August USDC and DAI deposits

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“Can someone explain to me why I paid 50 bucks for transfering 92 Dai from MetaMask to PoolTogether??”

“I’ve seen others complaining about pooltogether fees on twitter etc, makes you wonder how much of the pool money is just there because it costs more than your investment to withdraw it, good con, few dollars to invest, but can never get it back, ultimately this is no better than a rugpull”

These are quotes from the discord this week. As I see it there are a few ways we can respond. We can ignore them as outliers or trolls, attribute it to ignorance, blame the jpeg mania and Ethereum gas, or we can look at ways to improve our user experience. I am interested in the ladder, and these comments led to my diving down the rabbithole of deposit transactions for the USDC and DAI pools for the first 4 weeks of August.

Observations

  • 494 deposits, 442 unique addresses, 27 million deposited

  • Half of the deposits this month to the mainnet USDC and DAI pools are less than $500. The total value of those deposits is about $40k

  • The average cost of a roundtrip ticket through the Pool Together mainnet USDC funzone is $150 in gas

  • While gas is up a bit this month (60 gwei average) compared to the previous two months, it has actually been lower than the annual average (100 gwei)

All of the data is sourced from Etherscan and presented below with a link to the spreadsheets including all of the transaction hashes if you really want to get into it. Am I missing something? I did remove pod interactions. In some ways I hope I got the data way wrong or totally overlooked something, so please correct me if so.

Opinion

If you dig-in there are many deposits where the deposit gas exceeds the deposit amount, and tracing it further you will find users claiming .005 POOL for $18 in gas. I see these transaction types as a big net negative for Pool Together. These depositors represent a very small amount of the total deposits adding to prize generation but represents a significant number of users. More importantly I have to think a lot of these users are not going to enjoy the pool, despite our best efforts to accommodate all shapes and sizes. While PT Inc has lots of exciting things coming to address these issues with V4, I do not think the problem rests completely on their shoulders to fix. From my perspective awareness and education are crucial, and I hope this data help us all better understand what is going on with the users who are interacting with the protocol. For me I know it has.

Solutions?

The easiest immediate solution I can think of is to implement a confirmation in the app for first time depositors under $500. A popup that requires the user to type something like “YOLO” before submitting a transaction. To make it a little more technical the app could get the current gas price and calculate a deposit threshold based on current gas prices that is used to conditionally display a disclaimer. But as we all know 10 gwei at deposit can very well be 200 gwei on withdraw. If it were up to me, I’d even take it further and not allow mainnet deposits on the flagship app in amounts under $50, possibly even higher. I can’t imagine a good reason for a depositor to be sending those transactions unless they are scheming to farm airdrops. If someone really wants to deposit less than $50 they could do so manually through etherscan. With a clear YOLO warning implemented, and possibly even a full-on barrier, there could be a simple and clean redirection to get the users to Polygon. The problem is this all relies on PT Inc to implement, so what can we do?

One thing that I think goes a long way is simply telling anyone who is thinking about depositing they should not do so on mainnet if they have less than a certain amount. If it’s a friend, or a discord chat or wherever you shill Pool Together. Then provide them with resources on how to get to Polygon and/or even holding their hand through the process. I have done this countless times, and my threshold is actually $5k. In my mind under $5k on mainnet does not make sense. The opportunity to learn on a network like Polygon where fees are practically free is night and day. It’s not only Pool Together that gets a bad rap from a user trying out Pool Together with $100 on mainnet. It’s the whole ecosystem.

What else can we do?

Outlook

I hope that if we revisit the pools at the end of September we will not find as many transactions where the gas cost exceeds the deposit amount. I hope we can all see why Polygon is a step in the right direction (vote on the current PTIP bundle) and find many ways to let users know it’s a good option. For the many addresses that are “trapped” in V3 currently with a sub $100 value deposit, I think it could be responsible to consider some airdrop of Polygon tickets or other retribution. While it’s easy to see this as a macro Ethereum issue, or to wait for PT Inc to solve all of our problems with a new build, I think we all need to step up and do everything we can to improve user experience. I hope this data helps us to understand where we can start.

usdc

dai

gas

Google Sheets document has three pages, check the bottom of the screen to navigate

A somewhat related plug

I have put together a tutorial on how to use polygonscan to manually interract with the prize pools. This tutorial is the exact same procedure if you ever wanted to familiarize yourself more with etherscan. Thanks to @mkkoll and @regisisland for the inspiration. If anyone wants to try it out please contact me on discord. If you do not have Polygon setup I am happy to send you a few tokens to try it with.

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The next big growth of Pooltogether is reliant on our ability to move to layer 2 solutions. After experiencing Avax, Polygon , and most recently Celo I am very excited to try and grow these markets where average users can actually afford to transact. We should begin to transfer/expand drips into Polygon and beyond.

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@underthesea Thank you for this write-up! I 100% agree that we can do more to funnel users correctly. Users who aren’t depositing very much should be using the Polygon, Binance or Celo pools. Ethereum is unusable for small fish.

Many of our users rely on us to recommend the right path. but our user interface assumes a certain level of understanding. We tell ourselves “They know that Polygon is cheap, so they should deposit in Polygon if the gas is too high!”. But, there are likely many users who come onto the site, see the gas price for the main pools, and take the pain of depositing or just bounce.

We could funnel the users much better than we do, and combine that with the education you are talking about. Make sure people know that Polygon + BSC + Celo are much cheaper to use.

