# Prize Draw Program (WinNET) > **Status: the Program is not yet operating.** This section describes a > forthcoming program whose specification is complete but whose contracts > are not deployed. No draws have been held, no prize pool exists, and no > participants are enrolled. Every dollar figure on this page is a design > parameter from the program specification, not a quote from a live pool. > Nothing here is live until the fund announces otherwise. The Prize Draw Program — consumer brand **WinNET**, to be 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 will hold 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 will show 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). **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 | 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 — commit-reveal, 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 comes from a **keeper commit-reveal** scheme: 1. Before the draw's entry cutoff, the operator posts a commitment (the hash of a secret) on-chain. The weight set is not final until the cutoff, so the operator cannot aim the secret at a chosen winner without also controlling every subsequent deposit by every other participant. 2. After the cutoff, the operator reveals the secret; the seed is the hash of the secret together with the cutoff block's hash, and the draw becomes **permissionless** — anyone may execute it. 3. If the operator fails to reveal by the 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. **The disclosed trust limitation, stated plainly:** commit-reveal means participants trust that the operator will not *selectively abort* a draw after computing who would win. What bounds that trust is visibility and money-neutrality — a withheld reveal is an observable public act, it moves no money, the pool rolls over undiminished, and repeated rollovers are self-evident misbehavior. The operator can delay a prize; the operator **can never choose a winner and can never move participant funds**. Verifiable-randomness services (a drand-beacon relay, or VRF if it reaches this chain) are documented upgrade paths. **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 (skeleton) The following skeleton records the counsel-resolved terms; the executed Official Rules will be published before the Program operates. 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) at a fixed local time, per the commit-reveal procedure above. Draws with a post-burn prize under $50-equivalent, and draws whose seed is not revealed 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 will display 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. * **Operator liveness.** A draw requires the operator's reveal; an unrevealed draw rolls over rather than pays. The operator cannot select winners or move funds, but can delay distributions. * **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, and nothing here is live.