It’s time to start the important discussion around setting POOL distribution rates in a longer term and sustainable manner. There are a few prompts to starting this discussion now:
- We are nearing the end of the original 14 week distribution (May 26th)
- We have new yield sources integrated that are offering higher APRs than our current ones. We may want to apply some POOL to them. They are launching soon.
- The current distribution has run for a full 8 weeks giving us good data
Thinking on this topic, I have a few principals in mind that the community may or may not agree with.
- Continuing POOL distribution at a slower and longer term rate is a good thing.
- POOL distribution should target assets yielding the highest APRs
- Changes to POOL distribution should be infrequent allowing long term planning and minimizing gas costs for users
- POOL distribution should remain more generous in the near term (12 months) as rapid growth continues
With all this in mind I’ve created a spreadsheet analyzing the current distribution and suggesting a potential new distribution that can run for 12 months. Key points of this spreadsheet are:
- Currently the UNI and COMP pools provide the lowest APRs, and the worst ROI per POOL distributed. Accordingly I propose an 80% decrease in their daily POOL allocation
- The Dai and USDC pools provide the highest current APRs, have the largest deposit base, and return the best ROI per POOL distributed. I propose a large but less dramatic reduction of 56%
- New pools will be launching with Aave, yearn, and other yield sources. I propose a uniform 100 POOL per day distribution to these new high yield stablecoin pools
- I also propose an assumed additional 400 POOL per day for new prize pools that will launch in the future.
On the net, this would amount to a 50% reduction in daily POOL issuance while also spreading POOL issuance across 13 instead of just 4 pools. Here is the analysis.
This post hopefully kicks off a discussion. I’d love more analysis and thoughtful input on how to best structure this for our long term success!