It’s been exactly 3 weeks since POOL distribution began and we’ve seen great growth both in the community and the protocol. We’ve hit a long held goal of having $100,000 weekly no loss prizes (with a total of $234,000 distributed last week alone), total AUM has been hovering at $100 million and we’ve had our first successful governance proposal!
Outside of the metrics, the “community pools” launch and the “prize pool builder” has opened the protocol to work with any token and yield source. PoolTogether is now truly positioned to be a no loss gamification layer on top of all DeFi.
Now that the initial launch period has stabilized, it’s time to reach the next milestone, I’d propose the next milestone of $1 billion in total deposited value (up from $95 million today). I think it’s realistic for us to reach that in the next 1-3 months by focusing on a few high leverage and simple activities.
1. New Assets for Governance Prize Pools
The simplest way to increase AUM is to add new asset prize pools and incentives them with POOL distribution. Three weeks ago we had no idea how well this would work but now we have some hard data to review.
We’ve seen both the power and limits of incentiving deposits with POOL distribution. It’s led to a huge uptick in total deposits but there has been quite a large variance between total amount deposited and how much POOL is being distributed (see a snapshot of how it currently breaks down here). It also seems for the existing assets supported, we’ve hit an equilibrium where absent changes, we should not expect major increases in new deposits.
Action Items: Leaving aside adjustments to current distributions, I would advocate immediately voting on wBTC & Tether prize pools powered by compound yield source. These two prize pools are already deployed as community pools so it’s simply a matter of having a vote to put some POOL distribution to them. Anyone other asset that Compound supports would also be trivially easy to add.
2. New Yield Sources for prize pools
A huge untapped area for growth is including new sources of yield. Historically PoolTogether has ONLY used Compound for yield but now integrations with Aave, xSushi, mUSD, yearn, and Rari are in the works. Hopefully many more!
These new yield sources will 1) offer new assets for prize pools 2) in same cases offer higher returns on already supported assets, and 3) bring incentive alignment between yield sources and PoolTogether. PoolTogether drives meaningful amounts of supply side deposits to yield sources. So yield protocols should be competing to offer the best returns and also to promote their integrations with PoolTogether. PoolTogether governance will play an important role in ensuring security of yield sources and also distributing POOL to the ones that provide the best returns to depositors.
Action items: Get the new yield sources integrated! As mentioned, Aave and xSushi are being actively worked right now. Discussions with yearn, Rari, and mUSD are also underway. There are lots more to work on!
3. Lower gas, new interfaces, options for small fish
Gas is a huge issue! I’m lumping a few things together here because they are related. We basically need to provide 1) ways to deposit that use less gas and 2) ways to increase your odds of winning and these ideally should be done through new interfaces built on the protocol.
This is already happening with yearn building the PoolTogether strategy and also with Kames work on the “poolpower” pod. Both of these options are on L1, we’re going to need layer 2 solutions to this as well. Getting this out asap is essential.
Action item: support those already working on this and potentially create new bounties or other incentives for other to start. Also start working on L2 integrations.
4. New prize strategies
Right now prize strategies are mostly binary, you either win or you don’t. There has always been a lot of demand for different prize allocations. Everything from having a % go to a charity to having a % of fixed interest return (this was the idea @Torgin had for the Kokoon pool) to having winners chosen based on simply being deposited and not the amount of the deposit.
Experimenting here should widen the audience the protocol appeals to. There are likely many people who won’t deposit into PoolTogether today but they would deposit into a prize pool that offered a guaranteed return PLUS a prize.
Action items: Identify prize strategies that have the biggest impact and are simplest to implement. In my mind, a simple modification enabling a prize strategy to send an arbitrary amount of interest to an arbitrary address would be a great place to start.
I’ve tried to place these in order from what is most actionable and also highest leverage. I’d love to move on the first item this week and see major progress on item 2 & 3 this month. I believe by making these changes aggressively we can quickly reach $1 billion in deposited funds.