[RFC] PTBR 18: PoolTogether <> G9 Software Inc

PTBR 18: PoolTogether <> G9 Software Inc.

Start Date July 1st, 2024
Est. Timeline 6 months

Generation (G9) Software Inc. is a proud service provider to the PoolTogether protocol. In our previous budget request we helped relaunch PoolTogether V5 across major Ethereum L2s.

For this scope of work, we aim to build upon the new V5 deployment with new chains, vaults, partnerships, and marketing campaigns.

Scope of Work

Motivation

We launched PoolTogether V5. Now it’s time to build on it.

PoolTogether is live on Optimism, Base, Arbitrum, and will be deployed to Ethereum by the end of Q2. Each deployment can be permissionlessly extended by anyone.

However, in order for a fully decentralized and permissionless system to grow it must be easy and valuable for anyone to build on. We must continue to develop partnerships, improve tooling for builders, and design incentives such that the protocol is well positioned to grow and operate in perpetuity.

Goals

Our primary goal is protocol growth. We measure growth based on prize pool contributions (PPC) and total unique wallets (TUW). Our current PPC is ~$1000 USD per day, and we have ~1000 active accounts. Our goal is to 10x both of those numbers by the end of Q4 2024.

The prize pool contribution is the amount of Ether contributed to the prize pool in a given timeframe. This is a direct measure of the volume of funds flowing into prizes. For example, our current daily PPC is ~0.38 Ether, or approximately $1000 USD.

We can achieve high PPC with high TVL, high APR, or through other means such as vault boosts. Focusing on PPC allows us to find creative means to improve this metric rather than obsess over TVL.

Total unique wallets is also an important metric for us; it serves as a signal indicating the reach of the protocol. Historically, PoolTogether has had a high number of users with conservative balances of $100-$1000 USD. While it’s not our most important measure, it’s essential for us to track TUW for efforts such as partnerships.

Strategy

We believe we can achieve growth by working on three fronts: incentives, partnerships, and user experience.

Our PoolTogether flywheel thesis is that large prizes will attract deposits, which lead to larger prizes. However, this is a catch-22: we need deposits for prizes, but we need prizes to attract deposits. This tells us that incentives are required to bootstrap the protocol. We must continue to push for incentives and favour partners with incentives whenever possible. Fortunately, prize liquidity is sticky in V5, so even if mercenary capital leaves abruptly the grand prize will take months to disburse.

Strong partnerships are key to a successful protocol. We believe that building relationships with proactive partners will allow us to increase our profile and reach new communities. We can bring these communities more TVL in a fun, gamified package. Partners will unlock new abilities for us.

It’s important to make PoolTogether as easy to use as possible. This is a unique product, and V5 is significantly more powerful than prior versions. We need to lead and showcase what it can do. For users, we need to make our interface as intuitive and fun as possible. For builders we need to make integrations a snap. Simple ideas spread; and the more brain trust we have the stronger we will be.

Milestones and Deliverables

New Chains

We can reach new users, partners, and integrations by deploying to more chains. We will deploy PoolTogether to at least four new chains. We are currently evaluating a number of chains, and will prioritize them based on the potential for growth and partnerships. We need to be opportunistic!

Our short list of chains are:

  • Polygon
  • Gnosis
  • Scroll
  • zkSync
  • Blast
  • Zerion
  • Worldchain
  • Linea

Each new chain deployment will need to be bootstrapped, so we will be creating a separate budget for Ether to bootstrap prizes.

New Yield Sources

We will add at least 4 first-class yield source integrations to the Vault Factory app, allowing anyone to safely and securely spin up new vaults with new yield sources. We will prioritize integrations that we deem to be the most impactful.

We aim to execute on the highest impact partnerships and chains, while also supporting the overall ecosystem efforts (improving developer tooling, and docs, etc).

To achieve this we need to actively seek out and support the most impactful partnerships and new distribution channels.