Once we have V4 and they all have the same prize value then it’ll be a no-brainer.

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People depositing such small amounts which are essentially gas-locked is a problem indeed. As mentioned it indeed creates a net negative image for PoolTogether because users will complain about it (rightfully so) and those deposits are not even where the prinicpal part of our interest is gained.

I don’t like the idea of blocking people from depositing small amounts, that goes a bit too much against the individual freedom that crypto apps should offer. There are plenty of people playing in actual loss-loteries with small amounts just for the infinitesimal small chance of winning a big prize. I don’t think we should block people from doing that in PoolTogether. I don’t consider depositing through Etherscan or Hardhat, … offering those people a real option since 90% of them won’t have the knowledge on how to do that.

We should however show them that there are better options. What I would like to see is a more flexible interface. I noticed that, right now, when you try and deposit directly on the USDC or DAI pool (e.g. because you don’t know pods exist), it does not reference a pods option (or Polygon option). Ideally the interface would recognize that you are depositing small amounts and right there give you the extra option to deposit in a pod. If they still choose to deposit in the pool themselves, then that is their choice. We did everything we reasonably could to show them the better options.

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This is a great point. I’m active across quite a few different protocols, and the complaint about “fees” is uniform across DeFi on mainnet while gas prices are high. If the goal is to be a no-loss lottery, then it would be beneficial to have a place where users can learn the best place to deposit their money. Below, I’ll outline a couple of ideas:

PoolTogether: Learn on the Lazy River

I can’t imagine it would be difficult to create a separate website where educational content can be hosted. The protocol could use the existing Coordinape program to incentivise existing community members to create video tutorials about the prize pools on Polygon, Celo, BSC, etc., and there can be a write up on where you can deposit your money with average gas fees pulled in from APIs.

Having a “Recommend Pool for Deposits of $500 or less” and “Recommended Pool for Deposits of $500 or more” would be easy way to empower users. Within the Lazy River Learning Resource, PoolTogether could included tutorials on how to bridge assets onto other chains as well. The community can curate content and give new users the best way to interact with the protocol on a chain where they are less prone to losing money on gas fees.

Allowing Users to Take Existing cTokens to Deposit Directly on PoolTogether

I’m not sure if users can currently do this, but say I have $5k earning interest on Compound but I want to delegate my credit to PoolTogether for a chance to win a prize. I don’t think this is available, so users would have to withdraw from Compound and deposit into PoolTogether, which would create unnecessary gas costs for the end user.

Could we enable users to deposit cTokens directly into the protocol and receive Tickets in return? For example: $5k worth of cDAI → Deposit into PoolTogether → Receive $5k worth of ptDAI.

Giving users the ability to do this for any interest-bearing tokens for an underlying yield source would be another way to capture new users while reducing overall gas costs on any chain.

Overall, it’s a tough problem to solve for any protocol on Ethereum. I have confidence the PoolTogether community can overcome this hurdle :slightly_smiling_face:

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I’m afraid there’d be no prize to win if we did that as the prize is generated by depositing the DAI deposits onto compound and generating interest. :sweat_smile:

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Right but if a user transfers their cDAI, then they are giving the interest to PoolTogether for a chance to win a prize + POOL drip, so it’s actually a win for them. Could be a certain # of users who have used Compound but are not aware of PoolTogether. While it might not be a tidal wave of users captured, it could be a tributary flowing from Compound into PoolTogether, which doesn’t affect Compound and creates an added benefit for end users.

I’m not referring to a prize pool for cDAI holders, but a way for people to have DAI in Compound to just deposit cDAI to PoolTogether instead of having to withdraw from Compound and deposit into PoolTogether, which then results in their withdrawn DAI being put back into Compound. They give interest bearing tokens to PoolTogether, PoolTogether treats it as a regular DAI deposit without the need to deposit into Compound. Win-win-win.

If the goal is to establish PoolTogether as the best place to deposit your digital assets to gain yield, then allowing users to deposit interest bearing tokens that are then turned into regular ptDAI tickets, PoolTogether gets the interest, the user gets to save on some gas fees and earn POOL drip.

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I guess cDAI must not be an interest bearing token in the same way that bBadger is to Badger? That’s where my confusion comes from on how that would work. If you deposited bBadger to pooltogether and then withdrew the same amount of bBadger then you’ve captured all the interest. cDAI must be more of a receipt and the comp is paid separately?

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There are many new DeFi users who are interested in Pooltogether, and want to participate. Polygon and Celo are really cheap and accessible for small fish, you just have to guide them on the right path, which requires a series of steps.
Momentarily the video tutorials and personalized attention in Discor or Telegram are a good alternative, but we must think about how to make it more intuitive. In the meantime, making these channels more visible to new entrants can prevent them from leaving with a bad image of Pooltogether and getting into Pools.

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Seems like a case for an annoying banner, or prompt on the Ethereum deposit button “on-click” action giving a prompt on page.

Gas too high, head over to our Polygon Pools (link to how-to video for onboarding to polygon), Celo Pools (link to how-to onboarding to celo), BSC Pools (link to how-to for BSC).

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We can funnel the user nicely. Like e-commerce.

Imagine they put in how many tickets they want. We then show the cheapest places to buy them, and the associated benefits (diff rewards).

We can also add liquidity to a stable swap money market, and allow people to swap in with any token.

There is so much low hanging fruit to improve the purchase experience.

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