PTIP-24: Revised saving the little fish (phase 1)

Governance PT Improvement Proposals
1

Simple Summary

  • Split the accrued COMP evenly across all winners.
  • Increase the number of weekly prize winners on Dai prize pool from 3 to 5
  • Increase POOL staking APR by ending the POOL pool prize

Motivation

Not enough small depositors are winning prizes. For PoolTogether to scale to the next level of growth (billions AUM / millions in weekly prizes) we have to find a way to get more people winning prizes. Especially people who have smaller deposits (10k or less). This needs to be done while keeping the protocol simple and not driving away the large depositors which create the large prizes.

Specification

This PTIP would do three things:

  1. Increase the number of weekly winners to the following
    Dai Prize Pool: From 3 to 5 winners

  2. Instead of giving all the accrued COMP to the ā€œgrand prizeā€ winner, split the accrued COMP among all winners equally for all prize pools (Dai, USDC, COMP, UNI)

  3. Stop the 200 POOL weekly prize and instead distribute that as increased APR to POOL stakers

Overview

This should be considered phase 1 of Operation Little Fish. This phase uses the levers immediately at the control of governance (i.e. no new solidity code written). It will meaningfully adjust the odds to favor smaller depositors by. Phase 2 is in R&D and will expand on this same goal.

NOTE: the same wallet can win multiple prizes. So large whales will still win many of the prizes but far less of the total prizes than today.

Rationale

PoolTogether is currently a victim of its own success. With over $200 million deposited, $100,000+ in weekly prizes, and prize pool reserves growing things are going better than ever. BUT, deposits into the prize pools have become increasingly dominated by large depositors. Weā€™ve gone from the majority of prizes being won by large depositors to almost all of them being won by large whales. We need more depositors like the person who deposited $73 and won $43,000. The core value proposition of PoolTogether is giving people the chance to get an outsized return on their money without risking it. Having more prizes means the odds of winning increase and this value proposition becomes stronger. PoolTogether becomes more FUN.

The change to the POOL pool to emphasize staking APR over a weekly prize also helps improve returns for POOL hodlers.

There are other methods to achieve this goal that the community has discussed. Specifically the idea of moving the POOL incentive to ā€œsponsoredā€ deposits that are not eligible to win. This idea has merit (Iā€™ve been a proponent of it) but has some key limitations.

  • Adding a second token ā€œdripā€ will increase gas costs for all users (TBD on exactly how much)
  • We will likely still have whales winning all the prizes, the whales will have the same % of total deposits but a smaller deposit in absolute numbers
  • We risk losing a lot of capital in the migration
  • We lose the benefits of having the value propo of ā€œa chance to win + an APRā€ for depositors
  • The value prop of sponsorship becomes solely yield farming which is not competitive for us long term

Ultimately this is the simplest change to immediately and meaningfully help out small depositors. Phase 2 of the operation will expand on this same goal.

Technical Specification

All these changes are simply parameter adjustments. This proposal pushes the limits of the current architecture and prepares us for phase 2.

Status

This proposal was extensively discussed and supported widely here. As such this will go to vote

14 Likes
2

Letā€™s do it! :fish: :fish: :blowfish: :blowfish: :tropical_fish:

3

Repeating my question here since I feel like it may get burried in Discord, but this updated proposal means no changes to the proposal of amount of winners for the USDC pool?

1 Like
4

What about applying diminishing returns on the % chance to win after a certain threshold is passed?

Making up numbers, deposit 25,000 and have a chance of 25%. Each 10,000 after that gives you only 0.1% instead of the usual 1%?

As long as the % chance is being increased, even if just by a little, the depositors are motivated to continue depositing.

5

I think 3 to 5 is a little light. Iā€™d go to 10 both Dai and USDC. Either way I think we need to make this happen as soon as possible.

Edit: What happens to the COMP won by the DAI Pod? Burned, distributed, sold for DAI to pump the payout?

2 Likes
6

Governance can pull COMP from the Dai Pod and liquidate it, or governance can configure an ā€˜asset managerā€™ address that is able to pull the comp.

The idea was that the asset manager could be a smart contract that liquidates the comp and re-deposits it into the Pod to distribute the prizes and give pod users a higher chance to win. Contract isnā€™t written yet, however.

7

Iā€™ve simulated this PTIP and have made one critical adjustment: the Sablier integration we have does not refund cancelled streams. This means that if we cancel the prizes now, we are effectively burning 4400 POOL.

Iā€™ve instead altered the proposal to increase the number of POOL pool winners from 1 to 5 to match the other pools. When the stream ends in September we can close the stream and increase the drip.

On-chain PTIP-24
Snapshot PTIP-24

3 Likes
8

Iā€™m still adamant we should have gone with the original 30 DAI winners as proposed in PTIP-22.
Should have been at least 15 if weā€™re compromising here, that way we scaled back a bit but still testing the viability of the idea.

The proposal was neutered hard. PTIP-22 should have at least gone to a vote (the polling was favorable last I checked). Iā€™m sorry, but going from 3 to 5 winners is not even a compromise. Whatā€™s the point? Little fish wonā€™t feel this at all. If weā€™re just waiting out until V4 because itā€™ll address some of these concerns, then fine, but Iā€™m still bummed out about the direction of PTIP-22/24.

2 Likes
9

I feel ya here. Iā€™m all for feeling this out for a few weeks and submitting another proposal to pump it up to 15 winners for Dai and USDC Pool. Stay tuned.

2 Likes
10

If passed how would this affect the pool PT pool ?

12

The splitting of the COMP among all winners does make quite a big difference. Not as radical as the original proposal but itā€™s worth noting.

As mentioned this was the ā€œphase 1ā€ and I do think getting a clear line of sight on how ā€œphase 2ā€ could be implemented relatively quickly made me feel like the more radical changes were less needed. Also as @Taliskye said we could still do this vote subsequently.

1 Like
13

The only impact of this proposal right now on the POOL pool would be to increase the number of weekly winners from 1 to 5

4 Likes
14

Since this passed when is it going into affect ??!