PoolTogether

[NEW POOL PROPOSAL] Adding a utility token to the Pooltogether ecosystem

Well what do you think people that have bought POOL on the market think about this? And now you are trying to say POOL can still be a revenue generating token. So Pools would be competing against each other for liquidity? I don’t get how that would work. If the main future revenue is going to come from another token the future value of POOL is seriously impaired.

Can you imagine if someone proposed something like this to UNI token holders? I really like POOL but if this passed the market would crater because I would be selling my stash at least. You aren’t even attempting to compensate current POOL investors with an airdrop of the new token in the design, it’s just not considerate at all to current POOL investors.

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I would be astonished if it went to a POOL vote and did not get defeated.

@0xSiam Just to make this clear, I have been working on this idea since long before the POOL token was even announced. If there was no POOL token, I would have proposed this pool anyway.

@ageless This comparison doesn’t seem fair to me. You’re holding this pool to different standards than the existing pools. They don’t generate direct profit for POOL holders either. They would generate profit if there was a fee going to POOL holders. And in that case, the Kokoon pools would be subject to that exact same fee. The prize strategy has no impact on this.
As I have indicated above, I am open to exploring the possibility of allocating part of the KKN supply to POOL governance.

They don’t generate profit atm but the expectation is that one day they will. Why do all pools have to have the same fees; is that a technical limitation for some reason? It’s not possible to have the fee on DAI pool one rate another rate on USDC and no rate on UNI? That seems kind of limiting if it is the same fee applied to all pools.

To piggyback on what other people are saying and also my comments. This is really two different proposals in one. One is a proposal to create a new prize pool that distributes 25% of its interest as a fixed return. The other is to issue a new token.

I think the first idea has a lot of support and the second idea does not. I’d like to see this revised into a proposal to POOL governance to create a prize pool using a custom prize strategy that delivers 25% of the accrued interest to depositors. There is no need for a new token to be included in that.

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This is my opinion. I’m the president of 2 companies and have been a crypto investor for several years. The Kokoon solution doesnt provide any solution to the original problem which is POOL token needs more utility. I’m not going to sugar coat this, Kokoon sounds like a blatant money grab and the main token of the Pool protocol should have utility.
IDEAS TO INCREASE UTILITY

  • Have POOL holders get better odds in pools.
  • POOL holders generate a small guaranteed amount of a Pool.
  • Team uses some of the earnings to burn POOL tokens creating deflation.
  • POOL has a liquidity revenue generating function for remaining tokens.
  • POOL holders make a commission % on all pool rewards. So all pool give a % of reward to a pool that only goes to Pool token holders as a lottery win.
  • Team doesn’t launch an innovative platform with almost zero utility for its main token. If you’re smart enough to build the platform then be smart enough to launch a token with value. This is borderline a scam.
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Hi @Nate, thank you for your feedback. I think it might have been unfortunate to bring our proposal in context with the need for utility. KKN is neither intended nor designed to replace POOL utility or capture the value that rightfully belongs to POOL holders: On the contrary, it presents itself as another opportunity to do so.

The moment any of your suggested monetization strategies come into place (I would vote for #5), the kokoon pools will by default be affected by the monetization, as the contract is built on top of the Pooltogether protocol. For instance, if you introduce 2% commission in PT, the kokoon pools will automatically start contributing their 2%.

While no existing pools are affected, the new kokoon pools represent a closed, fair sub-ecosystem enabled by the opt-in principle. Nobody is grabbing anything and running off.

I’m unsure what your last point refers to, but personally I feel that the Pooltogether inc. team did a great job creating this platform and I am very optimistic that it has loads of monetization potential. It is and was no secret that the POOL token has no utility yet.

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I am not sure where the notion of pools competing for liquidity comes from: Would you also claim that the DAI and the UNI pool are competing for liquidity and that this is a bad thing?

The main future revenue should (and will, once monetization is implemented) definitely come from the POOL token. The proposed concept only represents a way to offer a product where 25% of the interest is distributed among community members in a fair way (for people who chose to do so). Fair in the sense that people sticking with the protocol on the long term receive a slightly higher portion of those 25%.

That it is a brilliant marketing opportunity is just the cherry on the cake.

