POOL Depositor Distribution

1.) I agree that lowering the total POOL issued to around 100k per year would be good. But I still think DAI and USDC pools should get a large share of that, since they have better interest rates on Compound. This leads to more value generated by money in Pooltogether, which can be captured by something like the reserve mechanism. In my opinion the value of the protocol is linked to the value generated. We should incentivize high interest deposits more than low interest ones.
So I would propose also lowering UNI and COMP POOL distributions to way under 255 per day, for example 30. This allows DAI/USDC to be set to around 480.

3.) I think the distribution to the POOL pool needs to be done very carefully. If it’s too high, this essentially becomes a ponzi scheme, like many scam crypto projects out there.

Another way of preventing the “whale farming and dump” problem is to just timelock the yield farmed tokens. If the whale needs to hold the tokens for a significant time and doesn’t know the value of POOL at unlock, it will be much less attractive to farm with the intention of dumping.

I think @gabor’s idea of a targeted airdrop to replace some of the liquidity mining could be nice. He has made a separate thread here: Extraordinary Airdrop to Governance Participants

5 Likes

I definitely agree that we should be encouraging smaller participants in the pools as opposed to encouraging larger whale deposits. This aligns with the thinking of having a RabbitHole campaign to encourage more deposits from smaller depositors.

This is overall a fantastic and well thought-out idea that I think we should act on fast, so we should go ahead and place it up for proposal.

1 Like

I like all these ideas @Torgin !

I do however still think it would be worth bringing them all into harmony, at least for a bit. That would give us a good feel for what pools people use when the distributions are all the same. I wouldn’t be opposed to dropping rates for COMP and UNI but I think I’d rather drop them first for Dai and USDC, judge the impact, and then make a second proposal based on that.

Doing some sort of lock would also be great but that is just much more work. This proposal would actually be VERY simple to implement. All you need to do is:

  1. Go to the proposal creation interface
  2. Select the dai and USDC token faucets
  3. Set the drips per second to 2952569916855631 (that’s the same as what it is set for the COMP and UNI pools right now)

Agree it is a little annoying that none of us have been able to reach the 10k just yet. I reached out to Leighton earlier on to let him know I am in the middle of transit/moving and should be settled back in early need to week to continue working on my part. I have two calls confirmed with two well known projects to hopefully get commitment of a incentivised pool and no-loss pool as per my delegate pitch. A few others will first dip their toes in by contributing to the Loot Boxes.

3 Likes

I like the idea of a timelock on the tokens…

Just to be transparent, I’m not a whale but I have a meaningful amount of USDC invested in the pool due to attractive yields compared to other tokens. Even at $15 POOL, the yields are better here than most other platforms yet it means dumping the POOL on the open market like the whale did. I had invested $25 in some early pools and left it in there and came back to the site due to the distribution of POOL tokens. You never know…attractive yield may bring some people back to stay!

4 Likes

I guess the question is though, are you holding the POOL you’re earning or just selling it? :slight_smile:

Holding for now…want to make sure I won’t vote with them before I delegate or sell. I’m really intrigued by the whole concept. Why wouldn’t something like this replace the lottery at some point?

1 Like

That’s good to hear! :heart: Yeah, I think the best path forward would be to design a mechanism so that people like you who want to hold can still receive a lot but we don’t have the massive whales taking the prizes + dumping the tokens.

1 Like

Just read the thread and i’ll delegate my voting power :slight_smile:

On another note, the claim per pool bother me a bit…
Why not having a POOL pool where people can deposits and be rewarded in POOL token but also that our claimable POOL due to deposits in other pool be directly put in the POOL pool and be claimable from the POOL pool?

If i just think about the fees i’ll probably never
« Till l2 » claim my claimable POOL even after 90ish days…

1 Like

Plus i think the keys here for the rewarding are the following:
If you are not holding, voting, delegating, a depositor to current pool, … you should not be in the path of getting rewards

2 Likes

Had a closer look at that transaction and that whale has 4M in the DAI pool which generates a really nice chunk of the prize. We should be ensuring he keeps his 4 million here and provide more incentive for him to keep his POOL here going forward. It can be frustrating seeing people sell like that but I think it’s kind of part of it. I’m really concerned about stripping away such a large chunk of the incentive to contribute and watching the Pools start to shrink. Would rather see the POOL pool added first and see how that goes without stripping so much POOL rewards stripped from the top performing pools. Feel like the first 3 months the rewards should stay close to what they are to keep the growth going. We should be aggressively pushing for more growth at this early stage.

The rate doesn’t feel that fast to me. I have 9K DAI deposited and am only getting about $10-12 per day in POOL. I am keeping all my POOL of course.

