Yotta claimed to be functionally equivalent to having a normal interest-bearing account with an excellent interest rate, and using a small portion of the interest to buy some lottery tickets. Buying lottery tickets might be dumb, perhaps even shameful (although I disagree as long as it’s not to excess), but it by no means implies that you deserve to lose your savings.

For what it's worth, some countries also offer "lottery bonds": https://en.wikipedia.org/wiki/Lottery_bond

In the UK, those are Premium Bonds backed by HM Government. The day that they can't be redeemed is the day you have significantly bigger problems.

Yotta’s funds were backed by the US government. The trouble is that the link between Yotta’s funds and Yotta’s customers’ funds was somewhat more tenuous than they implied.

Is a space bank lottery really worse than t-bills?

Like is the average utility gained from a depositor from their $1000 turning into $1001 for 1000 depositors greater than the utility gained from a single depositor turning $1000 into $2000 while the other 999 depositors utility remains flat?