Great points! A few responses:
According to Llama DAO’s report, I believe (correct me if I’m wrong), that only ~15% or so of POOL emissions are being sold after being earned.
This was stated in the Llama DAO report but their data collection was not very good. We would need to research this a bit more to validate. This would be worth pursuing. I can say, simply looking at the contracts. There are not a lot of claims against the faucets. Here is the Dai faucet it’s pretty much just the whales claiming. There have been 25 claims in the last 6 days.
We want big prizes with v4 (that $1M weekly prize goal!)…
Agreed. We need big prizes and removing the drip will mean a lower TVL. However, assuming we are subsidizing the prize directly it will mean the prizes will still be just as big as they are today and if there are less whales it means there will be tons of people winning them. This paired with low gas fees will hopefully mean that we accelerate organic growth of smaller deposits. We can then add in POOL incentives to make growth explode.
If we end the drip on v3 and keep it on v4
Another good point. Ending drip on V3 is imperative to me and adding it to V4 is also imperative. It’s just a matter of when and how.
I also want to add some nuance to differences between on POOL incentives worked in V3 vs. V4.
V3 was a simplistic pool distribution. It was awarded in real time and equally to all depositors.
V4 gives us a lot more options because of the “TWAB” (time weighted average balance). We can measure any users balance over the last 6 months. That means we can implement things like “Streaks” (i.e. keep a deposit in for a full month and get the POOL bonus then) or other creative ideas. All in all, it should allow us to be much more effective in distribution pool.
Finally, keep in mind that V4 is multi-network so any incentives will be done on a per network basis.
To re-iterate, I 100% believe we will want and need POOL incentives to reach escape velocity for V4 ($1 million weekly prizes). My proposal is not to stop them forever but simply to use a phased launch to make sure they are done effectively.
Phase 1: No POOL incentives but subsidize prize directly, focus on ensuring everything is working properly, parameters are optimized, and people are winning lots of prizes. Make sure people love the protocol even without POOL
Phase 2: introduce POOL incentives in a targeted manner to grow prizes while keeping odds of winning the same. Use POOL to accelerate growth
Phase one would start October 13th and ideally Phase 2 would start in early November