# Prize Draw Program (WinNET)

> **Status: the Program is operating on mainnet.** Nightly draws settle on
> schedule, seeded by the public drand beacon described below. Contract
> addresses are published on [Official Channels](/official-channels) and
> nowhere else. Dollar figures on this page are the deployed program
> parameters, not a forecast of any prize.

The Prize Draw Program — consumer brand **WinNET**, served at
win.netnet.capital — is a **pooled staking arrangement whose periodic
distributions are allocated by random selection among participants**.
Participants deposit into a shared vault; the vault enrolls the pooled
balance in the Shareholder Dividend Program like any other shareholder; each
participant's principal is recorded as a **fixed quantity of NET**. The
dividend accrual on the pooled balance — the growth of the vault above the
sum of fixed principal claims, and nothing else — forms the prize pool.
Once per draw period (**nightly: three 8-hour dividend epochs**), one
participant selected at random, weighted by Draw Balance, will receive the
entire pool.

The consumer application speaks plain English by design. This page is the
long-form disclosure it links to, and it is the controlling description of
the mechanics.

## The structure

The vault holds one pooled dividend-program position. Invariantly:

```
prize pool = vault's staked balance − Σ fixed principal claims
```

* **Principal is preserved in NET terms only.** A participant's claim is a
  fixed NET quantity; absent a win it neither grows nor shrinks, and exit
  returns exactly the claim. The **USD value of that principal fluctuates
  with the market price of NET** — the Program preserves the share count,
  not the dollar figure. No "no-loss," "risk-free," or "guaranteed" framing
  appears anywhere in the Program, because none would be true.
* **A won prize is credited as an increase to the winner's principal
  claim** — auto-enrolled, compounding, withdrawable like any principal
  (subject to the one-draw entry commitment below, which restarts for the
  prize tranche).
* The vault holds **no permission on any fund contract**. It buys, stakes,
  unstakes, and sells as an ordinary shareholder; it cannot touch the
  Treasury, the dividend engine, or the fee mechanism. There are no owner
  functions on funds.

## The prize pool — dividends only, and honestly variable

The pool is funded **exclusively by the vault's own dividend accrual**. The
Treasury, the fund's reserves (RFV), and protocol-owned liquidity are never
a prize counterparty: no code path lets any of them fund, top up, or
backstop a prize. If the fund's team ever sponsors a promotion, it does so
with its own funds through the same public deposit path as everyone else.

Because the pool is dividend yield, it inherits the dividend program's
honesty. The dividend rate is a formula of the share's premium to NAV —
**when the share trades at or below NAV, the rate is zero and the prize
pool can be zero.** The Program discloses this rather than smoothing it:

* **Minimum pool.** A draw whose prize (after the burn, below) would be
  under **50 USDG-equivalent** at the NAV floor **rolls over** into the
  next draw instead of paying a dust prize.
* **No yield promises.** The Program quotes no rate of return of any kind.
  Emissions are variable, formula-driven, and can be zero for extended
  periods; the application shows the actual pool, however small.

**The jackpot burn.** At payout, **5% of the pool is unstaked and burned**
— permanently removed from NET supply — and the winner receives the
remainder. A burn was chosen over a treasury payment deliberately: reserves
of the fund's own share are inert until sold, whereas a burn shrinks supply
against unchanged reserves and mechanically raises NAV per share for every
holder, participants included. The minimum-pool test applies to the
post-burn prize; rolled-over pools are burned once, at final payout.

## Entry and exit — through the taxed pair, always

Entry converts a participant's USDG to NET **on the fund's canonical
exchange pool, paying the full 5% trading fee**, and enrolls the proceeds.
Exit to USDG sells back through the same pool and pays the fee again.
**Approximately 5% each way, plus price impact, disclosed before
confirmation.**

No Program address is ever exempted from the trading fee — the fee mapping
is add-only and the deployment suite asserts that no Program contract
appears on it. The Program answers the entry fee's sting with *weight* (the
fee credit-back below), never with an exemption, because an exempt consumer
router would be a public fee bypass. Direct NET deposits are also
supported (no buy leg, no fee — and no fee credit).

