PTBR-12: PoolTogether <> Generation Software Inc. Q1 2024

Governance PT Budget Requests
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PTBR-12: PoolTogether <> Generation Software Inc.

Vote here (starts on Jan 3)
Start Date Jan 1st, 2024
Timeline for Deliverables 3 months

Generation Software (GS) is a software consultancy specializing in web and blockchain applications. This proposal offers deliverables and IP in exchange for compensation.

Our Team

Our company is comprised of PoolTogether community members and ex-employees of PoolTogether Inc. who hold deep knowledge of the technology, our history, and the vision for the future. In the past we’ve made core contributions to the protocol, so we have direct hands-on experience.

Review of Previous Scope of Work

In PTBR-7 for Q4 2023 we requested funds to launch PoolTogether V5 and develop a rewards system.

Public Launch

PoolTogether V5 was successfully launched! The new protocol has been running since October 18.

We’ve also shipped many improvements to the app, bots and subgraph infrastructure during this quarter.

Token Branding Guidelines

We published token branding guidelines on Figma.

Brand Identity Kit

We published an updated PoolTogether brand kit on Figma

App Design Kit

We published a PoolTogether V5 App Design Kit on Figma

Rewards

The Cabana app now supports Rewards using the same kind of Twab Reward system as in PoolTogether V4. The protocol can now liquidity mine!

Anyone can permissionlessly add Twab Rewards for users. Rewards need to be whitelisted in the Cabana front-end, however, so that people can’t spam with malicious tokens.

Flash Liquidations

The new flash liquidation app allows users to earn POOL simply by running a transaction. The app uses liquidity from Uniswap to liquidate yield in PoolTogether V5, which means the user doesn’t need to hold any POOL in order to earn POOL.

Arbitrum Testnet

We deployed PoolTogether V5 to the Arbitrum Sepolia testnet.

Scope of Work

Goal

Now that PoolTogether V5 is deployed and the incentive system is live, our focus will be growth on Optimism and launching on the next chain.

  • New Vault
  • Prize Compounding Interface
  • NFT Delegation
  • Marketing
  • Launch on Arbitrum
  • POOL Staking
  • Evaluate Ethereum Deployment

Deliverables

New Vault

It was discovered recently that the existing ERC4626 vault doesn’t work well with Aave. We will build a new Vault that ignores collateralization and so therefore functions cleanly with Aave.

The Vault Factory will be audited and deployed.

Prize Compounding Interface

We believe an easy way to increase growth is to help users convert their winnings into more prize assets. Users should be able to easily convert their POOL prizes back into vault tokens like pUSDC.

We are going to start by updating the win interface to include calls-to-action to turn POOL into more prize assets. We are working with integration partners to make this a one-click process of swapping and depositing.

If this feature proves to be successful, we can explore automating it in the future with smart contracts and prize hooks.

Delegate to NFTs

Delegation has been a popular way to share PoolTogether with others, but it can be challenging to use. We will build smart contracts that allow anyone to delegate chance to entire NFT collections. This means that the holders of those NFTs will win prizes!

We believe integrating NFTs into PoolTogether will open many partnership possibilities, and allow us to compose PoolTogether in really cool new ways. Imagine we delegate $100k to a new NFT project every week; sharing PoolTogether with so many more audiences.

Cabana Marketing

We will run a marketing campaign for Cabana by rewarding referrals through the interface.

Incentives are going to start soon, and we need to actively promote them in order to maximize awareness. Our team will reach out to influencers and offer them referral rewards; their followers win because they’re using a safe protocol and earning free money, and the influencer wins because they get referral rewards.

Launch on Arbitrum

We will deploy the core PoolTogether V5 protocol to Arbitrum. The team will deploy a prize pool, rewards system, and vault booster factory. All apps will be updated to include the new chain.

POOL Staking R&D

We will research ways that we can implement POOL staking and present our recommendedation to the community.

Evaluate Next Chain

We will evaluate which chain to deploy to next and make our recommmendations.

Support

We will continue to support the community and coordinate with the Council of teams. In particular:

  • Ensure apps are functioning and bugs are fixed
  • Release documentation, tutorials and videos and answer questions in the PoolTogether Discord.

Budget

Note: the budget below includes $52k for an audit and a $25k marketing budget.

