Proposal 2 to set the global reserve rate to 5% is about to pass. I’m happy to see this had such broad support.
One difficulty with proposal 2 is that the reserve rate is currently applied globally. This means all prize pools will have a 5% reserve rate (Governance managed ones & community ones).
I think this is somewhat non-ideal as 5% is actually quite high for community prize pools but quite low for governance managed prize pools.
Having a much higher reserve rate for governance prize pools has a few key benefits:
It takes winnings away from the whales and instead keeps more money in the protocol “sponsorship”. This raises the effective APR for everyone and minimizes the impact of whales leaving.
It begins to build a powerful and reinforcing network effect that having a deposit in PoolTogether is ALWAYS better than having a deposit in the underlying yield source.
It opens up the option to use reserves for a variety of things that have been mentioned in this forum
I’m posting this now to gauge interest to see if we should push forward with the update enabling this.
VOTE in temperature check here: Snapshot