PTBR-22: POOL Incentives

Governance PT Budget Requests
1

PTBR-22: POOL Distribution
Start Date October 29, 2024
Duration 6 months
Budget 800,000 POOL

This proposal will grow PoolTogether by launching POOL incentives across all chains.

Scope of Work

Motivation

Many of the current incentives end on October 28 or early in November. We need to continue the incentives to grow and maintain TVL. See the Rewards app. for more detail.

Distributing POOL to depositors will:

  • Incentivize deposits
  • Distribute ownership to as many people as possible
  • Distribute POOL liquidity across chains

Goal

We will distribute 800,000 POOL across all chains we are deployed to.

Milestones & Deliverables

TWAB Rewards

We will create a 6 month long TWAB Reward program that distributes 800,000 POOL across all six chains. Epochs will be weekly, except on Ethereum where it will be monthly.

The POOL will be distributed like so:

Chain Portion of Rewards POOL
Optimism 55.45% 443,599.77
Base 16.89% 135,140.36
Arbitrum 0.69% 5,556.26
Scroll 0.26% 2,068.02
Ethereum 21.99% 175,938.84
Gnosis 4.71% 37,696.74

The following is the vault breakdown:

Vault Chain POOL Effective Bonus APR
Prize USDC Optimism 308,639.43 6.51%
Prize WETH Optimism 79,406.01 6.72%
Prize DAI Optimism 32,585.87 7.15%
Prize LUSD Optimism 13,632.27 8.41%
Prize POOL/WETH Optimism 10,627.83 9.32%
Prize WETH Ethereum 99,762.64 7.03%
Prize USDC Ethereum 76,499.11 9.59%
Prize WETH Arbitrum 3,086.87 11.02%
Prize USDC Arbitrum 2,598.55 25.99%
Prize wxDAI Gnosis 37,890.49 6.89%
Prize USDC Base 53,865.22 7.03%
Prize WETH Base 28,348.32 6.91%
Prize AERO Base 17,042.60 7.54%
Prize wstETH Base 14,546.03 7.27%
Prize cbETH Base 6,428.35 8.69%
Prize superOETH Base 3,459.66 15.73%
Prize POOL/LUSD Base 9,415.86 7.85%
Prize WETH Scroll 2,164.89 15.25%

Timeline

We roll this out ASAP and have it last six months.

Budget

Budget includes WETH for gas.
800,000 POOL
0.4 WETH
1 Like
2

I don’t think this is a good idea at this point in time… but if we do go ahead with this, we need to include POOL stakers in the drip.

Honestly, I think I’d rather the team sell this pool for an actual non crypto nerd marketing campaign than just give it away.

1 Like
3

I also don’t think it’s a good idea, the funds could be used to increase dex liquidity across mainnet (uniswap is very low at approx $30k) and the main L2 chains and help for future growth of the POOL token.

At the moment the drip feeding of POOL is only leading to a temporary increase in TVL from users who are chasing yield. We can clearly see that this isn’t having a positive impact on the long term growth of the protocol given the tokens price.

If new users value Pooltogether and it’s future potential they currently can’t even take a sizeable position due to the lack of liquidity, I feel this should be addressed first in order for the token to be in a position to grow.

2 Likes
4

POOL Stakers

POOL stakers receive ETH (a portion of the yield). They already have incentives. The POOL stake also doesn’t contribute any yield.

The depositors should receive POOL because a portion of their yield is going to POOL. We are making them whole and giving them ownership of the protocol. Ideally, they’ll see the POOL rewards and take action with it; whether it’s staking, LPing, or selling.

For more background: the staking APR and yield cut for each chain is:

Chain POOL staking APR Portion of yield going to POOL
Base 66% 5.57%
Optimism 20% 5.57%
Arbitrum 0.8% 12.6%
Ethereum Not enough data 12.6%
Scroll 25% 12.6%
Gnosis 192% 5.57%

POOL Liquidity

This will address that by bridging significantly more POOL liquidity to other chains. The buyers can purchase POOL from those that are selling.

I believe the lack of liquidity will improve with Uniswap V4 and similar DEXs, because sellers will be able to behave more like LPs. Liquidity positions can be unidirectional.

Protocol Owned Liquidity

Trying to control or manage the markets is extremely difficult. You can see the PoolTogether protocol owned liquidity on Ethereum. It’s out-of-range, so it’s inaccessible.

Now imagine trying to manage protocol owned liquidity across six chains. It would be impossible / incredibly complex to do so because governance doesn’t extend there, and a Uniswap V3 position needs lots of attention.

