra incentive. E.g. 10 - 50 ADA)

Ad 5) 1% of the wager stakes is distributed as ROI among pledgers

We want to motivate every new participant (without a financial ID) with 5 ADA. These 5 ADA can only be spent on participation of the wallet-lottery. Given that one round in the Wallet-lottery cost 1 ADA, they can participate 4 times (given the transaction fees). Since we aim at 2 million participants (in 6 months) we need 10 million ADA pledged of invested. Also see the Financials.

Ad 6) 0.04% of the wager stakes is contributed to the treasury

The 0.04% is related to the 400.000 ADA funding in relation to the 1% reward to the 10 million pledged/invested. Also see the Financials

Timeline

Below you find the timeline for the first six months. After month six it is the roll-out of the Wallet-lottery

• Month 1 – 3
  Recruiting the 50 local marketeers / sales force in Asia and/or Africa.

• Month 3 – 6
  Local marketeers / sales force persuading locals to create a wallet for the lottery. I am thinking of giving every attendee an incentive of 5 ADA, only to be spend on the wallet-lottery (smart contract). People without a financial ID are mostly poor. A small incentive can get us a great way.
  The wallet-lottery will cost 1 ADA to attend. Meaning they can participate 4 times and hopefully find enough motivation to continue afterwards. With 50 local marketeers/salesforce we aim at about 1 to 2,000,000 attendees in 6 months. Cost: 10 million ADA (hence the pledgers/investors).

• Month 1 - 3
  Writing the marketing plan and building the app. We have 2 experienced programmers now studying Haskell, Plutus, Marlowe. I have applied for testing Marlowe, since I am also a SME on finance. However it would be great to get support from within our community!

• Months 4 -6
  Testing, testing, testing

• Month 7:
  Launch of the first wallet lottery (to be continued on a weekly basis)

Finance of the proposal

The first six months

The first six months are focused on recruiting 50 salespeople to get 2 million locals to participate. Next to recruiting the 50 participants, we also need marketing material (including a website) and develop the Wallet-lottery.

Funding

The requested funding is 400.000 ADA. The funding is to cover the first six months in the following way:

• 200.000 ADA for salesforce salaries:
  Bases upon experience in Asia, we believe that a local recruiter/marketeer/salesforce should be awarded with about 100 USD per month. A salesforce of 50 person, for 4 months equals 20.000 USD. Given the current price of ADA, that means about 200.000 ADA.
  Note: probably we can make a smart contract to regulate the pay-out to local marketeers. E.g. in the beginning a salary related to the number of applicants. Later changed to: active new participants (paying 1 ADA per week) should be higher than X to pay out the salary? I am sure people can come up with a smarter way.

• 200.000 ADA for development of the Wallet-lottery and marketing material.
  We want the maximum cost of development to equal the cost of sales. The real development cost will be higher.
  The 200.000 ADA is also used to create a pilot to attract more pledgers/investors.

Pledging / investing (not funding)

I do not know the correct wording: pledging or investing? The money should come from pledgers/investors in our community. The total amount we are looking for is 10,000,000 ADA

• We want to motivate 2 million people with 5ADA each to join the Wallet-lottery. This is will be pledged or invested by our community, not funded out of the treasury. The reward is 1% of the wager stakes every week.

Month 7 and further (self-sustainability)

After the wallet is ready, the Wallet-lottery should be self-funded. 13.96% of the weekly wager stakes is allocated to operational cost. The costs are to pay marketing, continuous improvement, financial control (accountancy) and management. This is open for discussion, but we are thinking of the following:

• Marketing: 50% (growing the participants)
• Finance: fixed fee to be negotiated
• Management: fixed fee to be decided by the community (voting)
• Development: the rest.

Payment to management and finance should be fair. If people want to earn with the Wallet-lottery, they should pledge or invest in the 10 million. Of course, it is possible that in the future there will be multiple rounds for pledging/investing. This will be decided upon by vote.

After six months the funding (and increasing) of the salesforce is based upon their own success. For the monthly salary we need 50.000 ADA for the initial 50 salespeople. That is also half of the operational cost. Since we have 4 Wallet-lotteries a month (approx.), we need only to cover 25.000 ADA per round (=13.96% per Wallet-lottery. With 180.000 weekly participants, we already cover that.

We aim at 2 million participants. The surplus is used to further increase the salesforce dramatically and to improve with further development and marketing tools

Important note:
The percentages mentioned will all be discussed and voted upon. I can imagine a higher contribution to the treasury (5%?). The current 0.04% is based upon the original funding of 400,000ADA in relation to the 10,000,000ADA investing/pledging.