RFC: New vault with charitable component

TLDR I propose we use the OP in treasury to incentive a new Aave USDC vault on Optimism. 33.3% of this vault’s yield would be directed to a good cause.

With PoolTogether we want everyone to win and nobody to lose. I believe we can innovate on the current protocol to create opportunities where more parties can benefit, while also increasing awareness of the protocol.

Current focus
Depositors and PoolTogether win

Potential
Depositors, PoolTogether, and a good cause win, while Web3 benefits by fostering the narrative that it can be a force for good.

stEth.win
In September of 2022 we deployed an altruistic project called steth.win. To date the project has donated 3.85 ETH ($14,630) to good causes. Participants also won 3.85 ETH. Nobody has lost. While we did not achieve all the growth we hoped for, we can leverage our learnings into a similar concept with PoolTogether V5.

In case you haven’t heard of stETH.win before, you can learn more here:

https://x.com/PoolTogether_/status/1641826761741594626
https://pooltogether.mirror.xyz/PpRMyr3kFjbzM-D8xr0QfCln7gnOvpeddRph3N2sTVE
https://pooltogether.mirror.xyz/8fpw3oScPRqb6Nx_8n5l8sgFx-x34_sVzcs-cJ0m97g

The concept has already achieved great verification:

https://x.com/mikedemarais/status/1594738319212044289
https://x.com/DeFi_Dad/status/1666496869789229070
https://x.com/WaterAidAmerica/status/1641856086704570368
https://x.com/WaterAidAmerica/status/1678086646095331331
https://x.com/TheGivingBlock/status/1641828000441200643
https://x.com/TheGivingBlock/status/1677341288616673283
https://x.com/DefiLlama/status/1651981507815170049

Issues with steth.win

  • Untrusted .win domain
  • No support from Lido
  • stETH falling out of favor with the ETH community
  • Ethereum gas
  • Lack of incentives and clear reason for depositors to participate
  • Limited prize structure
  • Too high of a prize split (50%)

All of these issues can be addressed with a new program on Optimism with OP rewards

  • The vault can be listed on Cabana and Pooltime
  • Support from Optimism and potentially Circle
  • Use native USDC and Aave for the yield source
  • Deploy on Optimism so anyone can participate without worrying about gas
  • Use OP tokens to incentivize deposits
  • The V5 prize pool has a much more dynamic and daily prize delivery
  • Use 33.3% prize split instead of 50%

A new vault
Treasury has 87,982.847 OP (current value $217k)held by the executive team. With the retirement of the executive team we need a plan for these tokens. These tokens came from Aave incentives that V4 depositors generated. Note that OP token can only be on Optimism.

Using the performance of the current Aave USDC vault we can create a reasonable deposit goal.

$217k in OP @ ~ 10% OP rewards = ~$2m TVL for one year

With this goal the vault would increase the TVL on Optimism by 53%.

With $2m in TVL the vault will contribute $113k (2m * .086 * .66) to the prize pool and donate $57k (2m * .086*.33) to a good cause.

Incentive schedule
Linear distribution over 1 year (7,331 OP per month)

Claiming rewards in 1 month epochs

1 year fully deployed so that the rewards are easy to message and attractive for savers

PoolTime is offering to create a new app for this specific project in Q3.

Cause
Vault depositors can choose the charitable cause via Snapshot or the community can decide. With steth.win we chose Feed The Children and WaterAid. The Giving Block has thousands of projects to choose from https://thegivingblock.com/donate/?tx_tags=crypto. With USDC it will be easy to find someone to take donations and we can be very open to finding the right cause.

What’s next
Do you have other ideas of how to use the OP or how to improve on this idea? Please share. This proposal can be executed by snapshot vote if we can come to consensus on using the OP for this initiative.