I have added a new section to the proposal:

Why we need a new token at all
There has been a lot of feedback that the same goals may be accomplishable without introducing a new token. I think the most important points are that it:

  1. rewards people that have been in the pool for a long time.
  2. enables liquidity mining, which as we have seen with POOL and many other projects massively boosts AuM and publicity.

The KKN token does not take away any monetization options from POOL holders. It exists as its own closed subsystem where users can opt-in to a different prize model.

I think there is a good comparison to be made between KKN and Uniswap LP tokens. LP tokens exist separately from the UNI token, and keep track of who is owed the trading fees generated by a particular trading pair. The KKN token would keep track of who is entitled to the 25% interest that is captured by the prize strategy.

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Explain like I’m 5, please.

As a POOL token holder, what would be the benefits for me of the creation of this KKN token?

and anything else I want to ask!
Where do I earn money as a pool token holder right now?

As a POOL token holder i’m moreless interested in a new token.
I’m pooling dai to hopefully win dai lottery…
I’m holding POOL to have a voice/vote on proposal…
I would be more interested if pool holder get weekly claimable from pool where they have deposits.
Ex: i’m POOL holder, i have 1k dai in the dai pool. 1% of the price pool will be claimable by POOL holder based on their % of dai the dai pool…
I know that from a gas fees it does not makes sense but does pooltogether users really claimed their referal rewards ? Not so sure about that. So it will pilled up unetil L2… etc
I think this is a way to incentivise POOL holders to hodl and maybe help POOL token to hold his value
And i think it could be voted in a future proposal

I think this would be better received if the custom smart contracts were already in developement and we could have more details on that. Maybe you guys could join the pooltogether developement team and build this token as a POOL product instead of being a third party. In that case it would be cool if it was on brand with POOL. I like the idea, just not in the way it is currently presented.

Have you guys explored joining the pooltogether developement team on something like this? That is something I could get behind.

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Are you are telling it’s only possible to put in one fee across all pools in the pool protocol. I asked in an above question if this was due to some sort of weird technical limitation in the protocol. Is that the case?

Would it not be a better idea to create a sub application in the current POOL protocol and just allow a user to specify if they want to recieve X % of their interest and contribute Y% to the prizepool and adjust their odds accordingly? User gets more flexibility that way. I alluded to this in another post; the POOL protocol could allow users the flexibility of segregating where they want to deploy their interest and the no loss lottery was only one such application the pooltoegether concept actually uses right now.

In effect that is all your token is doing except it operates in a multi level ponzi sort of way whereby some proportion of the earlier accumulators of KKN skim interest off the top of later comers to the pool. That is basically what is happening; the jackpots are less appealing and new users in the pool have to hope more users come in to eventually compensate them for the negative interest differential they have by virtue of compensating/giving earlier users / bigger holders of KKN.

@ageless Pooltogether has a “reserve fee” functionality. Currently it is set to 0. This fee would apply to all pools and is the easiest way of implementing a fee. Other implementations could also be possible.

The suggestion you make about a pool where users receive X% as guaranteed interest would also be possible, though the X would probably need to be the same for all users.
I definitely think this would also be a valid way of doing things, just different.

My explanation for an extraordinarily bright five-year-old :smiley::

As POOL token holders, the value of our POOL token is currently based on the following:

  1. its voting power
  2. its potential of generating revenue once the platform is starting to do so

The amount of potentially generated revenue in the latter is heavily dependent on the cashflow generated by the pools, that is, the interest rate and the amount of money in the pools.

So the value of our POOL token scales with the money stored on the protocol.

Now we ask ourselves: How do we get more money in our pools?
We believe that the generic answer is that we create a broader palette of no-loss prize game products for our platform, attracting more customers with different preferences.

In order to do so, we propose the KKN product with the following property:

  • Instead of just saving and winning, pool members can now save, win prizes and collect KKN token to earn interest in one product. The longer they are in the pool the more they earn.

We believe that this is the best extension to the current product palette (bringing the most money on the protocol and hence maximizing POOL value) because it combines an attractive collectible reward with a light loyalty bonus and has a chance of repeating the extremely positive effect of a token launch we experienced last week.

As far as I have understood, the “pooltogether development team”, meaning devs from Pooltogether Inc. want to focus on building things on top of the protocol, while protocol development should shift towards being done by devs from the community. Kokoon is meant to be the first step in that direction.
This is meant to be a Pooltogether product, not a third party product. Maybe the branding would have to be adjusted to reflect that better.

