PTIP-11: Treasury Diversification

This is likely covered in the third point I made. I don’t know what multiple, but it likely coincides with a big parabolic move.

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To clarify on this point @gabor the additional interest this contributes to the weekly prizes is the immediate and short term benefit of this proposal. The real benefit is that governance has $7 million of stablecoins to use for whatever it wants in the future. I think some people might be confused on this point, and think the $7 million is only about increasing the prizes.


Diversifying the treasury/reserve is key for the protocol’s success. Just getting more USDC is a nice short term bump but doesn’t change long term patterns. These investors can better justify such a discount (which is market but based on highly illiquid token price) by (1) pushing their portfolio companies to launch their own Pools. The reserve needs early stage company tokens to provide asymmetric upside to the reserve. That’s the fastest way to growth of the Reserve, not USDC. (2) Requirements to provide additional liquidity into the reserve for XX amount of time. On chain investment proposals by VCs are awesome and are great ways for growth, but the protocol shouldn’t negotiate as if it has no leverage! It has plenty.


Want to emphasize here the lock-up is frozen for a year, then a linear weekly release of POOL through the next year. So in effect they can’t touch all the POOL until end of year 2. I don’t think this is a critical point, but one that is being glossed over/not acknowledged.

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A few thoughts:

How we got to the base price using a 14 day average spot is pretty arbitrary, but I think it actually overvalues the POOL token a smidge. Maker currently trades at 34 PE. POOL trades closer to 40 - using an estimate of 80K/week of reserve capture. At 13 dollars that pushes it down to 32ish, which is hardly different than Maker, not even counting the 35% discount. Either way, what’s a few percent between friends.

We might get a better deal if we did a dutch auction, but the point of these deals aren’t really to sell tokens and raise reserves (I mean, they are) but it’s about getting connections with movers in the space. I’d have to defer to @Leighton to decide whether these folks are the right stewards for PT and not passive leaches.

Having said all that, this is pretty boring vanilla deal. Maybe we can be more creative next round and raise funds from the YAM treasury, or get whitelisted on Maker, or do a little farming with some alUSD

P.S. Maker is super undervalued imo :stuck_out_tongue:


Maker is 32 times bigger than Pooltogether, thus Pooltogether should have a much higher growth multiple factored into it’s price which it clearly doesn’t.

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4/7th of the deal is going to 2 investors that are already large investors in POOL. Are you suggesting that they are a). not already doing this or b). wouldn’t do it unless this deal goes through. Surely different investors than the ones already invested would give us more scope to capture deposits from a greater number of companies?

As for the other two funds listed here do you have anything other than speculation that they are going to do what you’re suggesting? There has been no input from either of them to my knowledge in this forum which I have to conclude means they are going to be as passive in their involvement post deal as they have been in this forum.

We don’t like to see speculation in the discord on price; well this is just as bad.

I don’t think there is confusion about the details (such as the $7mm can be used in any way the treasury wants or that the vesting has a cliff of 1 year and vests on a monthly basis for 12 equal months which is pretty standard).

The main gripe people have with it in no particular order: the timing of it, the size of the sale proposed, the unequal access to it and the capital inefficiency. A bonding curve would solve all these issues.

It could operate something like a simple linear curve $13-$40 with the lockup terms included, available to everyone. Slows the rate at which we sell, means we can sell less than 10% of the treasury and gets us a higher sale price for diversifying our treasury, just off the top of my head why is that not a much fairer and better solution?

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To properly respond @ageless I’d need to see this idea outlined in more detail. Both the economics of it and the logistics (i.e what contracts would be used? What UI? etc.).

But going off a very high level. I think the advantages of your idea would be:

  1. Likely a higher average selling price
  2. Open to anyone to participate

The major disadvantages I see are:

  1. Opportunity cost – this would not give us a large lump sum of capital immediately. This means high opportunity cost as we can put a large lump sum of capital to work right away. We would also have no idea when and how much capital we would get which would make planning difficult.
  2. Arbitrage complexity – this will introduce permanent arbitrage between the open market and the bonding curve. This increase complexity and people will always need to be analyzing what method is most appropriate to acquire POOL in.
  3. Weaker signaling – a protocol selling it’s tokens is a much weaker signal than existing and new investors doubling down on their stakes. We don’t get the benefits of having large institutions invested in the protocol.
  4. Time – this is also opportunity cost but outside of the opportunity cost of not getting the money itself I have no idea what setting up, auditing, implementing, something like this would look like and how much that would distract us.

So yes, I think your high level suggested approach would have some advantages but right now we are going from zero diversification to non-zero diversification. I think in this situation it’s more prudent to prioritize speed and simplicity to get something done and give us a strong foundation for any future projects like this. I think this is the same reason other protocols like LIDO, Badger, Maker, etc. have chosen this same path.

EDIT: Thinking out loud here, I feel we have a tension between wanting some diversification now and also wanting optimum diversification that takes more time. Perhaps we can satisfy this by doing a smaller allocation now. If we reduced this deal to $6 million that would mean 4.61% of total POOL supply and 8% of total treasury instead of the current proposal of 5.38% of total supply and 9.4% of treasury. Also curious what @gabor @frown think of this.