Amount Denomination Details
$408,525 USD Denominated in DAI + USDC
44,500 POOL Priced at $0.50 per POOL
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Hey @Brendan,

Thanks for the update to include the work to upgrade the current vaults.

One thing I wanted to ask about that I didn’t see here: in past council calls, there’s been talk of working on a migration plan for V4 users to move to V5. Is that still planned, and, if so, will that be an initiative GS will pursue in Q1 after the work to upgrade and audit the vaults is complete?

Of all the existing initiatives to grow V5, I think migration is likely the most meaningful, so I thought I’d ask where that sits in the current roadmap.

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That’s a great question @BraveNewDeFi!

After a successful Snapshot proposal the council developed a migration plan.

The migration plan was updated and can be seen in the updated gov post.

The plan is a joint effort between Generation, Pooltime, the Exec Team, and PT Inc. Generation’s role will be to modify the PT Inc websites and domains, so we’re going to create a service agreement directly with PT Inc.

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I’ll be direct and unpleasant as someone has to be :wink:

This has been pitched for years now I’m glad you are finally considering to implement this. The community has asked for this over and over again.
Are there any existing partnerships that can utilize this type of tooling?
I do also think some oversight will be necessary to delegate to meaningful projects outside of the PT community to foster mutual interest.

Is there more involved with this besides bribing convincing these influencers to shill PoolTogether? Are we talking use of our existing documentation and education or just a “go use pooltogether it’s really cool”.
Please don’t tell me this is just for a few posts on crypto twitter.

What is the expected marketing budget and how does it compare to other spends?

Do you have any insights or more details on this yet?
This has been a discussion for years and I’m surprised more context & details aren’t included here. We should certainly have some insights by now.
It seems that the POOL token doesn’t play much of any role in governance right now besides dividing up the treasury amongst ourselves.
“Governance” meaning centralized token-weighted voting.

Are there any main contenders as of now?

So what happens after this quarter if some of these deliverables are not met?
Will they be added to the next quarter again with a bigger ask and commitments?
$408,525 USD is quite the ask (again). I don’t know how many more of these budget requests we as a community can weather when utilizing stables.

Do you suggest using POOL instead and how will we account for the diminishing returns on redemption?

Can we get a breakdown of how these funds will be spent and the team members associated with generation software’s goals?

I think presenting the due diligence will give voters confidence that the compensation is appropriate by seeing evaluation criteria and rationale.

We need to provide voters with enough information to evaluate a budget request. Not all voters have the same experience or background, so we need to step up.

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I’m glad that you’re excited about it too! V5 finally makes it possible.

The marketing budget is $25,000. It’ll be an important experiment to see how effective affliate marketing can be, and to maximize liquidity mining by making sure as many people know about the opportunity as possible. The liquidity brought in by affiliates will be tracked, so we can see what people and channels are most effective.

For context, the recent one-month LM campaign used about 8000 OP. That’s approximately $27k USD at market rates. In order to sustain the same APR at higher TVL, we’ll be burning through the OP much faster. The $25k marketing budget is small compared to the OP burn rate, and will help us maximize exposure.

One other thing I want to add is that $52k of the budget is for the cost of the audit. I’ve updated the info in the PTBR to include it.

Additionally, I want to point out that $52k of our previous budget has been allocated to an ImmuneFi campaign, whose launch G9 has delayed to coincide with the relaunch of the vaults. It’s only been mentioned in a gov forum reply, so it’s worth pointing out again.

The POOL we’ve requested is going to team members that have received little to none- and these are the people building the protocol full-time. It’s important that they hold POOL, and it’s covering a portion of their compensation. I agree that we should lean more heavily on POOL, and I’ve said as much. However members of the community did not want more POOL going out, so we used stables for the previous quarter. This time I’m pushing for POOL to reduce the stable spend.

In terms of our past deliverables, we have always either delivered or pivoted according to the needs of the protocol. This is why I open the proposal with a review of what was accomplished in the previous PTBR.

The Vault issue that was discovered last week was extremely unfortunate, both in terms of limiting our growth but also in terms of the financial impact on our treasury for the cost of another audit. However, we have a clear view of the solution and we are confident we can build past it. When we get incentives rolling again and get the message out there we’ll see those numbers go up again!

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This will likely be lengthy.

