Launching on Avalanche

Background

PoolTogether Inc. has been working on Avalanche compatibility for the last couple of weeks. We are now very close to being ready to extend the PT prize pool network to Avalanche. PT Inc. has covered development costs for the code. The new code is currently being audited by PoolTogether Protocol’s auditing partner C4.

Now that the work is nearly complete, the PoolTogether Protocol needs to make a decision as to whether to accept the new code and extend itself to Avalanche and operate prize pools on that chain.

Originally, Avalanche had agreed to incentivize the deployment so we knew it would be a win-win for both the protocol and Avalanche. However, Avalanche has pulled incentives for launch so the decision is more nuanced now.

Presented below are some of the important points regarding:

  • Operational overhead in terms of human coordination
  • Costs

Operational Overhead

While much of the prize pool network has been automated, there are still key responsibilities that the protocol will need to take on. In particular:

  • The Executive Team needs to manage prize liquidity
  • The Ethereum Operations Team needs to manage the Prize Pool automation

Migrating Prize Liquidity

The PT Protocol’s executive team currently handles prize liquidity distribution. This includes:

  1. Creating gov proposals to transfer USDC from governance to the exec team Safe.
  2. Moving USDC across chains using the bridges to corresponding exec team Safes on the other side.
  3. Depositing tickets into Prize Distributor contracts on each chain, so that they have sufficient liquidity to satisfy prize claims.

The Gnosis Safe does not currently exist on Avalanche, but we can use the legacy Gnosis Multisig. The multisig is open source and a version is hosted by Pangolin Exchange. The multisig does not have Wallet Connect support, so the exec team will have to hand-craft transactions in order to bridge funds back from Avalanche.

Managing Automation

Once we deploy another prize pool to Avalanche, we will need to update it alongside Polygon. Each day we’ll need to push the Draw information to the chain, so that prizes can be claimed.

The Ethereum Ops Team will need to create a Gnosis Multisig on Avalanche to custody funds, and top-up a Defender Relayer to execute transactions on the Avalanche network. The budget for the Ops Team will need to increase by several hundred dollars per week at least.

Costs

  • One-time launch Costs:
    • Contract Deployment: ~$20 (~8m gas total, when gas cost is about ~$1 / 500k gas)
    • Prize Liquidity: $250k USDC up-front to stock the prize distributor
  • Operational costs:
    • Total cost of prizes will remain the same, but liquidity will shift to AVAX as it grows.
    • A few dollars per day to broadcast the draw to the prize pool + Eth bridging fees from time-to-time.

PoolTogether Inc Team Recommendation

The PT Inc team has met and discussed the above and shared our opinions. We’ve also reviewed a productive Governance Thread on the matter.

We’ve come to a consensus and our recommendation is to launch on Avalanche on December 20th for these reasons:

  • The biggest operational cost is human coordination. The exec team and ops team will have more on their plates, but this needs to improve no matter what chain we deploy to next. We need to do this anyway.
  • Avalanche is a very different ecosystem, and could present a brand new market for us.
  • Operational expenses are minimal, although they will require the Eth ops team to move funds over.
  • If we deploy to Avalanche we should commit fully and move over $250k USDC like the other chains. This will require a full week for the governance proposal to pass.

Community Vote

We’d like to put our recommendation up for a vote to see if the community wishes to proceed.

  • Yes! Let’s deploy as recommended.
  • No! And I’ll explain why

0 voters

4 Likes

Sounds like a small cost for a large gain to me.

LFG!!!

7 Likes

The costs seem low and people on Discord are really up to get stuff done at the moment. Let’s grow!

4 Likes

Thanks for giving us the insight of your perspective as well as breaking down the logistics. I am glad to see there is momentum to stick to plan and expand to Avalanche.

2 Likes

I was initially suggesting to delay the launch of Avalanch network. However given that the code is already done and being audited, if there are no major issues in the audit I will definitely go for it!

2 Likes

Seems like a shame to delay what is essentially completed work just because of holiday timing and AVAX rug pull. Im sure the Exec ops team can pull off everything necessary in a timely manner.

Lets do this.

3 Likes

Thanks Brendan, yeah my only concern was how much work was still to be done on PTs side and if it was worth getting it done without incentives. Recommending it go through is a good and valued confirmation for me. Hopefully this begins a “snowball” effect of PTs success

…heheh

5 Likes

I appreciate all of the hard work over the last couple of weeks, and I agree that it is a little step now for a large immediate gain.

However, many great projects have had much longer efforts put into them and abandoned for the sake and better long term vision of the project.

Is the long term expense and management of another chain really worth it - especially one that is not interested in helping promote their own chain (Avalanche)? Is Avalanche really getting more traction than investing more effort into chains that PoolTogether has already significantly invested into (i.e. Polygon)?

To quote @Leighton from Discord - Reference: Discord

“Option 2: Pause the launch and focus and refocus on POOL tokenomics, improving the V4 app, and accelerating growth on Polygon. Avalanche launch can still be done later since but there is no incentive to do it on a fast timeline.”

I think this is a difficult but extremely strong leadership stance. I agree with Option 2 referenced above and is the only reason I’m providing a dissenting opinion.

Sometimes it is better as a strategic decision to say ‘no’ and “ghost” the people (Avalanche) that “ghost” you (PoolTogether). :ghost:

1 Like

By turning your back on Avalanche you turn your back on 1B of TAM in regards to potential USDC that PoolTogether can get its hands on. (If i read their obtuse block explorer right)

2 Likes

Yes, but the question is, why would people use PoolTogether over other sponsored (and thus better earning) protocols on the Avalance chain?

I don’t think we lose out on launching there, but if our APR is significantly worse than other protocols (I’m not sure), we also will not attract the big bucks.

This launch could also be a useful learning exercise for future launches on the other promising L2s. “What did work? What didn’t work?”
Should also give some valuable insights for the now forming Marketing WG.

PoolTogether already has a strong reputation within the DeFi community. If Avalanche can’t provide any financial incentives - we probably still could figure out some kind of social or status incentives we can provide instead, without spending too much money.

3 Likes

PoolTogether is out-APR’d on every chain we already support. Smart investors diversify to reduce risk. Also, PT isn’t so much an investment strategy as it is a savings strategy. Investors need to keep liquid capital around in a stable currency for when the next opportunity presents itself. Why not store it in PT where it might earn them significant rewards?

2 Likes

My only commentary is that it’s probably going to be a little silly/difficult to organize everyone between launch date and the new year.

I appreciate this alternate viewport Chris! I think you would have a strong case if we were deciding whether to go from 1 chain to 2. However, our plan has always been to deploy across many chains. Going from, for example, 4 chains to 5 chains isn’t a big change compared to 1 to 2 chains.

And, if growth falters and the chain is not economically feasible the protocol can always decide to shut it down. I don’t think that decision should be taken lightly but it is an option if adoption on Avalanche is abysmal.

1 Like

Why was USDC.e choosen over the native token USDC at Avalanche? AAVE supply APR is really poor for USDC.e while fairly high for USDC. It doesn’t make sense to me. Should it continue to be this way or will it be migrated to USDC at a later date?

When we launched on Avalanche, USDC.e was the main flavour of USDC on Avalanche. The official USDC has only just launched (or was launching soon IIRC), so it didn’t have any liquidity.

It’s possible for us to launch a USDC prize pool, but we wouldn’t be able to migrate user funds. PT is non-custodial so only users can move their funds.