**Network fees are sponsored.** Robinhood Chain charges ETH for gas, but a
participant who signs up with an email address or passkey never has to hold
any. The application pays those fees on the participant's behalf, so an
account funded only with USDG can enter, exit, and claim. A participant who
connects their own external wallet instead pays their own network fees in
the ordinary way. Sponsorship covers network fees only and changes nothing
about the 5% trading fee described above.

**Entry commitment.** Each deposit is committed through its first draw:
exiting a deposit reverts until one full draw period (three epochs,
roughly 24 hours) has passed since it landed. Every entry therefore plays
at least one draw, and exiting-and-re-entering around draws confers no
advantage. Beyond that single period and any opted-in locks, principal is
fully liquid.

## Draw Balance — real weight plus bonus weight

A participant's selection weight is:

```
Draw Balance = principal (real weight) + active Bonus Draw Balance
```

**Bonus Draw Balance is weight, not money.** It affects odds only. No code
path converts it to NET, staked NET, USDG, or any claim on the vault; it
is never withdrawable; and it is **inert without a real deposit** — an
account with zero principal has zero total weight and is never selected,
no matter its bonus balance. Bonus credits are denominated in NET units at
grant time and **expire after 14 draws**. The worst case of a compromised
bonus-granting key is skewed odds for one draw, bounded by an on-chain
per-draw grant budget (5% of vault principal); never a loss of participant
funds.

All bonus grants follow **published, formulaic schedules** — there are no
discretionary per-user awards, ever:

| Grant | Published formula |
|---|---|
| Welcome credit | $5-equivalent at signup ($10 for referred signups); one per account; **inert until first deposit** |
| Fee credit-back | Bonus equal to the 5% entry fee actually paid on the first deposit |
| Welcome match | 5% of the first deposit |
| Check-in | $1-equivalent per draw period the application is opened |
| Streak | +1% of real weight per consecutive night entered, uncapped; reset only by a full exit |
| Referral drip | 3% of the referred account's real weight, per draw, **only while the referred account holds an eligible deposit** |
| Lock boost | Commit principal 7 draws → real weight counts at 1.5×; 30 draws → 2× |
| Sponsored competitions | Time-boxed events (e.g. referral leaderboards) with dates, ranking metric, and prize schedule **published in advance**; prizes paid in Bonus Draw Balance; granted mechanically within the per-draw budget |

All schedules above are defined in the deployed contracts. The check-in,
streak, and referral drip grants are operating. The welcome credit and
welcome match are defined on-chain but granting has not yet begun; this
sentence will be removed when it has.

Early unlock of a lock commitment is always permitted — principal is never
trapped — but forfeits the boost for the current draw, cancels accrued
streak credits, and pays 1% of the unlocked principal **into the prize
pool**, enriching the other participants rather than the operator.

## Winner selection: public randomness, zero discretion

Selection runs over an on-chain weighted registry (a sortition sum tree):
given a random seed, the winner is a pure function of (on-chain weights,
seed) that anyone can recompute. The seed is **not produced by the
operator**. It comes from [drand](https://drand.love), the public
distributed randomness beacon, on its quicknet chain:

1. Each draw's entry cutoff names a drand round **in advance**, by
   arithmetic anyone can repeat: the round is the first one drand publishes
   after the cutoff. Nobody, including the operator, can know that round's
   value beforehand, because a threshold of independent drand nodes must
   jointly sign it and it does not exist until they do.
2. After the cutoff, anyone relays that round's signature to the contract.
   The contract verifies it against drand's group public key using the
   chain's BLS12-381 pairing precompile and rejects anything the drand
   network did not sign. The seed is the hash of the signature itself.
3. The draw is then **permissionless**: anyone may execute it, and it pays
   the winner the weights and seed determine.
4. If no beacon is relayed before the reveal deadline, the draw is skipped
   and **the pool rolls over intact**. There is no fallback seed. A
   future-blockhash fallback was considered and rejected because, on a
   chain with a known sequencer, it would trade a visible, money-neutral
   failure for an invisible bias vector.