Short Version:
I’m losing faith in GS and in turn PoolTogether… And this commentary from a (heated) conversation in # governance on Discord doesn’t build any faith in the management of GS. A thinly veiled threat.

You’ve already voted no, so you’re doing something. The proposal failing would dissolve G9

If G9 dissolved it would be very difficult to come back

They are great at creating milestones that seem relevant to the protocol and even better at missing them while maintaining just enough of the right vibes to skate by. Their financing is substantial compared to the other teams, but the protocol is not seeing a representative size of impact. In other words, other teams are making proportionally larger impact compared to their costs.

Beyond this the timing for review of RFC appears to be getting shorter and the launch the vote nearly the same time of the PTBR is just ridiculously poor execution. Yes we had the holidays why not hold off on the PTBR and pump the barely read RFC after the holidays, if the team is so low on funds that they couldn’t wait to the turn of the year to allow for ample review the management of their assets should be questioned. And given the comment above, we should be questioning it further. GS should have more than 2 weeks runway.

GS has had 2 prior PTBR’s, I’m not including the Pool Inc. PTBRs as that is technically a different entity. In those PTBR’s they have requested a total of $971,454. Have we seen enough impact to justify nearly $1 million of outflows?
I don’t think so.

Beyond the PTBR’s GS has made protocol decisions without consulting the community. Dissolving POOL as a governance token. Locking prize issuance as the POOL token which has not had the desired (and alluded to) effect. Locking out anyway for protocol revenues.

In these prior PTBR’s the following items have been suggested as deliverables (summarized for brevity):

Deliverable Notes Yelp
Audits and Mitigations with Code Arena and third party firms This is great, but we’ve still had some bugs and we’re paying for it 2/5
Deployment of v5 to Optimism, Arbitrum, Ethereum, zkSync Era, Base Deliverable stated they wanted community input for order. We’re only on OP (as community dictated as the 1st launch), community has emphasized Arbitrum as next target with a small group also looking to Base. We’re just now kind of planning the Arbitrum launch 6 months and a million dollars later. 2/5
Communication Campaigns for each chain, find audience and provide media written and visual for Medium, Mirror, Twitter, Discord, etc., and creating documentation for partners Give credit where due, there was some communication campaign but it was in our own echo-chamber, and we had more going in v3 and v4. 2/5
Community Creates Vaults – docs, tutorials, guidance on which protocols would be good This was created but, if it wasn’t for Lonser it feels like this wouldn’t be a thing. Someone off GS did the work and provided the feedback to give this deliverable wheels and we still don’t have a clear way to integrate outside of Aave. 1.5/5 (4/5 to Lonser)
Infrastructure, bots to do the things, subgraph, apps for views This seems like the only thing completed. There’s videos for bot creation and GS is available for Q&A’s for those interested. Unfortunately there hasn’t been a huge capture rate within the community. 5/5
Bonus deliverable: multi-delegator and vault boosts Requested by the community in the Beta and incorporated 5/5
Public Launch Launched with echo-chamber fan fair 5/5
Token Brand Guidelines This is also completed 5/5
Brand Identity Also complete 5/5
App Design Kit and Figma file release complete 5/5
Rewards App – Staking contract, rewards contract, and app view to claim rewards The rewards contract is in place but this seems like it was basically a copy paste from v4. Is the staking contract – doesn’t seem to be given this PTBR 3/5
Liquidity Improvements There was some effort to create liquidity pools but they haven’t had much impact nor are they very deep 3/5
Additional yield sources – Rocket Pool Still not here, and only recently communicated that we are waiting on the Rocket Pool team to create the 4626 Vault. No mention of other possible yield sources 1/5
Testnets – Arbitrum and Base We’re on Arbitrum but not on Base. 1/5
Community Support GS is very much available for any assistance in figuring out any piece of v5. But when if comes to critiques GS seems reluctant to meet the community halfway and generally continues building whatever they want without community input – stemming from the very beginning on how v5 works GS has not really solicited the community on how they want the protocol to function 2/5
Bonus Deliverable: Flash Liquidation Was this needed? Underthesea already kind of built it in Pooltime, why make a competitor to a community developed function? 0/5

So what’s the take away?
GS can do the technical with some minor errors. Anything outside of the technical they can’t scope appropriately. They followed the mantra “If you build it, they will come.” Guess what, they haven’t come.

