PoolTogether raises 471 ETH with NFTs to fund legal defense

So-called “no-loss lottery” decentralized finance (DeFi) platform PoolTogether has raised 470.90 Ether (ETH) via nonfungible token (NFT) sales to fund its legal defense against a putative class action lawsuit.

That means PoolTogether is more than halfway to its goal to raise at least 769 ETH, worth roughly $1.5 million at the time of writing, to fight what it calls a lawsuit that has “no merit.” The platform has another 21 days to go before the NFT funding campaign ends. It noted on its NFT minting page that:

“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.”

The class-action lawsuit is led by the former technology lead for Senator Elizabeth Warren’s 2020 presidential campaign, Joseph Kent. After depositing roughly $12 worth of stablecoins into the protocol, Ken took action against the project, its founder Leighton Cusack and several of its affiliated partners in January.

According to an amended complaint from February, Kent alleges that PoolTogether is operating an illegal lottery in New York and argues that the platform “may never offer a positive expected value” due to keeping as much as 50% of each weekly prize as a reserve.

Kent is seeking compensation worth double the value of funds he spent on purchasing lottery tickets in PoolTogether, and double the reasonable amount of attorney’s fees and costs of legal action.

PoolTogether claims to offer risk-free lotteries on stablecoin deposits in the platform by using ticket-buyers’ and liquidity providers’ capital to generate interest using DeFi lending protocols.

The winner of the lottery receives the lion’s share of the yield, while a handful of runner-ups receive a smaller share. All other participants receive a full refund. According to PoolTogether’s website, it currently offers $80,436 worth of weekly prizes across its v3 and…