[RFC] PTBR-27: Expanding POOL Liquidity / The DeFi Collective

Expanding POOL Liquidity with The DeFi Collective

Start Date January 1st, 2025
Duration of Work 3 months
Budget $150,000

Following the success of the initial grant, The DeFi Collective proposes renewed measures for PoolTogether to contribute to liquidity and enhanced community engagement. This proposal outlines a $150k POOL grant to be deployed across Base, Optimism, and PoolTogether.

As part of the measures, we are introducing the PermaLP initiative: a long-term liquidity approach where funds are permanently allocated into a dedicated multi-sig wallet (permalp.deficollective.eth). This ensures consistent, growing liquidity that remains in place indefinitely, providing stability and confidence for supported protocols.

PoolTogether will be among the first to benefit from this new initiative, with POOL liquidity integrated into PermaLPs.

The DeFi Collective is a non-profit organization, focusing on the enhancement and support of maximally decentralized DeFi protocols across various EVM chains. There is no equity, no shareholders and no profit distribution. The Collective is governed by its members as outlined in our articles of association, publicly accessible here. Operations are overseen by the board members, which act on a non-salaried basis.

The DeFi Collective identifies and self-appoints to support protocols and projects aiming to further decentralization in DeFi. The DeFi Collective does not act as a paid service provider, but rather finances its mission and ongoing operations through the receipt of donations, grants and similar contributions as well as through the active deployment of its proprietary on-chain treasury.

The DeFi Collective also operates DeFiScan, a cutting-edge research framework and analytics dashboard that provides verifiable insights into the decentralization level of EVM-based DeFi protocols. By evaluating protocols on a scale of Stage 0 to Stage 2 of decentralization, DeFiScan helps users understand and assess the maturity and risks associated with DeFi platforms.
For those who haven’t heard yet, Pool Together is Stage 2!! :tada::fire:
Through DeFiScan, we aim to promote transparency, education, and self-policing, empowering users to make informed decisions when engaging with EVM-based DeFi applications.

The DeFi Collective Team Overview

TokenBrice - A prominent figure in DeFi and a cornerstone of The DeFi Collective, he’s known for his pivotal role in shaping the DeFi landscape through his work with leading protocols and his contributions to DeFi governance. Twitter

Nils - With a background in financial engineering, Nils excels in crafting decentralized protocols and enhancing DeFi security. His technical prowess strengthens our mission to advance DeFi’s integrity.

Florian - As our legal and policy expert, Florian leverages his extensive experience in DeFi and traditional finance law to guide our compliance and regulatory strategy, ensuring our initiatives align with legal standards.

Contributors - In addition to our board members, The DeFi Collective is supported by a group of dedicated contributors. These contributors play a vital role in various aspects of our operations, from technical development to community engagement. They bring diverse skills and perspectives, helping to drive the Collective’s initiatives forward.

Scope of Work

Motivation

The DeFi Collective’s mission is to support Genuine DeFi protocols like PoolTogether by ensuring robust liquidity, cross-chain accessibility, and community engagement. With the success of our previous grant deployment, we are motivated to further deepen POOL liquidity, enhance its utility, and contribute to the protocol’s long-term growth and sustainability.

Goal

The DeFi Collective’s fund request offers significant benefits to the PoolTogether ecosystem:

Expanding Existing Pool Support
We aim to contribute to the liquidity of the POOL/ETH pool on Velodrome (Optimism) and the POOL/LUSD pool on Aerodrome (Base). These pools are already supported by The DeFi Collective, and this proposal will enhance their capacity, improve efficiency, and attract additional participants. POOL will be transferred into the permalp.deficollective.eth wallet, a dedicated address used to ensure that support remains permanently available, reducing churn and optimizing long-term support for PoolTogether’s ecosystem.

Expanding Community Engagement:
A portion of the grant will be deposited into PoolTogether’s prize pools and delegated through the “Ants of the Month” program. A monthly donation that fosters community participation and rewards contributors, reinforcing PoolTogether’s reputation as a collaborative and innovative DeFi protocol.

Milestones & Deliverables

Milestones for The DeFi Collective’s Initiative with PoolTogether

Milestone 1: Strategic Liquidity Expansion

  • Goal: Deploy $100,000 in POOL tokens, matched with $100,000 equivalent from The DeFi Collective’s existing proprietary treasury, to strengthen the POOL/ETH pool on Velodrome (Optimism) and the POOL/LUSD pool on Aerodrome (Base).
  • Deliverables: On-chain deployment in the specified pools.
  • Timeline: Completed within two weeks of receiving the grant.