  • I’m all for it, lets go!
  • I’m against this and here is why
  • I have some questions before deciding
0 voters
8 Likes

Bring it on :trophy::sparkles:
Let’s show what else PoolTogether can do

4 Likes

I love this idea, and believe it is worth pursuing. I do have a few thoughts/questions:

  1. This feels like a strong opportunity to partner with public goods actors - if PoolTime pursues this, I believe it could generate greater buy-in/traction if done as part of an educational or marketing campaign coordinated with one or more recipient/distribution partners.

  2. The values are large - rather than a single-shot initiative that we hope works, running a pilot with smaller values and smaller goals might help clarify the best way forward without committing the entire OP reserve. It would also create room to potentially coordinate with multiple partners.

  3. Deciding who to give to could become a, um, considerable bike-shedding experience. Having a clear plan in advance could help mitigate this. Everything else being equal, if I have to vote (which I’d avoid if I could), I’d rather vote directly with my deposit.

Thanks for putting this together - I want to reiterate I think this is a brilliant use case, and worth doing!

4 Likes

Yes! We have had contact with The Giving Block before (see tweets above). And I think we all agree this vibes well with Optimism generally. I think there is a lot of opportunity here.

I feel pretty strongly with the long timeline that this is not that big of a value. I think focus is important to do something meaningful here. From my perspective the DAO has been sitting on these incentives generated by users deposits for a long time and it would be good to get them in a TWAB rewards contract flowing back to users, removing the need for multisig custody. If there is an alternative distribution proposed I think we should consider it! But I don’t want to pass a vote here and only be testing the waters with a portion of the tokens.

Yes sorry if this wasn’t clear but if there was a Snapshot it would be based on vault tokens/twab. Not POOL. We were also discussing the possibility of having a few options for users to choose from when they deposit. This could be different vaults or perhaps some other contract/hook solution.

Ultimately theres a lot we can do here, but I think something simple and incentivized for long-term participants will give us a strong foundation to build on.

2 Likes

I’m all for this initiative!

Like others have mentioned before, there are many ways to use PTv5 for charitable purposes:

  • custom vaults with a portion of yield to charity like this
  • prize hooks that you set to donate wins under $x to a charity of your choice
  • prize hooks that donate a % of every win to charity automatically
  • and probably many more

I am not sure which of these is most effective, but that’s a question for another time. With this proposal, it sounds like you’re answering the question of: “what can we do with this extra OP?” And I think that running a charitable vault with it is a great solution for the following reasons:

  • it incentivizes more deposits
  • helps grow the GP
  • and of course, provides value to a charity!

I think there will be a couple indicators of success here:

  1. Will there be enough deposits to bring the bonus reward APR down to a similar level of the non-charity counterpart? (ex. if there ends up being 8% bonus reward APR on the charityUSDC vault and 11% bonus reward APR on the other przUSDC vault, it may indicate that there was more demand to participate in a vault for charity than there was in a traditional vault)
  2. How much $ will be given to charity compared to OP $ given out through bonus rewards? It is unlikely that the donations will exceed the OP drip, but it will be interesting to see the comparison. Since this is essentially a 33% | 66% split between incentivizing charitable participation and pooltogether participation, will the final donated value match or exceed 33% of the total OP value dripped to supporters?

The charity voting might get a little complicated and I’m not sure what the exact plan is, but I imagine the simplest path forward would be to hold a vote once before deployment and then stick with it for the entire duration.

Finally, I would just like to comment that steth.win always felt a little inaccessible to me personally. This is mainly due to it being on mainnet, which I don’t usually use for gas cost reasons, but it also felt like a bigger commitment since I would have to use a new site with a new system of checking for prizes and results. This is why I’m very optimistic about this charity vault being compatible with existing interfaces. Although a dedicated interface will be nice to see dontation statistics, I think it’s a huge unlock to be able to add this to sites like pooltime and cabana with an extra tag or special description explaining how it differs. The core experience stays exactly the same!

LFG

5 Likes

This would be pretty awesome imo.

Fully on board with however this plays out.

1 Like