Thank you for your thoughts Andre. Thanks to Tuna and Atomic as well.
I think you’re absolutely right in that people perceive the token value as a measure of the health of a project. Market cap is really market sentiment, especially when you look at stocks like Rivian that have no revenue. A high POOL token value will give people confidence in the protocol.
A strong POOL token also reflects confidence in the protocol. In our core product. Many people measure the success of a protocol by the total value locked in the protocol. Whether or not this is the right metric is beside the point. Our core product has been losing TVL because we stopped yield farming and the upsides aren’t strong enough to retain them, and the token price reflects that.
PoolTogether V4 now offers strong upsides. There are thousands of prizes. It’s a totally different product and, in fact, I would argue that our narrative worked! The “new PT” vs “old PT” memes were simple and made sense to people. “PoolTogether is now cross-chain”. V4 is doing extremely well; even having been stunted by Ethereum gas prices.
But, while the PT V4 narrative was strong, I agree that our POOL narrative is weak. We have always promoted it as a governance token, even after offering the POOL pool which offers incentives to token holders. Our POOL token narrative is incoherent. My friends and family still ask me “where do I deposit POOL?”. We lack clarity in the narrative and in our POOL token user flows in the app.
This is something I highly respect about Olympus; their tokenomics is a narrative so simple that it’s memetic. Their narrative reinforces their tokenomics, and they’ve created a economic flywheel. Their app is all about OHM, and it’s very clear to the end-user what they need to do.
To me these two things are key:
- Create strong tokenomics & narrative for $POOL
- Have those tokenomics grow our core prize pool product
Our core product, prize savings, is significantly improved through our reserves. Interest from our reserves allows us to increase prizes for the benefit of our users. A very clear goal, then, is to grow our reserves. With a reserve of $50m we will be able to maximize our yield and have sustainable large prizes. We will continue to expand, and we will continue to grow.
Our treasury holds $45m in POOL tokens at the current token price. These tokens do not generate interest for us. We need to convert these tokens into interest-bearing reserves as efficiently as possible.
Growing the Reserve
We need design our POOL tokenomics so that the most beneficial action for a user also benefits the protocol.. I believe this is two pronged: we want to create mechanisms to achieve our goal, but we also need to establish a simple narrative so that users understand what we are trying to achieve. This is our (3, 3).
A user can take three actions with a token:
- Buy it
- Use it
- Sell it
If our protocol goal is to increase the reserve, what mechanisms should we put in place for each user action?
Buying POOL
Users will acquire the token somehow. How can this action benefit the protocol?
Protocol Owned Liquidity
This is a common thread- protocols control their own liquidity. PT would LP in AMMs.
- Users have lower slippage way to access POOL
- PT earns LP fees
- PT is exposed to POOL value upside
Bonds
Our bond program allows users to buy POOL at a discount.
- Users get POOL at a discount
- Purchases add directly to the PT reserve
Using POOL
This is key. What drives the buy pressure? Why would someone buy POOL?
The POOL token:
- Controls the treasury (reserves)
- Controls the protocol (cash flow)
So, in a sense, the POOL token is backed by the reserve and controls cash flow. This is a compelling piece of the narrative.
However, we need to hold the reserves and cash flow for growth. So instead we distribute a promise of future share. Essentially, we distribute POOL to POOL holders.
Note: in a few years ‘minting’ is unlocked and the protocol will be allowed to mint up to 2% of the current POOL supply annually. So this can be sustainable.
Staking POOL
Users should be able to stake their POOL tokens so that:
- They retain control
- They receive upside (POOL tokens)
They could do so through a V4 POOL prize pool or a simple staking contract. Each has their benefits.
This is basically what we’ve done with the POOL pool, but it was never a strong part of our narrative or distinguished in our app. We also need a brand new shiny version of it 
Selling POOL
With a strong narrative our market cap should reflect our current value and potential. This means when a user decides to sell, for whatever reason, they can capture their share of PT through the market cap.
The protocol owned liquidity will support their exit. We’ll be sad to see them go but the protocol will capture LP fees. It also means the existing users will have a larger share of the reserves, which aren’t touched by AMM activity. There is a floor to any bank run.
Summary
A lot of recent thinking has been inspired by Olympus; their protocol-reinforcing tokenomics and simple articulation of it as a memetic narrative is inspirational. I think we can take some concrete cues from them while bolstering our core product.
I would love to hear everyone’s thoughts. I think framing the narrative in terms of the user’s journey of buying, using and selling is extremely useful. We have already implemented some of the mechanisms I describe above, but I think we can do it with better modern tools and by presenting it as a coherent narrative.