And we need to make the builder experience as easy as possible; with great documentation, tooling, and playbooks describing what can be done with PoolTogether.

We need to do all this while maximizing the safety of the protocol.

NFT Sweepstakes

We will build a first-class NFT Sweepstakes feature. This feature will allow anyone to give NFT holders a chance to win prizes. Sweepstakes will allow people to use PoolTogether in a whole new way, and offers a rich new surface area to explore in terms of distribution.

We are running marketing campaigns that leverage an early version of sweepstakes with imToken and Exodus.

imToken Campaign Tweet

A first-class implementation will feature the ability to self-serve the integration and be accessible through the Cabana interface.

POOL Staking Improvements

We will create a new staking section of the user interface that highlights the POOL vaults and communicates their unique value proposition. This will educate users on the utility of the POOL token.

The przPOOL vaults are currently being displayed like any other vault; but they operate in a very different way. The behaviour of the POOL vaults needs to be communicated more clearly to the end-user, so that they can see how the vaults behave reflexively to the prize volume. Doing this effectively will have a significant impact on the strength of POOL, as it helps people understand the benefits of staking their POOL

Apply for Grants

In Q2 Generation, in collaboration with Pooltime, submitted a grant application which led to the procurement of 120,000 OP tokens that will be used to incentivize vaults. We also collaborated with Sherlock and won a grant of 75,000 OP to fund an additional security audit. We see many opportunities across ARB, BASE, OP and other chains to secure incentives for the protocol.

We will continue to apply for grants to fund protocol improvements and incentives.

It’s important to note that G9 received grants that came to nearly our last budget. Our goal is to bring in more value for the protocol than we cost.

Co-Marketing Campaigns

G9 will create and ship co-marketing campaigns with each new yield source and chain partner. This will include the creation of marketing content which could include videos, animations, graphics, Mirror articles, Twitter, Farcaster, Lens and Discord posts and more.

Generally we would be collaborating with the Pooltime team on coordinating the public communications like Mirror, Twitter, Farcaster and Discord posts.

We will simultaneously be refining our marketing playbook, so that future teams can learn from our experiences and experiments.

Partnership Experiments

As we are onbarding new chains and yield sources, we will run partnership experiments to ensure we are generating maximum impact with each partner. For each partnership this will include refining our playbook on how engagements are structured, how we manage due-diligence, how we handle co-marketing, what our bootstrapping approach is, in addition to how and when we incentivize vaults.

Building and refining templates and playbooks scale up our ability to launch new on chains, integrate and market new yield sources rapidly and successfully.

PoolTogether Classic

We will design, build and host a simplified interface to PoolTogether, aimed at new blockchain users. The goal of this interface will be to abstract away all the complexity found in Cabana and deliver to users the most simple and clear prize savings experience possible.

We are working with partners to develop integrations to make it easy to zap-in to vaults; these integrations will be useful to app teams outside of G9.

Documentation & Support

G9 will continue to improve the PoolTogether documentation, write tutorials, and provide support for PT builders in Discord.

Open Source SDKs and Development Tools

G9 will build open source SDKs and tools to make development easier. These deliverables will be largely driven by partner and builder needs, so that we can be adaptive about how we can improve tooling.

Hosting & Maintenance

We will also continue to host the Cabana suite of apps along with providing maintenance and making minor improvements. G9 will continue to host the Cabana suite so that builders have a no-code way to interact with vaults.

Budget

Description Cost
Operations $527,000 USD
Chain prize bootstrapping 16 Ether
5 Likes

Long lost active contributor now dedicated lurker here…

For the first half of the year G9 got ~$600k from the PoolTogether protocol by community vote PLUS another ~$500k elsewhere nearly doubling your first half budget, and you still need another ~500k+?

This ~$500k like 1/7 of the treasury. I see the endgame in the crosshairs.

For 2024 we’ll have funded $1.1M to G9 if this goes through… That $1M prize doesn’t quite seem baked in yet to prove that more value in thing, so these are some pretty hefty boat shoes to fill.

