Ethereum (ETH) news: A blockchain lottery plans to use crypto gambling fees to fund Ethereum development

Ethereum core developers may soon get a new source of funding: a blockchain lottery.

Decentralized lottery protocol Megapot said Thursday it is teaming up with Protocol Guild, an independent funding collective for Ethereum protocol contributors, to introduce what they describe as the crypto industrys first programmable charity lottery.

Under the arrangement, users can buy tickets for a daily lottery through a dedicated Protocol Guild portal for a chance to win prizes from a pool exceeding $1.1 million. Megapot said 100% of referral fees generated from ticket sales will be automatically distributed by smart contracts to Ethereum developers supported by Protocol Guild.

The effort comes as concerns around sustainable funding for Ethereums core infrastructure have intensified. While the blockchain underpins billions of dollars in decentralized finance and crypto trading activity, many developers maintaining the network earn significantly less than peers in other parts of the industry, according to Megapot.

Protocol Guild said it has distributed roughly $38 million to Ethereum contributors since 2022 through donations and token pledge initiatives, but estimates that maintaining and scaling Ethereum could require between $30 million and $60 million annually.

“Every token, NFT, or perps trade depends on the tireless work of Ethereum core developers,” Megapot CEO Patrick Lung said in a statement shared with CoinDesk. “Now, players dont have to choose between speculation and contribution. They can do both.”

The model mirrors traditional charity lotteries such as the U.K. National Lottery, while moving the mechanism onchain. Megapot said its programmable referral system removes administrative overhead and ensures proceeds are distributed transparently.

“Getting consistent funding to Ethereum protocol stewards is a critical and growing challenge,” said Trent Van Epps, the main organizer at Protocol Guild and a former Ethereum Foundation member. “Were excited to see how this novel Megapot integration will raise the bar on how apps can support the infra they depend on.”