We often delve into the building on [Layer 2](https://leofinance.io/@leoglossary/leoglossary-layer-2) with regard to Hive.  This is by design since the [base layer](https://leofinance.io/@leoglossary/leoglossary-base-layer-blockchain) is meant to be tight in terms of the features it offers.  Due to this, the idea is to push as much out to the second layer as possible, protecting the base from threat of attacks.

That said, we do have core functionality that can be accessed by different [applications](https://leofinance.io/@leoglossary/leoglossary-application) and games.  We know this due to the front ends that provide blogging and some other [social media](https://leofinance.io/@leoglossary/leoglossary-social-media) utilities.  There is also the [account](https://leofinance.io/@leoglossary/leoglossary-account) management system which all Hive based applications use.

We recently discussed [Ragnarok and how it would access the HBD savings to generate a prize pool](https://leofinance.io/@taskmaster4450/ragnarok-model-for-games-utilizing-hbd).  The basic idea is to have an ongoing stream of [money](https://leofinance.io/@leoglossary/leoglossary-money) from the [interest](https://leofinance.io/@leoglossary/leoglossary-interest) to offer ever growing prizes.  All in-game [transactions](https://leofinance.io/@leoglossary/leoglossary-transaction) use HBD, all of which is moved into savings.  This can be thought of as a permanent funding mechanism, growing over time to provide more value to the game.

From this, we happen upon a concept that could be used for other purposes.  

In this article we will discuss the idea of a base layer [Hive](https://leofinance.io/@leoglossary/leoglossary-what-is-hive) Lottery.

![image.png](https://images.hive.blog/DQmS1cT9EUB5MFY92FfneZa1f9X2AFYFFdFTJMovHT2b7K2/image.png)
<center>[Source](https://anchor-precisiongroup-uat-web.s3.ap-southeast-2.amazonaws.com/prancentral/media/blogs/4-benefits-of-playing-the-lottery.jpg?ext=.jpg)</center>

### Hive Lottery System

Could be build out a lottery similar to what Ragnarok is doing?  We all know how popular these are, especially when payouts become large.  Is this something that we could create on Hive with an ever growing pot?

Obviously, we simply follow the Ragnarok model.  

Looking at the existing lottery system, perhaps we hold a monthly drawing.  An application is built which allows people to buy "tickets".  Using some random generator, we can have 6 numbers spit out and a person receiving this.  Perhaps each ticket could be tied to a [NFT](https://leofinance.io/@leoglossary/leoglossary-non-fungible-token-nft) system built on the second layer.

We could use the 1 HBD per ticket.  Throughout the month, people buy the tickets, pushing HBD into the [wallet](https://leofinance.io/@leoglossary/leoglossary-wallet).  This is then placed in [savings](https://leofinance.io/@leoglossary/leoglossary-savings-account-hive) where it earns interest.

Over time, as more [HBD](https://leofinance.io/@leoglossary/leoglossary-hive-backed-dollar-hbd) is deposited, the amount of interest each month will grow.  This is the prize for the lottery.

The payout structure couple be as such:

* 80% of interest going to the lottery payout
* 10% moved to savings to keep building the funding pool
* 10% to the Decentralized Hive Fund (DHF) to help funding that.

We know US based lottery systems use the funding from the state lotteries for education.  On Hive, we could do something similar.

This would be something ongoing.  Obviously, in the early days, we have a case where the lottery prize is small.  However, it will keep growing each month, possibly reaching massive numbers.

Imagine the attention that Hive could receive if the payout was 1 million HBD in a month.

### Advantages To Hive

This is a simple idea that could have huge advantages to Hive.

To start, we see the attention that can eventually be generated.  We have a tendency to want to promote Hive.  Many claim that the marketing of the applications is a better path to take.

Here we have a prime example of something that is easy to promote.  Pushing the idea of a lottery on Twitter or other social media is a fantastic way to garner interest.

We also would have to create a bunch of Hive accounts.  Unless there is some way to do this with light accounts, each person would require both an account and some [resource credits](https://leofinance.io/@leoglossary/leoglossary-resource-credits-rc) to operate.  Remember that transferring HBD still requires access to the chain.  Of course, the application could [delegate a bit of RC](https://leofinance.io/@leoglossary/leoglossary-resource-credit-delegation-hive) to allow for the transferring of HBD.

HBD would also be given a use case, pushing demand.  The simple fact is that HBD would be the only [coin](https://leofinance.io/@leoglossary/leoglossary-coins) accepted.  That means people would likely need to get [$HIVE](https://leofinance.io/@leoglossary/leoglossary-usdhive) and swap it on the internal market.  Another possibility is going through different [liquidity pools](https://leofinance.io/@leoglossary/leoglossary-liquidity-pool-lp) (or someday [DEX](https://leofinance.io/@leoglossary/leoglossary-decentralized-exchange-dex)) and bridging it over.  Either way, demand for HBD would increase.

### HBD Creation Center

Much like the state lotteries, we use this as a creation center for HBD.  In an upcoming post I will discuss a [blockchain](https://leofinance.io/@leoglossary/blockchain) code change that could really enhance the Ragnarok/Lottery idea as it applies to a time vault.  For now, we will simply use the existing [technology](https://leofinance.io/@leoglossary/leoglossary-technology) for our mental model.

The idea here is that HBD enters the wallet yet it does not leave.  Hence we have a situation where the circulating supply of HBD is not truly reflected in the numbers.  If there is a percentage locked up in projects like this, we can see how the float is actually diminished.

It is similar to the HBD that is in the [Decentralized Hive Fund](https://leofinance.io/@leoglossary/leoglossary-decentralized-hive-fund-hive). Technically, it is HBD that exists.  However, due to the way the funds are released, it is of no threat to the ecosystem.  The same would apply here.

That said, unlike the DHF, the HBD would be part of the interest pool.  This would establish a baseline of HBD being created.  Nevertheless, it is a "slowing" of the circulation, at least with regards to the HBD used here.

For example, let us say there is 1 million HBD placed in this wallet.  Before that move, we had 1 million HBD in circulation.  After it was done, it effectively is no longer available for general use.  It does, however, generate 200,000 HBD per year.  Thus, we have a 5 year time period before we return to the previous level. This will make more sense when tied to the next post.

### Multiple Projects 

The final piece to this puzzle comes from [open source](https://leofinance.io/@leoglossary/leoglossary-open-source).  This could be duplicated across many different applications.  Since it is operating at the base layer, the front end could be open source.

What this means is that any community or application could effectively create its own lottery.  The payouts might change as the community sees fit.  Nevertheless, it could be something that front ends build in as an added feature for their users.  Perhaps this doesn't get into enormous numbers but even a 10K HBD prize is significant.

The point being is that Hive is behind all of this.  If this feature is incorporated in many games or applications, we could see demand for HBD increasing.  At the same time, the applications can likely start to incorporate the coin into the payment system since it is already there.

Here is how we build around the base layer coin.

As stated, the next article will entail a time vault idea that takes all of this to another level.

### In Conclusion

There is an added benefit to all this which we will delve deeper into.

If we incorporate the upcoming idea, we can see how there will be greater control of the [money supply](https://leofinance.io/@leoglossary/leoglossary-money-supply) as it pertains to HBD.  Having 10 million locked up in a time vault let's us know how much HBD is going to be generated.  This is something that is worthwhile to know.

A lottery is an idea that can help to feed Hive on many different levels. It also can provide an enormous use case for HBD.

What are your thoughts.  Let us know in the comment section below.

  ___
If you found this article informative, please give an upvote and rehive.



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