What’s the mean for this PTBR?
The New Vault isn’t NEW it’s a fix. This should be at a discounted rate to develop, the first one had an error. In the real world if something is done incorrectly you don’t pay the same person the same cost to fix it, you either have them fix it at their expense or cover minor costs. This shouldn’t be a cost to the protocol, but it will be completed.

Prize Compounding, cool this is technical so this will be completed.

NFT Delegation, as Andy stated this has been requested since we tested it out in v3. The community had no support then and we have basically no support now. There is no clear indication the BD work being done from GS or the Community has viable interest for this. But it is technical so this will be completed.

Marketing… yeah sure, this hasn’t worked yet. Props to GS for trying to do this as the Community has also struggled. But this is not their wheel house and maybe the Community needs to create an RFP and solicit an actual marketing service. This is a waste of funds

Launch on Arbitrum, still in bunkbeds with Aave so we’re gonna be losing out on integrating other yield sources. This is just an ARB farm. Technical so this will be completed

POOL staking… This was included in the prior quarter. Why are we paying for this again

Evaluate Ethereum Deployment. Maybe I’ve missed some conversations, but this doesn’t seem to be a highly desired deployment. I’ll admit I might be unplugged from those conversations so… Maybe this is worth it

Maybe I’ve lost the plot. Maybe GS has jumped the shark. Either way I think GS and the community are in substrates.

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I agree with @AndyKaufman and @Taliskye to large extent. My biggest concern is the high burn rate of the current treasury that potentially poses the risk of the death of the protocol already this year as there’s nothing left to fund developers at this continued rate for GS.

Therefore I would suggest to expand on the uses of funds and ideally identify positions / staff that is not needed in the proposed intensity in order to cut costs whilst enabling all must haves for further product development. Without an awesome product, there’s no prospect of growth. Whilst I like the direction the product has taken, I question whether the expenses of more than $1MM are good bang for the buck. My concern is that there is leakage to unproductive uses which ideally get eliminated. @Brendan and other key development staff must be kept motivated and rewarded, but there might be other areas where the PTBR can scale down.

Unfortunately there is no input at all from the VCs and therefore the community must assume that additional funding is not on the table. Hence focus on product and smart treasury investments will be key.

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Unfortunately, I will be voting against this PTBR. I’ll try to explain my reasoning below, and hopefully proposing some changes that would change my point of view.

First, there is a clear worry in the community regarding the cost of the proposal. I want to be clear that, although it’s something to have in mind, I am willing to approve such cost if we move in the right path. Development is costly and therefore the community should pay for it. This being said, there needs to be a roadmap in mind to be able to plan for the future. We cannot continue to approve spending half a million per quarter (across multiple teams) and just hope for the best when Treasury runs out. Therefore, if this proposal gets approved and GS continues their development work, I would like to see a somewhat detailed roadmap of what’s the next year going to look like (if possible with estimated cost).

My biggest concern is definitely the value provided by the development being done. Fixing the issue in the current vaults is a must, so I completely agree with that one. However, POOL staking and auto compounding UI feel like nice to have complements, but nothing that would change the current situation that we are in right now (low TVL = low yield = low prizes = less attention = less POOL price).

Instead, I would love to see more yield source integrations and more chains being added to PoolTogether. I’ve been hearing since almost the beginning of V4 that new yield sources would come in the next version as they would be easy to implement. I’m still waiting for LSTs to be added to PoolTogether and there’s almost no signs of seeing that happen in the near future. Also, chains like ZKSync, Scroll will definitely provide great value in the form of grants/airdrops if we deploy PoolTogether there. There are also other chains offering Dev grants that GS could apply for and get funding to deploy PoolTogether there.

Regarding NFTs, I also don’t think it’s the best path, at least not short term. Given the high amount of transactions required to execute a draw and distribute prizes, Ethereum in not a very attractive chain for PoolTogether (at least not right now). From what we have seen in the past, most NFT projects live in Ethereum and don’t want to go to any other chains. As a result, it will be difficult to convince NFT communities to use PoolTogether.

I sincerely hope that GS continues their development work with PoolTogether in the future, but I will.not be approving the proposal unless I see a different direction being taken.

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