On some chains, the dominant AMM is a Uniswap V2 fork. These positions are easier to manage, but they are capital inefficient. We would need a significant amount of stables or ETH in addition to POOL.

Focus

I believe we need to focus on what we can control: growth, token fundamentals, and narrative.

We need to continue to grow and get POOL in the hands of those that are bullish and out of the hands of those that are bearish. We need fresh stakeholders that want to contribute.

Increased volume and adoption will lead the token to be listed in more exchanges.

We need to get the word out there that POOL staking is valuable. It still feels buried, and not mentioned enough. Narratives drive adoption.

People worry about the price of POOL, but it’s irrelevant given how illiquid the token is. What matters is STAKING.

STAKING

If the price of POOL tanks to $0.01, then the staking APR becomes astronomically high. Rational people would stake POOL. If the price of POOL moons, then the POOL rewards become incredibly valuable. Rational people will dump POOL.

It’s a natural cycle, and I don’t think it’s something to fear. The price will find it’s equilibrium somewhere. What we really care about is VOLUME. We need more flow both ways.

POOL Rewards + POOL Staking should allow us to take advantage of movement in either direction.

I believe strong token fundamentals and a narrative that gets the message out there is how we will grow and achieve success.

1 Like
5

I think this is critical and I think now is the prime time to build that volume up. We’re on the best, most robust version of V5. We’re on the most chains, ever. Now is the time to proliferate POOL onto other chains and get the liquidity we need organically. We can’t sit on our hands idly. In terms of TVL we’ve been steadily increasing, almost hitting the $10M mark. That’s awesome progress.

It’s attractive to stake POOL now and we have extremely compelling utility for it across all chains. You can stake a an asset that guarantees you a chance at winning the grand prize while also holding a potentially appreciating asset. It’s a WIN WIN. I think a lot of POOL token holders think this will be an influx or tsunami of tokens hitting the market, but I’m doubtful. Historically, token unlocks have been bullish as it revitalizes the token holder list. I think we’ve really stagnated in that domain and we need to breathe new life there.

As a POOL holder, yeah, psychologically don’t do anything, keep the POOL supply the same. I get the apprehension. In the short-term that’s good and all, but we’re missing a potential lever for growth and new life for the POOL token. I say open the flood gates and see what happens. It’s likely to be exciting. We have a growth mechanism at our fingertips, let’s let it loose.

If we don’t do anything new, things will stay the same. The last time we had meaningful POOL incentives for deposits, we had substantially more TVL, just saying. V5 is the stickiest version of the protocol yet and I say let’s unleash it. The token fundamentals are so much better than before. Press the PURPLE button and bring the waves fellow Poolers.

2 Likes
6

I still think if we’re just dripping pool to everyone we should include pool stakers too. Might as well reward people staking the token and also have the additional incentive for new holders to hold the drip instead of dumping immediately.

I understand pool staking is not yield generating but if we’re dropping tokens anyways… Plus I think it helps make pool stakers whole since we’re draining the treasury and potentially impacting price from dumpers.

7

Encouraging liquidity is important: the POOL/WETH LP vault on Optimism is included in the distribution, and @Lonser has just notified me about a POOL/LUSD vault on Base. I’m going to update the distribution to include this vault.

If people are willing to risk the IL of those pairs, then they are bulls and they should earn more POOL. This will help POOL liquidity and get it into the right hands!

I maintain that pure POOL staking is incentivized enough; 60% APR in ETH on Base is massive. I think we have more of a visibility problem where people aren’t aware of the high APRs.

1 Like
10

I’ve now updated the PTBR based on several pieces of feedback:

  • People want to incentivize liquidity on Base, so I’ve add the Prize POOL/LUSD vault to the distribution
  • People wanted the distribution to last longer, so it’s been doubled to six months.

My expectation is that we’ll keep these incentives going; and if there are new vaults / chains we deploy to then we can launch additional incentives.

I’ve also added 1000 USDC budget to cover gas costs.

1 Like
11

PTBR-22: POOL Incentives has been proposed on Tally

Voting begins in 24 hours

Note: I changed from USDC to WETH for gas budget for simplicity

1 Like
12

Edit: I realized that I forgot to include the “Chain” column in the vault distribution. I’ve updated the table now

13

For the record there was a mention of dates in your original post but there was no alarm sounded that this would be put onchain 3 days after the RFC. The urgency was unnecessary given that 75%+ of the network TVL is incentivized for another 20 days or more from your original post.

Then when the votes were not going your way you overrode everyones opinion by voting with more tokens than the other 10 voters combined. So why did you bother to ask anyones opinion?

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The expiring campaign was also previously funded to your team and you have not provided any results. There is no accountability here.

2 Likes