Blockchain case study – Quanta and lotteries

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Here is another case study from our report on blockchain. This time it is about lottery company Quanta. For more on Quanta, further case studies and, of course, further information on blockchain and its applicability to gambling, please see our report published this week.

Like prediction markets, another area where blockchain could have promising role is the establishment of decentralised lotteries. For a case study on blockchain-based lotteries, we are examining the Quanta platform developed by Vietnam-based Cardano Labo - a blockchain research and development startup focusing on blockchain-powered gaming services.

Quanta plans to launch a global blockchain lottery with ticket sales offered where jurisdictionally permitted and sold as a white label solution in other markets. According to Cardano Labo, Quanta's "decentralised autonomous lottery" is designed to run "automatically and autonomously" without a central authority or possibility of manipulation of outcomes.

Quanta is using Ethereum-based smart contracts to provide the unseen automation and non-malleability of different lottery processes, including random number generation, issuing and storing lottery tickets, winner selection, and prize payouts. As purchases on the blockchain need to be made in cryptocurrency, participants will need to use cryptocurrency wallets with special lottery purchase plugins or mobile money through cryptocurrency exchange

The lottery platform's developer indicates that Quanta promises to pay-out up to 85% of ticket sales to winners. The remaining 15% will be "transparently allocated to shareholders, operators and governmental agencies" as return on investment, profits or funding for social programs. This is in contrast to traditional lotteries when in many cases as little as 45% of revenue is distributed as prizes for winners.

On the lottery platform itself, Quanta’s smart contracts are the backbone of the lottery logic. This includes the actual "draw" after the final random number is generated from the RNG smart contract as well as storing users' tickets received from seller smart contracts and prize pay outs. Quanta will offer a native crypto token, dubbed QNT, that will play a role in the lottery process.

Currently Cardano Labo is developing the Quanta and seller smart contracts, testing different methods for winner selection. The RNG smart contract on Quanta is an implementation of the RANDAO algorithm. The more advanced RANDAO++ algorithm implementation will be trialed in the next phase of Quanta product development.