I’ll say no more on the topic after this as I’ve probably been too involved in the discussion. We may just fundamentally have different views on how the treasury should best be managed. Lowering the amount will make me less unhappy but I will still be voting against any tweaks.

For the bonding curve I am not a dev, but I participated in a treasury raise before with DXD where they used a bonding curve that was based on GitHub - C-ORG/whitepaper: The Whitepaper of Continuous Organisations There is audited prior work on this topic. I get that it would take up time resource but if it’s going to save the treasury millions and make it fairer I think it’s worth looking into it at least.

Immediate injection of some working capital and treasury diversification seems useful to me. Having been through a crypto bull run before, I know it can end at any time. Having money that the team can use to hire people, fund bounties, stake in prize pools, or whatever else we can think of seems helpful.

I also hear @ageless on ways this is suboptimal and think they have good points. I think perhaps Leighton’s proposal to shrink this deal is best.

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This open debate is really fruitful and I must stress that I highly appreciate how you @Leighton are taking the concerns of the community seriously and that the different opinions are very much valued.

When reading the proposal, two elements bothered me most:

  1. the discount for a group of 4 investors
  2. the exclusion of community

On the discount, I initially thought that it’s a steal. Taking the low liquidity and all the other arguments from this discussion into consideration, I felt that par or even a premium would be justified, like in public M&A. Over the last couple of days I had several discussions and learnt that this is the way VCs and block trades work right now. The discount is actually considered to be on the lower end, other (shitty) projects offer even more than 50%. But PoolTogether is not one of the “other” projects, there is a reason why we are all here, passionate as we are, and one of it is that PoolTogether is one of the most exciting DeFi projects at least to me personally. If I had 10m USD laying around, I would have placed a bid at 15$, fortunately for the 4 VCs I am not liquid enough. I was thrilled by the idea of assembling a “SwimmerDAO” with anchor investor backing and with a large part being funded by the community, tabling a counter proposal at a higher price. In hindsight it is little surprising that the actual demand from the community is fairly moderate because 1) many already hold a sizeable POOL allocation in their portfolio and 2) most are just not filthy rich (yet!! ;)). My realistic estimate is that the community would very easily throw together USD 250k very fast but definitely not a seven digit sum at least in equal speed as the VC proposal can be executed. Although it is a clear sign of commitment of the community and underpins how much we value PT, by offering to invest more capital, this brings us back to the need for capital managers if we want a rainy day fund.

The more I think about it, the more I see the value beyond just the capital. If the investors are active community participants and not just badge/logo collectors, there is a clear rationale of getting a rainy day fund from a committed group of investors. I would like to see more involvement from people like @delitzer here in the forum and I am convinced that adding investors who open doors where it is relevant really helps. What we should not do is just look at brand names but really measure VCs on 1) their involvement in the project & active governance participation and 2) what they moved within their network outside PT to enable PT grow faster/further.

The exclusion of the community is against anything Ethereum and DeFi stand for. On the flipside, I see the need for an efficient and quick process to not lose too much time and energy on collecting a few couple million dollars. As elaborated above, its unrealistic that the community comes up with something close to the targeted amount. Nevertheless, by just opening up the possibility to the community, exclusion turns into inclusion. And anyone who wants, can participate. I arrived at the result that a DAO would be an overkill and interested community members could just do a 8/10, 12/15, etc multisig wallet, fund it jointly and get their combined USD 250k equivalent amount. One aspect to keep in mind is to avoid arbitrage opportunities for existing POOL hodlers who originally intended to hold long term and make use of the 13$ offer to sell their holdings on market. This could be tackled through a cap of e.g. [10,000] USDC investment. Another important aspect is to consider doing this in a proper way to avoid breach of any regulation etc.

Then, probably almost everyone is happy. Except for community members who are concerned that this percentage of the treasury is too high at this price. In hindsight its always easy to judge but with DOGE soon taking over #3 from BNB (quality-wise I would say it is justified but the overall market cap feels slightly off) I clearly can understand that some people are concerned about the health of the current market and sacrificing ~10% of the treasury could be worth it if we go through another bear market. If things only go in the direction of moon, well, I guess it was a “bad” deal but everyone and most importantly the protocol treasury will be fine. Tweaking the proposed amount somewhat down to a sale of USD 5-6m doesnt move the needle a lot but would make the sacrifice better digestible.