**Every result is independently auditable.** The published winner rests on
one number the fund does not control and cannot forge. To check any draw,
fetch its round from any public drand node, hash the signature, and confirm
it equals the seed the contract recorded. Then recompute the winner from
the on-chain weights.

**The disclosed trust limitation, stated plainly:** the operator cannot
choose or influence a winner, and cannot move participant funds. What a
relayer still chooses is **whether a draw runs at all**. Because the drand
round is public once published, a relayer could compute the outcome first
and then decline to relay it. What bounds that is visibility and
money-neutrality: a withheld beacon is an observable public act, it moves
no money, the pool rolls over undiminished, and repeated rollovers are
self-evident misbehavior. Relaying is permissionless, so any participant
can settle a draw the operator declines to settle, within the reveal
window.

**Consolation tier.** From the same revealed seed, five additional
selections (excluding the jackpot winner) each receive **$25-equivalent of
Bonus Draw Balance** — weight for future draws, costing the prize pool
nothing.

## Official Rules

The following records the counsel-resolved terms under which the Program
operates. This page is the controlling long-form description of the
mechanics.

1. **Operator.** NetNet Capital Management. The Program is a promotional
   sweepstakes attached to a pooled staking arrangement; principal is
   never wagered and remains the participant's property in NET terms.
2. **Eligibility.** Participants must be **18 years of age or older**.
   There are **no geographic restrictions** (resolved by counsel).
3. **Entry.** Participation requires a real deposit into the vault.
   **There is no free means of entry**: bonus credits of any kind are
   weight multipliers for depositors, not entries, and an account without
   a deposit is never in a draw. Welcome credits granted at signup are
   inert until the first deposit.
4. **Draw mechanics.** Draws occur nightly (every three dividend epochs)
   with an entry cutoff of 7:00 pm Pacific time, seeded by the public
   drand beacon described above. Draws with a post-burn prize under $50-equivalent, and draws
   whose beacon is not relayed by the deadline, roll the pool into the
   next draw.
5. **Prizes.** One winner per draw receives the entire prize pool less the
   5% burn, credited as staked principal. Five consolation selections
   receive $25-equivalent of Bonus Draw Balance each. Prizes are variable,
   depend on the fund's formula-driven dividend rate, and may be zero.
6. **Odds.** Odds are proportional to Draw Balance and vary with total
   participation. The application displays each participant's live odds.
7. **Bonus schedules.** All bonus and boost formulas are the published
   schedules in the table above (welcome $5/$10, fee credit-back, 5%
   match, $1 check-in, +1%/night streak, 3% referral drip, 1.5×/2× locks,
   pre-published sponsored competitions). No discretionary awards exist.
8. **Amendments.** Draw cadence and economic parameters are fixed per
   deployment; changes require a successor vault and voluntary migration,
   not an in-place edit.

## Risk factors

* **Market risk.** Principal is preserved as a NET quantity only; its USD
  value rises and falls with the share price and can lose value.
* **Fee cost.** Entry and exit-to-USDG each pay the full 5% trading fee
  plus price impact. A round trip costs roughly 10% before any prize.
* **Variable prizes.** The pool is dividend yield under the fund's
  emissions formula; it can be small or zero for extended periods. No
  return of any kind is promised.
* **Relay liveness.** A draw requires someone to relay the beacon and
  execute it. Both steps are permissionless, so any participant can settle
  a draw the operator declines to settle, but an unrelayed draw rolls over
  rather than pays. Nobody can select winners or move participant funds.
* **Bonus credits have no monetary value.** Bonus Draw Balance is weight
  only, expires after 14 draws, and is never redeemable.
* **Smart-contract risk.** The vault, weighted registry, and bonus ledger
  are new contracts, in addition to the fund contracts they compose with.

Full fund mechanics are in [The Fund (Mechanism)](/mechanism); the fee
schedule is in [Trading Fee Schedule](/FEES.HTM); reserve and NAV
accounting is in [Treasury & NAV](/treasury). Nothing here is investment
advice.