But you know what, sure what the hell, fund it. Go out with a bang! Right? Right!?

Biting sarcasm aside…
__

  1. A lot of this resembles marketing. Historically the OG PoolTogether team does not have a great track record of marketing or partnering with the community to do marketing. G9 has faired marginally better, marginally. I’m not sure if we’re going to see the returns here. G9 actively works in the space, you telling me G9 don’t know anyone that can market and BD to a fuller capacity to move the needle?

  2. Is there any proof in the pudding for these random metrics we’re now seeing; PPC and TUW. This feels so WeWork, make the metrics you want to see that are always the green to push the agenda. What did these look like during V4? What did they look like through all the vaults breaking, have we recovered from pre-broken vaults to now patched vaults?

  3. Any alpha on what new yield sources are being considered?

  4. Didn’t G9 say they were going to have a less aggressive budget for the second half?

So yeah idk, I’m just gonna go with the community on this. I don’t got any real fight in me anymore. You win, I can’t keep going with these games, you win, gg fam.

1 Like

Thanks for your comment @Taliskye.

To address a couple of your comments directly:

None of the funds G9 obtained via grants in 2024 will go to G9 or its employees. ($0)

$150,000 went to Sherlock to pay for the recent additional audit which was recently completed.

100% of the 120,000 OP grant we were recently awarded will go directly to users via bonus rewards on LST vaults on Optimism. There is a RETH wrapper that is in audit now, and as soon as it is ready the RETH vault and incentives will go up. The RETH wrapper came as a result of G9’s partnerships work with RocketPool.

I would say that marketing is a small minority of the work here. The majority of our marketing work is related to creating and coordinating content and communications with partners as we launch new chains and yield sources. I would estimate that work will be less than 1/20th of our total team effort over the next 6 months.

Partnerships is a much more significant chunk of the non-techbnical work we do and I think has been particularly effective over the last 6 months. Since January we have secured partnerships with…

• Beefy (still ongoing, more coming as soon as we lauch the ability to zap into vaults)

• Yearn (still ongoing more coming in June/July)

• RocketPool (described above)

• MoonWell (More in the works with the Moonwell team)

• Base (We’re working on activations for onchain summer)

• IMToken (went live last weekend)

• Exodus Wallet (NFT sweepstakes coming soonTm)

And there are other conversations with some of our largest partners that are still in process but I believe will bear fruit.

I was part of helping develop these metrics, so I am happy to speak to this. I did not just pull out some random acronyms. Here’s why they matter:

PPC = Prize Pool Contribution

Focusing on PPC means we are putting our efforts towards integrations and partnerships that contribute the most to prizes. We chose this as a northstar metric because we believe big prizes are ultimately the only thing that can organically sustain the protocol (after incentives end) - so we wanted to make sure we were doing things that get us to bigger prizes, faster.

Happy to speak more on that if its helpful but that is the core of it.

TUW= Total Unique Wallets

Total unique wallets is meaningful because our largest and most impactful partners have explicity told us that they value many small users over a few big users.

For example, Base aims to “bring the next billion users onchain”

and Circle has explicitly stated to us that one of their key northstar metrics is the number of users that have more than 10 USDC in their wallets.

No specifics to share yet, beyond what is above, but we have done extensive research on yield sources on many chains and are choosing partners based on what we think they can contribute in terms of PPC and TUW and also how they can support us in terms of co-marketing and/or incentives. We’re in active talks with a few partners that have not yet been named. Soon TM :slight_smile:

4 Likes

Also wanted to comment on this…

I think we are doing pretty well with business development (shout out @tim !) -as evidenced by all of the partnerships we have in flight, and the inbound interest we have been receiving from potential chain and yield source partners (who are not named above as we’re still in discussions.)