How many POOL is currently being minted in total per week right now?

If I’m not mistaken, and this is totally anecdotal, I believe most protocols end up slashing rewards pretty quickly. We got two whales to deposit 10 mil when the mining rewards got released. This magnitude was probably not accounted for. They will still receive a large amount of pool tokens if we slash and they still have really good odds to win one or multiple prizes every week. The prizes cannot be discounted when predicting the action of the whales

1 Like

Right now it’s 35,700 POOL per week being distributed (across all 4 prize pools).

The thing is, this whale is currently earning a bit more than 229 POOL per day ($4,590) and just selling it. They are contributing $936 in interest to the prize daily. So the protocol is giving them WAY more value then they are contributing. Additional to that, they also have the best odds of winning the prize each week so they are making their money back anyway.

I think lowering the rate aggressively now opens the door for us to do much more creative things with the POOL that are long term aligned.

3 Likes

Yep, we should reduce the allocation tomdai and usdc pool.
And why not, keep x% on every pool every week to build sponsorship non winning deposits ?:thinking:

1 Like

distribution_per_day*POOL_price / USD_value_deposited * 365 = APY

POOL
USDC: 2,295.91x20 / 33,000,000x365 =51%
UNI: 255x20 / 17,619,869x365 = 10%

Compound currently:
USDC = (3.97 + 4.14) = 8.11%
UNI = (1.15 + 0.98) = 2.13%

So the ratios are quite similar; The COMP distribution reward varies by a factor of 4 on compound also. The yields don’t trade at the same ratio on compound so why should we be doing that on pool?

It’s no surprise really that UNI holders are staking in such high volume, they are getting a 5x better return than leaving it in compound; it makes sense to move your UNI over to pooltogether to capture a 500% increase in yield.

If you reduce the deposit incentive by 9 fold on DAI and USDC I think that is too much. There are also people deposited there because it’s a really cheap way to acquire POOL. The market is the most expensive place to get it, but because it is trading at such an attractive premium it’s mores a reflection that people can’t acquire it fast enough. Reducing the distribution rate should be positive for price, but we should just reduce to the extent where the market thinks it should be right now imo. If you took it down to a third of what it is I think somewhere around there is probably appropriate; you still want to maintain competitive advantage over compound at $20 POOL price point imo. You could also do this for UNI and COMP and it probably wouldn’t shift the deposits there since the yield is still better versus compound. I’d argue holders of UNI specifically probably hold the most optimistic view on POOL future value so that could skew their tolerance to even accepting it when it’s less favourable than compound.

4 Likes

Playing devil’s advocate here…whales dumping means there’s a buyer of POOL on the other end of the transaction. Perhaps this is a good opportunity to acquire POOL at discount prices? I certainly get the spirit and agree with some compromise between incentives to attract large dollars and incentives to keep POOL in the hands of people with long term vision for POOL

4 Likes

I like this analyzes. It’s a good point. I like the harmony of making them all the same to give us a baseline we can then adjust from but doing something a bit more moderate could also make sense.

Overall, I don’t think this should be seen so much as “reducing the distribution” but more so reducing a certain method of distribution so we can increase other methods that may be more effective at getting POOL to long term actors.

3 Likes

If the pool grows to 500M he will be breaking even compared to what he is contributing. I’d like to get more whales in and deal with it that way. If we keep our foot on the gas we could get it to 500M.

In the early stages of Badger I was making 5 Badger per day on 10k. That shrunk as more people jumped in but Badger reached 1B TVL fast.

I would like to shoot for 1B TVL in the first 3 months and then scale back. I feel like it’s achievable.

3 Likes

I get the idea of reducing some rewards, but simply having it match Compound and UNI doesn’t make 100% sense to me, and here’s the reason why:

1.) The number of stable coin holders is much, much more than COMP and UNI

COMP: 139,486
UNI: 174,116
DAI: 316,835
USDC: 694,592

The whole mantra of Pool Together is anyone can win, so by having equal rewards for each token, it’s increasing the barrier to entry for people (relative to the population). If we should make this fair, I think we should consider the number of holder of the tokens.

Therefore I will not be supporting this proposal.

Also, PoolTogether’s bread and butter is the stablecoins as input, so I definitely think more weight to be put towards the rewards for the stable coin pools.

9 Likes

Do you think the whales are factoring in the prizes?
Let’s say 1 in three odds of winning a prize. 52 weeks/3= Around 16 wins/year *20k = 320k. Excuse my math. I just did it in my head but it’s close enough. On a 4 million deposit that’s close to ten percent additional yield. I think they will still stay if mining rates are slashed.