In summary, I believe the PTIP-11 needs to fulfill the below three requirements to hopefully get more broader support:

  1. Injection of sizeable stablecoin amount for rainy days, in a balanced way from treasury management perspective
  2. inclusion of any community member who wants to participate in a well thought through way
  3. ensure that the VCs who from community and POOL holder perspective make a good deal (regardless of how these block trades are agreed in terms of market standards) are committed to contribute to the success of PoolTogether beyond just providing capital

On the last point, I had some thoughts about geographic presence and noticed that its 3 US and 1 Asian VC. Without doubt all four names have a stellar reputation and have in part already proven a strong commitment towards PoolTogether. In my attempt to get anchor funding for SwimmerDAO, I had very long and deep due diligence calls with a European VC. @Leighton was thankfully also available to answer questions and discuss the vision of PoolTogether (nothing new for community members ;)) and already during the call there was initial value add due to a portfolio company that can serve as a cash on-ramp in Europe but hasnt worked on it full steam with PT even though PT and the portfolio company were in touch before. Speeding this up and hopefully getting done was what we won from this due diligence call, which I think is what VC contribution actually should look like. The group of 4 VCs is clearly stellar and already crowded, but I think it would be a good idea to add - if this is welcome by the authors of the proposal as well as the community - a European fund to help expand in a geography that is currently underpenetrated. The community has already thought about how to approach non-English influencers, but getting support from a large tokenholder with long-term interest and regular exposure to media, investors and other builders is something where I see PT can extract value. I would invite the European VC to introduce themselves, just wanted to drop this as I think it would make sense and also add another funding pot in case POOL rises and we want to repeat this exercise at some point in the future.


I appreciate all your comments and perspective. You have true skin in the game and that’s the most important thing.


Considering the 1-year lockup, I think I’ll have to say this is not a bad deal now. I hadn’t realized it earlier. Plus, hopefully those VCs help promote us some more. It’s a big buy.


Hey all,

Thought I would chime in here as @ageless said funds involved, or hoping to get involved, should engage, which is a good point. We, Maven 11, are the EU VC Gabor has been talking to for the last couple of days. Some background; know Gabor as a very active community member in another venture of ours and he reached out to discuss a potential “SwimmerDAO” anchor contribution from us.

While trying to set up the SwimmerDAO we found out that the deal terms offered in this proposal are not that bad compared to what we currently see in the market. We inquired around and there is not a lot of demand for getting in at better terms (for the treasury) then this. However, during these calls, and this is all due to @Leighton and Gabor, we did get more and more excited about PoolTogether. We knew about the project (and think it is one of the best use-cases of eliminating a trusted middleman) but haven’t had the chance to get involved before.

I think Gabor summarizes the three goals of the proposal well so I won’t repeat them. I think we can do 1 and 3. The first requirement speaks for itself. The third might need some more explanation. I think we add value through diversification of the backing group. Us being EU based in itself is not valuable at all, but it does open up a very new and different network. Gabor already alluded to this; we are currently pushing hard to speed up the process at the EU fiat on-ramp (portfolio company of ours). Furthermore, I think the more diversification in the investor base the better (we will be fresh, new DAO members!) as it opens up new networks of portfolio companies (already had some back and forth on this after our call with gabor), TradFi institutions etc. While all of this doesn’t take away the pain point of selling treasury at a low in the market (among other things) I hope it provides a fix to some extent.

Very happy to be here and hope the DAO will allow us onboard :slight_smile:


I agree with others that the most important outcome of this initiative is, as the PTIP title suggests, treasury diversification. Meaning: diversify the assets to ensure protocol development and functioning is sustained in the event of a market downturn.

@Leighton I appreciate you proposing a reduction in the offering to these four funds, though I would ask that we set a target based on “what does the treasury need?”

If there is a budget that shows how $7m can be allocated toward 3 years of anticipated growth / hiring expenses, I am much more sympathetic to supporting this proposal. The more the number feels arbitrary, the less it feels necessary.


This is what I love to see!
A VC pitching themselves by telling us what they can provide for the community, with a specific example.
Ideally, each of the VCs in this deal should make a post introducing themselves and their strengths.

As far as I can tell, the community has 3 main decisions to make (assuming we want to diversify):

  1. Timing of the deal
  2. Size of the deal
  3. Which VCs to sell to

There seems to be a lot of support for a smaller deal now, with another round some time in the future.
If we’re only looking to get, say, $5 million from 5 VCs, we have the opportunity to pick and choose those that provide us the largest benefits.

Let’s find out who that is!


I agree, it would be great to model what amount we need, to have a strong enough “safety net” for a potential bear market.

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I think of this in two ways, productive uses and consumptive uses for the capital:


  • Use USDC to sponsor existing prize pool boosting prizes and yield (current APR 8.65%)
  • Use USDC to yield farm other protocols (easy one would be Barn Bridge 35% APR, we could either hold the BOND tokens or add them to the prizes, many other options like this)
  • Use USDC to diversify into other crypto assets as we desire (i.e. buy ETH)


  • Currently it cost ~$500 per week, per prize pool to pay awarding transaction fees + link. We have 6 prize pools governance is paying for the gas on so that’s $3,000 per week.
  • Audits are a major expense the protocol will need to plan for as it continues to grow. I think budgeting $75,000 per quarter would be a good estimate on that.
  • Outside of that, we can use the the USDC for other purposes (grants, etc.) if we don’t want to liquidate POOL.

This is where opportunity cost comes in. Doing this now lets us put these assets to work immediately and gives us optionality on the consumptive side whenever we want. CC @Torgin


Gonna vote yes on this.