I think that the most cost effective marketing we can do is reaching new audiences through our partners. These campaigns have very low cost, basically just the coordination time with partners, but we get access to large new audiences. A number of our partnerships are still in process (Yearn, Beefy, RocketPool, Moonwell, Exodus) so we are not yet seeing full results but I feel confident that we will be reach many large new audiences in the coming months.

As to whether there is some other organization that could better market PoolTogether, I don’t personally think it is feasible to bring in an outside org for paid marketing for a protocol like PoolTogether. I think it’s more effective to continue improving the product, hence our focus on UI improvements on Cabana and our move to build out a hyper-simple version of PoolTogether for new-to-crypto users)

Circle and Base both have made it clear that they are prioritizing those users as they seek growth, and our strategy has been to make PoolTogether a desirable partner to orgs like them, so that we can benefit from the scale of their audiences. That is why we are currently investing in further improving the UI and creating “PoolTogether classic” which is intended to simplify the PoolTogether experience by stripping it down to 1 or 2 assets, and leveraging new user-friendly tech like account abstraction, paymasters, etc.

3 Likes

I don’t want to take this too far off topic but total unique wallets doesn’t seem like a great metric when noting that pool token has 30,000 holders on optimism, the bulk minting of chance cards event, and the bulk fake user script in a generation software’s GitHub repo.

1 Like

I’m sure you know this is how we run sims on testnets. It’s on that repo’s readme and you’re a competent dev. No need to intentionally misinform.

2 Likes

When we developed these metrics as a way to focus our efforts, many people brought up issues related to people sybil-ing. We are not suggesting incentives be given to users just for having unique wallets.

We simply use Total Unique Wallets as a way to see if we are reaching the users our partners care most about. We also consider TUW as we are deciding who the best partners and yield sources might be.

For example if we have 2 vaults we each think could get to $1m TVL at 5% APR, if we think 1 vault would have 1000 users depositing $1000 and another vault with 100 users depositing 10,000 each, we would lean towards the vault that attracts 1000 users as it would make us more desirable to our most important partners, whose audiences we think can help us achieve our growth goals to get through this bootstrapping period we are in now.

And of course, the script you mention is for running simulations on testnets, and only that. We have no intention, or incentive to juke the stats. (Yes, I did just make a subtle reference to The Wire :joy:)

4 Likes

Of course! I understand the purpose and am not hinting at anything. My goal was to point out that the metric of total unique wallets may need to be reconsidered.

I need to take back the chance cards statement that was based on memory and other people’s comments. I just read today on twitter that all previous ptausdc would be minted one.

Though the comment the holders on optimism and script are just examples of why the TUW metric doesn’t feel quality. I will do a better job expressing facts and context with my comments.

1 Like

With regard to the TUW metric, I’d like to differentiate between two things here:

  1. The value, which I share, that the protocol is closer to achieving its goal when as many people as possible participate.

  2. The metric itself - in this case TUW - meant to measure how well we’re achieving #1.

I believe #1 is critical, and we can iterate all day on #2.

I am strongly aligned with #1. I grant that PPC is PPC, and it will grow the GP no matter where it comes from. But while growing PPC is critical, PT is about more than working smart contracts - it is also about things like financial inclusion and win-win outcomes for everyone. Having one or more ways to measure against those outcomes is valuable.

I agree that TUW is a… squiffy… metric to try to measure #1, and I think it is worth exploring other measurements. But I don’t think it has to be perfect to be useful, so long as it is only used to orient discussions and never used to incentivize user behavior (we can all see the train-wreck that would result).

For instance, if the NFT Sweepstakes brought in ~1000 new, largely non-sybil participants and the “Classic” UI brought in ~50, it would indicate strongly that (PPC being equal), investing more effort in Sweepstakes-style capabilities rather than more direct UI capabilities would best achieve the protocol’s desired outcomes.

