RFC: Freeze POOL spending to contributors and replace with USDC

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RFC: Freeze POOL spending to contributors and replace with USDC

Summary

I am proposing that in the next set of TBR’s we begin a freeze on POOL spending to contributors and replace that portion of compensation with USDC. This freeze of POOL spending should last at least 6 months at which point we can assess how best to utilize our treasury POOL going forward. This will ensure that contributors who have bills to pay are not putting any negative pressure on the token which can affect the growth of the protocol. The option is always there for contributors to buy POOL on a dex with their USDC compensation should they choose.

Motivation

With Hyperstructure right around the corner we will be shifting to a new version of Pooltogether that has added utility for the POOL token. All yield accrued from Pooltogether pools will be liquidated to POOL and that POOL will be awarded as the prize. It is important that the POOL being awarded as a prize is viewed as an appreciating asset that users have a strong desire to hold onto and participate in the protocol. The new version of Pooltogether directly correlates protocol usage to token growth and if the economics of that are handled well then we will see the biggest growth in TVL since the POOL token launched and we peaked around 200MM in TVL.

Since we intend to be a permissionless protocol that does not charge fees we do not have any incoming revenues to cover future costs, we do however have approximately 5MM POOL tokens owned by the treasury(rough estimate, considering POOL locked in LP’s and alternate addresses). Providing POOL compensation to contributors can not only add sell pressure that counteracts the growth of Hyperstructure but we are also centralizing control of the protocol to a handful of people to some extent. We need to change the narrative and place our bets on ourselves that POOL token is undervalued and desirable prize that everyone will want to deposit assets in order to win. If the POOL token is growing it will help to almost guarantee organic and possibly rapid growth of the protocol as we begin to choke the supply of POOL.

With roughly $2.2MM in stablecoin assets at the rate we are spending we likely have at most 1 ½ -2 years of runway to cover our current cost and replacing POOL compensation with USDC will have a slight impact to that timeline. However, if we can get POOL moving in the right direction then we will ultimately secure more value at a lesser cost to the treasury in the long run which could potentially increase that runway big time.

TBR Analysis shows 140,000 POOL being paid per quarter.

Pooltogether treasury holdings.

https://zapper.xyz/account/0x42cd8312d2bce04277dd5161832460e95b24262e?tab=portfolio

Process:
I don’t believe this requires any formal vote as it would be an operational change in how Pooltogether Budget Requests are submitted and could be adhered to by the council if the community and contributors are in favor.

Do you support freezing POOL spending to coincide with launch of Hyperstructure?
  • Yes
  • No
0 voters
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POOL is ridiculously undervalued. Not sure giving it away as if it was worth $1 is a great idea as long as we have other assets (such as USDC) to offer.

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Thanks for the write-up Tuna! I think the idea is worth further discussion. Let’s see if we can carve out some time in the next Council call.

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Hey folks!

This past Tuesday, the Council of teams discussed the idea of freezing POOL spending.

The overriding concern was that people receiving POOL are just dumping it, rather than holding it and being aligned with the protocol.

We decided that it would be simplest to allow people to elect to be compensated in POOL. This means they could choose any combination of stables and POOL.

The reasoning is that if a contributor is going to dump the POOL, then they can just choose to receive only stables instead. If a contributor wants POOL because they are bullish PT, then they can elect to receive POOL to hold.

This actually ties in nicely to our revisions of the Budget Request process, in that we’re making it more flexible in many dimensions.

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