2022 Review of Treasury Inflows/Outflows

[BRONDER]

Introduction

Why?

As the PoolTogether community is expanding and attracting more contributors, a detailed view of incomes and expenses is required to determine the runway of the Treasury and be able to plan accordingly.

What?

This post will go over the 2022 Treasury inflows and outflows of the Treasury. By looking at the movement of funds from the Treasury, we are able to estimate the runway in different scenarios (optimistic VS realistic VS negative).

All the data presented in the following post can be viewed in this presentation .

The calculations performed to get the numbers shown can also be reviewed in this sheet .

Special thanks to my friends @underthesea and @Lonser for collaborating with these reports.

Summary

Although in 2022 we have experienced a bear market, it has been almost 2 years since the POOL token was first created. Since then, the token has fulfilled its purpose of supporting growth and decentralizing the PoolTogether protocol with over 8,000 different holders (only taking into account Ethereum blockchain).

Treasury

Currently the PoolTogether Treasury holds around $5.2 million in which 57.7% is composed of stablecoins and 36.4% is POOL (the protocol’s native token). The Protocol Owned Liquidity program holds 3.3% of the total value in the form of POOL + ETH, while 0.7% is held in ETH.

Other assets amount to around 1.8%, mostly in OP and stMATIC.

The wallets analyzed in order to show the Treasury assets are the following:

• Governance Timelock: 0x42cd8312d2bce04277dd5161832460e95b24262e
• Vested POOL: 0x21950e281bde1714ffd1062ed17c56d4d8de2359
• Executive Team Ethereum: 0xDa63D70332139E6A8eCA7513f4b6E2E0Dc93b693
• Executive Team Optimism: 0x8d352083f7094dc51cd7da8c5c0985ad6e149629
• Executive Team Polygon: 0x3fee50d2888f2f7106fcdc0120295eba3ae59245

Inflows / Outflows

At the beginning of the year the treasury held 4.6 million POOL, while at the end of the year it held 4.4 million. It is important to note that approximately 562K POOL was returned to the treasury due to the expiration of the Ondo Finance program for POL and the return of POOL that had previously been designated to new user education. In addition Grants and Bounties returned POOL in the fourth quarter.

At the beginning of the year the treasury held 4.3 million USDC, while at the end of the year it held 2.5 million. It is important to note that approximately 200K USDC was returned to the treasury by the Protocol and Grants Teams.

The main expense (around 1.185 million USDC) came from subsidy in the form of prizes for PoolTogether depositors with the objective to bootstrap liquidity for the newly deployed V4 version. However, the amount of subsidy has been significantly reduced over the last months of the year.

Another key expense (around 1 million USDC) has been the operations of the different teams that support the protocol and the Grants dedicated to support the PoolTogether ecosystem. Note that these expenses also include the funding for the first quarter of 2023.

Treasury Runway

[ageless]

Is there spending estimates published anywhere for this year 2023. I don’t really like basing the runway on the price of POOL. Taking into account worse case scenarios the liquidity may not be there when you need to sell it. It’s also somewhat self fulfilling, the market knows the treasury is broke and loses confidence so there is nobody that wants to buy, the token value could effectively be zero… so I’d much prefer to see runway estimates based on USD holdings or at least give these as well?

I do think given how high expenses were in 2022 there should be some plan for selling POOL at specific price levels or (private buyers like before) to bulk up the USD holdings in the treasury as oppose to waiting for the USD to dry up and then look to sell the POOL at any price available. I don’t think it’s urgent but something to start thinking about. In the start up world normally companies would be looking to raise more funds while their runway is drying up in series A / B rounds, I guess we need to think about what is a DAO equivalent strategy of that.

[BRONDER]

There are no spending estimates for year 2023. A wild guess could be made according to the budgets approved for Q1 2023, but it wouldn’t be anything more than a guess.

I agree with your thought that counting on POOL for treasury runway brings quiet a lot of uncertainty. You can check the following post for some estimates of runway according to the real expenses of Q4 2022: Team Budget Request Analysis Q1-2023.

Specifically, I’m referring to this image (4.2 years of stablecoin runway):

Regarding the possibility of selling POOL to the market or private sellers, that could be discussed in its own separate post. I’m pretty sure it would be an interesting conversation, even more given the fact that I believe that PT Inc. wants to use all treasury funds instead of getting more. Personally, I think we’re currently at a decent position in terms of runway and selling POOL is not needed yet.