Lots of good discussion on this thread! I think @ageless summarized the counter argument well.
My argument is that if the reserve rate is 0% or 50% it is not going to make much, if any, difference to the TLV of that pool. We have empirical evidence of this. Before pooltogether had a token the TLV was what? 1-2mm? and once POOL launches it skyrockets.
This is great point! Looking at the data, the 50% reserve rate went into effect on April 8th. Using the USDC prize pool as a sample we actually saw a pretty dramatic INCREASE in total deposits after April 8th.
This increase in deposits, was despite a decrease in total prize sizes (dropping under 100k per week). However, there was an increase in POOL token price (leading to an increase in effective APR for depositors)
So this data seems to pretty concretely show that right now the primary draw for depositors is the effective APR and the prize size doesn’t make a radical difference.
All the above notwithstanding, I do still think there is an argument to be made that hitting top line prize numbers will accelerate growth. It’s hard to know the impact though until we actually do.
One other important piece of data, thus far, what has really drawn press coverage is not the size of the prizes but rather small depositors winning large prizes. Specifically, our “luckiest” depositor who put in $73 and won $43,000 was covered by press (here and elsewhere).
So I think based on feedback, my current summary is:
- Don’t change reserve rates right now. Wait to see impact of POOL distribution changes. Additionally, if reserve rates are going to be changed it probably needs to be on the thesis that larger prizes drive marketing which drives TVL and not that larger prizes directly drive TVL
- Continue to work on ways to help small depositors win (pods should be a big help here)
- Continue the discussion on more interesting ways to use the proceeds from the reserve