Now is the time to start building a treasury reserve. We can build the reserve and later find ways to use the funds to benefit Pooltogether users and POOL holders.
I propose that we start by allocating 10% of the prize pool on all interest earning pools directly to the treasury reserve. The treasury reserve can build a nice portfolio of DAI, USDC, UNI, COMP and more. It is important to take advantage of this opportunity during this liquidity mining phase to keep Pooltogether sustainable long term.
I don’t think this will have a negative impact on players as it would only reduce the prize by a small amount and this can easily be made up for by growing the pools combined with liquidity mining rewards. I believe this move would contribute to the value of POOL token as we will have these funds available to make the protocol stronger. It will add further incentive to accumulate POOL.
There are lots of ideas on how we can later use those funds (Fair pools, buybacks, emergency use, rewards, bonus prizes, grants, etc) but I feel those can be discussed in later proposals once the reserve reaches a substantial amount. My hope is that here we will just focus the discussion on the creation of the reserve.
It is my intention that after some discussion somebody with the necessary amount of POOL can quickly move this to a vote. I have seen in discussions on the forum and the discord that this is something the community desires.
I agree that the timing seems good with the huge AuM thanks to the liquidity mining. How does 10% benchmark versus other protocols? To me feels relatively high but would be interesting to see how it compares to others.
We can start with a 2% reserve.
I think 10% is a good number based on the current size of the pools. If the pools grow and the reserve starts taking in more funds as a result we can always lower it or redistribute it. Accumulating value is a good sign if your a POOL holder and should help increase the value of POOL.
Based on the last DAI draw it would have brought in 10K DAI for the reserve and only cut each prize from 33K to 30K. From my standpoint this does not make the DAI Pool any less appealing and makes the POOL I am earning even more appealing.
Pooltogether is unique and I’m not sure what protocols would be best to compare it to.
I think this is great idea to create value for POOL holders. I do think 10% seems high, especially when staking / liquidity mining brings in lower yields as the market matures. I would think 5% for the POOLs and a smaller percentage for the community pools – 2.5% (they are using the network so should also contribute). Then would suggest that the Treasury Reserve stake /mine to continually grow the reserve.
Overtime, 5% and 2.5% should result in a significant treasury. My 2 cents
I think Leighton mentioned on discord that it would be alot harder to implement with different rates on each pool. You guys really think 10% is that bad to start? It’s coming out of a prize pool so nobody is really losing anything.
To me, 10% seems fine for the main pools, as long as liquidity mining is active. I think it’s too much for the community pools. As it’s not easy to implement different rates for now, I think 5% on all pools is a good starting point.
Having a high reserve value on community pools incentivizes forks. A fork would effectively have a reserve of 0%.
I suppose 5% to start could be good enough. This is something that needs to be implemented sooner rather than later. Need somebody with 10K POOL to put this up for vote!
Great discussion here!
I personally also agree turning the reserve on makes sense. I think it is quite tricky to know how much since the community pools are really just getting going and we do want to increase the forking incentive.
I think 5% as a maximum probably would be okay. 2.5% I would feel more comfortable with. This is really just because it is applied uniformly across all pools.
Is it difficult to amend the protocol to allow for custom rate per pool?
yes, that would be very difficult and setting a single rate is not difficult at all so I think right now the rate should be set uniformly.
I can definitely agree with the 2.5% or 5% option and hope down the road we can raise the rate on the governance run pools that are receiving POOL tokens. Now we just need somebody with enough juice to put this proposal to vote. Where is the hero we need?
There is an informal poll live now:
Please go vote!