I’m approaching this proposal from a long-term perspective. Short-term I can see how this may distract or detract from POOL token value generation. I do not believe the focus of POOL tokens should be this value generation at this time, it should be to leverage the current high growth momentum PoolTogether and enhance the protocol to continue that momentum.

It seems that it is inevitable that once PoolTogether becomes profitable/profit generating there will be a proposal to pass those profits to the POOL token holders. There is clearly high demand for that. And this aligns with the mission of PoolTogether.

The KKN protocol introduction represents something on top of the Pool protocol, it doesn’t appear to detract from the POOL token unless governance dictates as such. Governance still maintains full control of POOL, KKN provides an additional incentive layer for PoolTogether savers. KKN provides an opt-in benefit to try and gain an alternative savings source which I believe can only enhance the appeal of PoolTogether. The 75%/25% split, as noted above, could be done without the KKN protocol, I believe this (75%/25% split and the KKN protocol) should be considered for the below reason.

PoolTogether in my long-term view should become something beyond a save and win. I see PoolTogether not only being someone’s introduction to crypto, but being a vehicle for those to save, generate interest, and a chance to win an exceptional prize. My foundation is in financial planning and I truly see a strong future for crypto to be backed into financial plans and protocols like PoolTogether to be a less risky strategy for more conservative savers to continue saving and generating interest in some regular fashion.

This is not to say the original proposal does not needing any changes, the input from the community is invaluable and should be taken into consideration in the final proposal. But this is an outstanding draft to illicit input from the community and an original idea that folds in many aspects from items of interest throughout this board.

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Thank you for the thoughtful explanation :slightly_smiling_face:

First of all, many thanks to the community for the constructive feedback we received both in this discussion and privately. Currently, we are working hard on potential improvements to the concept.

A valid point was brought up by @ageless, namely that the kokoon pool becomes less and less attractive over time if no exogenous assets are added to it.
We have been running some simulations (check out the link below if you’re interested) where it becomes apparent that this problem has to do mainly with the proposed limited KKN token supply.

With the limited-supply model presented, the interest sharing runs into a fairness issue: For instance, assume we airdropped 30% of all KKN tokens to the PT community. Now 30% of all interest generated will forever be paid to those KKN holders who didn’t necessarily contribute to the prize, making the kokoon pool less and less attractive if it doesn’t grow.

[More mathematically speaking:
Assume a scenario with 4% Compound interest. If you entered the pool as the last person with p percent of all tokens having been distributed already and stay there indefinitely, your expected share of the interest converges towards

(prize expectation) + (income from accumulating KKN)
= 3% + (1% * (1-p)) --------- which is < 4% and hence neither fair nor attractive.]

So how can we combine prize sharing, loyalty reward and pool fairness sustainably? The simple answer is that we could make the token inflate indefinitely by giving it infinite supply. Now, the rewarded interest for having been in the pool decreases over time if you leave the pool, which is more than reasonable.
Analogously, the effect of any initially distributed KKN decreases over time.

[More mathematically speaking:
Assume the same scenario with 4% interest. Further, assume a very simple minting mechanism where one token is distributed at every time step. If you enter the pool as the last person at time T , exactly T tokens exist already. Again assume you stay there indefinitely and everybody else does so too. Now your expected interest at time t is

(prize expectation) + (income from accumulating KKN)
= 3% + (1% * (t/(T+t)) --------- which converges towards the fair 4% and is sustainably attractive.]

Despite the infinite supply, any scenario with faster pool growth than token minting results in an increase in income per token, so the loyalty reward incentivization persists. For long-term members, the expected interest converges towards a fair equilibrium from above, for new members from below.

As a nice side effect, this would also allow being more liberal with the initial distribution of the token. There could be an airdrop to POOL holders or POOL governance, without making the Kokoon pools decreasingly attractive in the long term.

Summing it up, token inflation presents itself as a way to maintain sustainable fairness while airdropping KKN tokens, rewarding both POOL holders and new Kokoon pool members simultaneously.

If you are interested in the details, hit me up or check out the simulations in this Colab Notebook: https://colab.research.google.com/drive/1YinckZscU2aJCegnZbLCkif5w0o-TFDv?usp=sharing

We are excited to hear your feedback about this!

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