It’s been over two weeks since new POOL distribution rates went into effect (May 25th). As such, I think now is a good time to evaluate their impact. I’ll look at their impact across our key metrics (Total Deposits, *Total Prizes, Unique Depositors).
Stats
USDC:
POOL distribution to the USDC prize pool was decreased by 39%. Since then, total USDC deposits have INCREASED by 35% and unique depositors have increased by 15%
DAI:
POOL distribution to the Dai prize pool decreased by 70%. Since then, total Dai deposits decreased by 22% and unique depositors increased by 1.8%
COMP:
POOL distribution to COMP was cut by 80%. Since then, deposited COMP increased by 1.7%. Unique depositors increased by 8.1%
UNI:
POOL distribution to UNI was reduced by 80%. Since then, deposited UNI (units, not USD value) has decreased 10% and unique depositors has increased 1.7%
*I’m not addressing reserve growth or prizes generated since in this case those are only impacted by changes in the underlying yield source.
Thoughts:
Overall, I’m very pleased with the impact of these changes. We are distributing far less POOL while getting more deposited value than previously.
I’m quite surprised that we did not see much larger drops in deposits and in hindsight it seems to be clear that we were allocating too much POOL to liquidity incentives. The prize pool that saw the largest draw down in deposits was Dai but even the 22% draw down is far less than the 70% reduction in POOL distribution. A few other things I think are notable:
My biggest surprise is that yearn has continued to aggressively yield farm the protocol. I expected them to significantly draw down their deposits. These reinforces to me that we need to focus POOL distribution on “sponsorship” and not on “deposits” in order to get larger prizes to relatively smaller depositors.
I am very surprised that the non-stablecoin pools (UNI and COMP) kept such a high deposit value with 80% reward reductions. It seems doing a small POOL distribution to some of these non-stablecoin, low yielding assets can be a good way to bring more people to the protocol.
I’m encouraged that across the board, the number of unique depositors continues to increase despite there being some reduction in deposited value.
Hopefully these insights can help inform the next round of optimizations for POOL distribution. Would love thoughts or analysis from others!
I am also very happy with the outcome of the reduction.
I find the POOL distribution to sponsorship idea interesting but I don’t think it’s the way to go personally. I feel like we are actually on a really good track right now in this mini bear market and making drastic changes could result in a huge setback.
If you are dripping 100% to sponsorship you are separating your gamblers and your investors and I enjoy being part of both.
If you are doing some kind of 80/20 split then it’s going to result in a pretty long explanation to new users. Fun and simple is a better approach.
I do feel like big prizes to small depositors is an important missing piece but would rather find another way. A portion of our 50% reserve could be used in fair draws. We could issue an ERC-20 token that is a one time use ticket for a fair draw and run these draws fairly often. PtJulydraw one token to every POOL pool depositor or to every Pooltogether depositor. Something along those lines.
Edit: One other thing I want to add in is that a further reduction on the USDC and DAI pool would be good at the end of these 10 weeks. Sushi pool looks awesome and should immediately become a governance pool after 30 days with 50-100 POOL drip daily.
Great write up. thanks for the info. the outcome of the change has been stellar. I am very much in favor of moving the drip to sponsorship. lets see some small fish win by standing on the shoulders of whales!
The reduction in Pool distribution has been a very successful move. There are many positive expectations regarding the growth of the protocol, so despite receiving less POOL it is still attractive to participate in Pooltogether. I think we should keep the focus on the usefulness of POOL both in farming and in providing liquidity. This will increase the value of our Token progressively, it will allow us to further reduce the distribution and keep the interest constant and growing.
I have been participating in POOLs from last 4 months and I very much like the new concept of no loss prizes.
I will support the 100% pool drip to sponsorship and want the small investors to have a fair chance to win a prize. With the current way, whales are always winning the game and dumping POOL. No incentive for small investors to try out a prize pool and hold POOL tokens. Also another thought is to create some kind of unique prize from 5% monthly reserve income to one wallet who is holding POOL tokens. Considering each wallet holding at least 10 pool will get a ticket to the grand monthly prize. Long term POOL holders get multiple tickets based on their holding period. This way we build a great community of long term investors. This will avoid opening multiple wallets just for the sake of the prize. just my 2 cents to the community.
Thanks for setting up the poll. Voted for “keep as is” just to give it some time and avoid hasty moves. The reduction was a big success but there may have been other factors that were even strong than the lower incentivisation, for instance a drop in overall market and hence search for reasonable use of stable coins which pooltogether can provide. The DuneAnalytics Dashboard is a great resource for measurement of our decisions, really love it.
