I have an interesting idea to further minimize gaming of v4 deposits (using POOL token rewards).
Background: We designed v4 with wallet caps to prevent whales from winning all the prizes. Whales can still use a work-around by splitting deposits across multiple wallets. Personally, a lot of my non-whale friends (with deposit sizes between 5k - 50k) also split their deposits across multiple wallets.
Solution: So if we can come up with a solution to incentivize whales to not split their deposits and concentrate their deposits in a single wallet, it greatly increases the probability for small fish to win more prizes. We can do this by using what is a simple “step function” leverage POOL rewards as a distribution incentive.
Here’s how it works
We can distribute POOL rewards based on deposit size from a wallet based on a step function. Higher the deposit, more POOL rewards are distributed based on a step function. As an example,
If a user deposits $10k from a wallet (and meets all other criterion), assume they get 5 POOL tokens as a reward.
If the same user splits $10k as $5k + $5k into 2 deposits - then they should only get 2 + 2 POOL tokens for a total of 4 POOL tokens (instead of 5 POOL tokens) for the same $10k deposit.
So this will incentivize whales to have higher deposits from a single wallet (instead of splitting) to maximize POOL rewards and at same time are restricted by wallet caps to win prizes and indirectly increase chances for small-fish wins
This solution will greatly increase TVL as well.
Clarification: Rest of criterion on distributing POOL rewards to right individuals is up for debate as a separate topic.
I’d much rather figure out how to utilize dripping other tokens like the MATIC we’re earning from Aave. I’d go so far as to say that we’d want to start the step function at some amount like 25k or 67th percentile of deposits or some such thing. I’d rather hodl the POOL in treasury until we fully flush out a mechanism to distribute that POOL to those in the community that have the interest of the protocol in their being.
Hi @Brendan - Fully agree that we don’t want to do allow liquidity mining of POOL tokens to whales like yearn who are farming/dumping.
But at some point in near future, we will have to come up with a strategy to distribute POOL tokens to long term aligned community members who meet our desired criterion. When we do so, it makes a lot of sense to use this idea of a step function distribution to minimize wallet splitting.
P.S: I did inform atleast 10+ newbies that they may get POOL tokens for their v4 deposits (retrospectively from Oct) based on a yet to be decided criterion (such as long term alignment with protocol and not to farm/dump investors). Please let me know if this understanding is incorrect.
Let’s suppose that gets implemented, I suggest we should have 2 kinds of tickets
“Daily Tickets” that counts towards daily prizes.
“Weekly Tickets” that count towards the big weekly (or monthly) prize of let’s say $1 million.
I will call these “Golden Tickets”
Then we can use those “Golden Tickets” to replace POOL on tanman’s idea:
This would then reward whales who keep all in 1 wallet by giving them better odds of winning the one big prize (especially the ones who want to gamble, which I believe in PT there are a lot of those) and thus leaving the rest of prizes to the mere mortals like me
I feel its extremely important to devise a strategy where medium/large depositors have incentives to deposit “higher amounts” per wallet (without splitting) and are restricted by wallet caps. Without this, our current v4 strategy is only a token marketing message and not truly allowing small fish from winning more prizes.
The only way we can do this is to incentivize higher deposits by using an external incentive (competitor L2 reward tokens, POOL token, or something else) using step function behavior i outlined above. It really does not matter if that’s POOL token rewards or something else.
not truly allowing small fish from winning more prizes
I was deposited in v3 from like week 2 until pods, small amount ~$600 in Dai. Never won
Moved to pods when they launched, slightly larger amount ~$750 in Dai, won a couple times before withdrawing because v4 was coming. I think I won like ~14 Dai
Migrated to v4 on Polygon, average smaller amount ~$615. Won $80
The only way we can do this is to incentivize higher deposits by using an external incentive (competitor L2 reward tokens, POOL token, or something else)
Also glad to see you’re on board with using some other token for this. I’m not sure what to do on Eth Mainnet, but for any other chains I feel like we could easily devise some system to distribute the “gas” token (polygon > MATIC, Avalanche > AVAX, etc.) as we will earn those from Aave currently.
Absolutely. Not questioning how v4 is so much better than v3. I had like a continuous 15+ day win streak in v4 where i won prizes everyday. I personally know folks who won Tier 1 prize ($2500) 4 times so far. There is no way this was possible in v3 based on our deposit sizes.
Having said that, i still believe if we only have wallet caps, but cannot restrict whales from splitting their deposits into multiple wallets, then we will go back to having the same problems. As an example - a whale with a $10M deposit can split their deposit to 10k wallets with $1000 each. And all of a sudden, i now have to compete with 10k new wallets to win a prize.
The only way we can get around this is an innovative strategy that appeals to whales - golden tickets (@Gonbatfire), NFTs, competitor L2 rewards, …POOL token…or 100s of other incentivization schemes.
Disclaimer: I am not a whale, and i split my medium sized deposit across multiple wallets and encouraged 10-20 of my friends to do the same. With the right incentive, I am more than happy to combine everything back into 1 wallet for my own sanity and so been brainstorming hard on this idea.