3 Likes

Posting my feedback on the Gov Forum here what I wrote in Council for better visibility and discussion :slight_smile:
(I highlighted the more important parts ^^ )

  • Like deploying one more chains, agree with a comment from underethsea that we should look/prioritise to launch where we can get incentives/token airdrop
  • New Yield Sources are very good too! Something nice to have would be a native Uniswap/Velodrome integration instead of needing to go through Beefy, I know, quite a big task but maybe something with the ERC4626 alliance to make it possible
  • No big opinion about the NFT stuff, personally I am just not the biggest NFT fan but I now it can be good to have and there is a big community around NFTs
  • Regarding Documentation & Support, obv support that for next quarter but wanna give big shout out to Ncookie and Midpoint this quarter for the good comms this quarter for example with the Dev Call but generally docs are good too!
  • Regarding Bootsstrapping Prize Pools, how we currently do it and probably plan to continue it, it would be good if we can somehow better highlight how that subsidy translates to more higher prizes and higher % Prize APR would be good, currently Prize %APR is just past prizes but that the Grand Prize is higher that it would be and depositors can win that is not rly displayed, hope I phrased that understandably
3 Likes

Thanks @Alx for the thoughtful and detailed response. Just pulling some top line comments to indicate what I’m referencing below.

This wasn’t made clear in the post so I’ll amend my original post to reflect accurately. As you identified in DMs, even though these grants were not scoped in the prior PTBR, the funding from the PTBR’s allowed for the bandwidth to apply and work on the grants to meet their requirements and reap the reward. There’s 2 ways to interpret that, 1) we’re paying G9 to do work and G9 is utilizing that payment to fund out of scope work to reap some benefit. Or 2) G9 is operating strategically and although the grant work is out of scope of funding, it’s better for the protocol overall and so it was elected to do the grant work. Seems like the later happened and I previously assumed something closer to the former, I’m sorry.

I’d still wager much of the work is Marketing and BD related and the team isn’t as well equipped for that. New Chains, New Yield Sources, Co-Marketing Campaigns - all BD or Marketing work, that’s a lot for one @tim. Tim is putting in work, but if the protocol is in a secure enough place where we’re ready to shutter governance, there should be more robust support for Tim and the Marketing/BD efforts so we can get the biggest bang for our bucks/POOL while governance is still active.

I don’t have a problem with the definitions of the metrics, I have a problem with the lack of foundation, proof that they will get us the results we’re expecting.

What have these metrics done in the past?

  • What did they look like through V5, V5.1, V5.2?
  • Any indication what they did in V4?
  • Are they proving V4 didn’t perform and/or V5 is performing better?

G9 is selling to the community, and we’re not really being shown how these metrics have done to know if they are all they seem to be.

My day job we run into issues with historical data on an aggregate level all the time - but if we’re going to present something to a client, to make a sale, or to the street you take the data you can find and work it out to present the best guess of historical performance. The blockchain is, at it’s most simplistic, a big database, there’s some amount of historical data out there to figure out some of these.

As a closing sentiment, I want to explain why my candor is so skeptical and biting.
As a community what we’ve been sold isn’t always what we get, a small but critical example:

  • PTBR-2: V5 Launch on Optimism, Arbitrum, Ethereum, zkSync and if possible Base
  • PTBR 7: Redefine launch to just Optimism
    – We’ve paid for launch twice and the second time we paid we got a lot less bang for the buck. And it broke.
  • PTBR 15: Relaunching to Optimism, Arbitrum, Base, and Ethereum
    – We’ve now paid for launch a third time and still got less than what was framed in the original PTBR.

I’m happy to see such a robust scope for a 6 month period. But I feel like I’m being sold golden apples again, and I’m going to end up with a bushel of crab apples to make cider with and drink away my sorrows of unmet expectation.

Do I think anyone other than G9 could do this, probably not. Ask anyone worth their salt, V5 is complex, only experts can play in the sandbox. So like many tradfi businesses, we’re stuck with the maker as anyone else is a breaker.

I’ll vote with the community, but my confidence that what’s outlined will come to fruition is low.