I just want to kick off this conversation after @Leighton 's blog post:
“It’s also possible for governance to incentivize more sponsorship by distribution POOL tokens to sponsorship depositors.”
Sponsorship funds contribute interest to the main pool but deposits in sponsorship are not entitled to receive tickets in return. This effectively makes it more appealing for users to deposit into the main pool since their odds are going to be very generous, even with a high reserve turned on. I would anticipate something like a 5:1 ratio of funds in the sponsorship contract versus the pool contract, maybe even higher.
I propose that we apply the POOL drip to only the sponsorship depositors for WBTC and USDT. I think something like 50 / day for WBTC and 200 / day on USDT for 3/6 months is what we will converge to over the coming months, but open to discussion on what number that should be too.
I have put in a chart so everyone can see how moving the drip reward to sponsorship completely can affect the APY of the main pool. This does not include the lootbox. This will make the expected value depositing into pooltogether for depositors 100’s of percent more appealing than depositing at the yield source. For example, if USDT is generating a 10% interest on compound or aave, at a 5:1 ratio your expected value would be 30% APY or 3x higher than at yield source.
I think this could be a cool experiment to try on a small number of pools.
USDT and WBTC sounds good to me.
One potential issue I see is that if we don’t like the idea and want to switch back to the non-sponsorship tokens earning POOL, any yield farmers will need to withdraw from sponsorship and deposit back into tickets, which could be expensive on gas.
Regarding the amount of POOL distributed, I think we should decide on a general rule for how the drips are allocated. One way would be to have a target amount of total distribution, split among all pools. A more detailed explanation is here:
Agree with all of the above. Think I read in the discord the core team want to deploy the reserve fix before reducing the rates on the main pools. As far as I’m aware, in order to create this proposal it would require the core team to help build the contracts out to set it up, similar to how the POOL pool was deployed?
I feel like this is the winning design. If you want to maximise the price treasury sells POOL for during the distribution doing it through sponsorship is the way to do it. If you want to make it more fair as the saying goes you remove the whales from the main prize pool. It has positive feedback effects on itself and will drive growth.
Investors like to see the treasury growing rapidly → drives investment into POOL token → Makes odds even better for participants in the main pool → drives growth of main pool → Creates a bigger reserve take each week → Investors like to see the treasury growing rapidly…
Since the reserve rates are about to change I want to bring attention back to this post.
I have edited the description with a chart to illustrate how this would boost the main pool APY for depositors. It’s a complete no brainer in my opinion that we should be making a plan to move the all the drips to sponsorship.