Victory Vault Prize Pool

The Prize Pool is the core component of the Victory Vault protocol, facilitating the collection, management, and distribution of rewards to participants. It integrates with Victory Chain's staking infrastructure to provide no-loss staking rewards while ensuring a fair and transparent system for selecting winners.

Overview

The Victory Vault Prize Pool collects staking rewards generated by the pooled deposits and distributes them daily to randomly selected winners. The pool ensures:

No-Loss Participation: Participants retain their staked tokens and can withdraw them at any time.
Fair and Proportional Chances: Rewards are distributed using weighted randomness, giving larger stakers higher chances to win but ensuring even small stakers are eligible.
Exciting Rewards: Winners receive both staking rewards and unique real-world prizes, such as node licenses, event tickets, and exclusive experiences.

Key Features

1. Reward Generation

The Prize Pool stakes participants' tokens in Victory Chain's main staking pool to generate rewards. These rewards form the prize pool distributed to winners.

Staking Mechanism: Deposited tokens are pooled and staked collectively, optimizing reward generation and reducing gas fees.
Dynamic Growth: As more users stake in the Victory Vault, the prize pool grows, increasing the potential rewards for participants.

2. Randomized Winner Selection

Winners are chosen daily through a decentralized and provably fair randomization process.

Weighted Chances: The probability of winning is proportional to the amount of tokens staked.
Fair Opportunity: Small stakes remain eligible to win, ensuring inclusivity.
Secure Randomness: Powered by a randomness oracle, such as Chainlink VRF, to guarantee tamper-proof results.

3. Reward Distribution

The rewards are divided into two primary categories:

Staking Rewards: A significant share of the staking rewards generated by the pool is distributed to daily winners.
Real-World Prizes: Additional prizes, such as Victory Chain node licenses, sporting event tickets, and VIP experiences, are distributed alongside staking rewards.

Components of the Prize Pool

1. Deposit Pool

Collects tokens staked by participants
Tracks user balances to ensure accurate calculations of staking rewards and chances of winning

2. Reward Reserve

Accumulates staking rewards earned by the pooled deposits
Ensures sufficient rewards are available for consistent daily distributions

3. Prize Manager

Administers the distribution of real-world prizes
Keeps an inventory of available prizes and ensures winners receive them promptly

4. Randomness Oracle

Provides decentralized, provable randomness for winner selection
Ensures transparency and fairness in the reward allocation process

Mathematical Foundations

Stake Weight Calculation

Each participant's stake weight determines their chances of winning the daily prize:

W_i = \frac{S_i}{T}

Where:

$W_i$ : Stake weight of participant i
$S_i$ : Amount staked by participant i
$T$ : Total amount staked in the Prize Pool

Winner Probability

The probability of winning at least once in a single reward round:

P_i = 1 - (1 - W_i)^n

Where:

$P_i$ : Probability of participant i winning
$W_i$ : Stake weight of participant i
$n$ : Number of winners selected in the round

Reward Allocation

Staking rewards distribution formula:

R_i = \frac{W_i}{\sum W_j} \times R

Where:

$R_i$ : Reward allocated to winner i
$W_i$ : Stake weight of winner i
$\sum W_j$ : Total stake weight of all winners
$R$ : Total staking rewards available for the round

Example Scenario

Consider the following scenario:

Total Staked: 1,000,000 tokens
Participant A Stake: 10,000 tokens
Number of Winners: 3
Total Rewards: 50,000 tokens

Stake Weight Calculation:

Participant A Weight = 10,000 / 1,000,000 = 0.01 (1%)

Winning Probability:

P(A) = 1 - (1 - 0.01)³ = 0.0297 or ~3%

Potential Reward: If Participant A wins, their reward would be proportional to their stake weight relative to other winners.