PoolTogether, a DeFi platform, has collected 470.90 Ether (ETH) from NFT sales to help fund its legal defense against a bogus class action lawsuit.
PoolTogether is now more than halfway to its target of raising at least 769 ETH (approximately $1.5 million) to fight a lawsuit it claims has “no merit.” Before the NFT financing campaign concludes, the platform has another 21 days. On its NFT minting page, it stated:
“PoolTogether Inc. is a defendant in a putative class action lawsuit. A person deposited the equivalent value of $12.00 into the protocol and is now suing PoolTogether Inc. and others for substantial damages.”
PoolTogether fundraising is to assist a lawsuit
Joseph Kent, the former technology lead for Senator Elizabeth Warren’s 2020 presidential campaign, filed a class-action complaint against the project, its inventor Leighton Cusack, and several of its related partners in January after depositing around $12 worth of stablecoins into the protocol.
Kent claims that PoolTogether is running an illegal lottery in New York and that the platform “may never offer a positive expected value” since it keeps up to 50% of each weekly win as a reserve, according to an amended lawsuit filed in February.
Kent is seeking compensation equal to twice the amount he spent on lottery tickets in PoolTogether, as well as twice the reasonable amount of attorney’s fees and legal costs.
PoolTogether claims to be able to offer risk-free lotteries on stablecoin deposits by generating interest with the money of ticket buyers and liquidity providers using DeFi lending protocols.
The lottery winner receives the majority of the proceeds, while the runner-ups receive a smaller portion. All other participants will be refunded in full. According to PoolTogether’s website, the company presently offers weekly rewards totaling $80,436 across its V3 and V4 pools.
PoolTogether stated that the “allegations lack merit, but a detailed defense is still required,” citing a January Wall Street Journal story that stated that the case looks to be “a purposeful effort to put some of the DeFi community’s key ideas to the test.”
So far, the community has shown great support for the campaign, with 2,416 NFTs sold for a total of 470.90 ETH, which is currently worth $911,959. The platform will have raised 1,076 ETH ($2.2 million) if all NFTs are sold.
The NFTs feature a purple animated avatar named “Pooly” and are available in three levels of rarity and pricing, with the supporter tier consisting of 10,000 NFTs going for 0.1 ETH each, the lawyer tier consisting of 1000 NFTs going for 1 ETH each, and the judge tier consisting of 10 NFTs in total going for 75 ETH each.