Milestone 2: Enhanced Community Engagement via Delegation

  • Goal: Strengthen the “PoolChad of the Month” initiative by adding $50,000 in POOL tokens to the existing $10,000 allocation. This program continues to recognize and reward active community members who make significant contributions.
  • Deliverables:
    • $50,000 POOL deposited into the mainnet POOL vault on deficollective.eth, and added into the existing rolling delegation of 10 000 PTaUSDC harnessed to reward the Ant of the Month.
    • Monthly delegation of POOL tokens to a selected “PoolChad of the Month,” fostering greater community motivation and engagement.
  • Timeline: Completed within two weeks of receiving the grant.
  • Measurement: The effectiveness of this milestone will be measured by enhanced community engagement, successful monthly delegation of the $50,000 POOL allocation, and strengthened collaboration between The DeFi Collective and PoolTogether.

Milestone 3: Ongoing Reporting and Transparency

  • Goal: Ensure ongoing transparency by publishing Monthly and Annual Treasury Reports on The DeFi Collective’s website, detailing key activities, governance participation, and impact.
  • Deliverables:Regular monthly and annual reports outlining treasury operations, supported initiatives, and program outcomes. Publicly accessible reports available for independent verification.
  • Timeline: Reports are published monthly and annually on an ongoing basis, ensuring consistent and perpetual transparency.
  • Measurement: Consistent publication of monthly and annual reports on time. PermaLP positions can be audited by anyone at any time by looking onchain at permaLP.deficollective.eth. A PermaLP Dune Dashboard has also been developed to facilitate the endeavour.

Timeline

January 2025 - April 2025: Full deployment of the measures, with continuous monitoring and monthly community engagement initiatives.

Budget

The DeFi Collective requests a total of $150,000 in POOL tokens.

Liquidity allocation:

POOL Token Deployment ($100,000):

  • $50,000 in POOL for the POOL/ETH Pool: We will match $50,000 of the POOL tokens with an equivalent $50,000 in ETH from our existing proprietary reserves. This action will be executed on Velodrome protocol on Optimism, with a total of $100,000 in supplied support.
  • $50,000 in POOL for the POOL/LUSD Pool: We will match $50,000 of the POOL tokens with an equivalent $50,000 in LUSD from our existing proprietary reserves. This action will be executed on the Aerodrome protocol on Base, with a total of $100,000 in supplied support. The POOL/LUSD pairing is likely to evolve into POOL/BOLD following BOLD’s launch.
Amount Token
95300 POOL

Assuming a POOL price of $1.05.

The “PoolChad of the Month” initiative:

We request an allocation of $50,000 in POOL tokens, which will remain under the management of PoolTogether. The representative, @TokenBrice, will continue overseeing this initiative to recognize and reward outstanding contributions from The DeFi Collective community.
This program aims to foster a collaborative and innovative spirit by delegating the “PoolChad of the Month” rewards to deserving community members each month, driving engagement, and strengthening ties within the ecosystem.

Amount Token
47700 POOL

Assuming a POOL price of $1.05.

Ecosystem Support Assurance

:rotating_light:As part of our dedication to DeFi’s growth, we maintain a strict policy of not selling any tokens we receive, focusing on their long-term value to the ecosystem.:rotating_light:

Disclaimer

POOL granted to the Collective solely belong to the Collective, are not repayable to PoolTogether and will not be custodied or held in trust by The DeFi Collective. Any rewards generated in implementation of the proposal belong to the Collective and will not be forwarded. The DeFi Collective acts proprietarily within the limitations of its purpose and does not manage assets on behalf of or provides financial advice or other services to third-parties. The DeFi Collective may cease support in case of future regulatory or legal limitations with respect to the proposal, POOL, or else.

4 Likes

Thx DeFi Collective for crafting this proposal and giving PT the opportunity to increase our liquidity by just providing the POOL and matching it with your funds!
I am totally in support of this, more liquidity is always good imo and the POOL are just sitting in the Treasury anyway.

I think the details could be a bit modified maybe to place the liquidity a bit more where we currently don’t have much and will just provide some thoughts in the following:

  • Seperating the funds in a perma LP wallet is great! No extra comments here ^^

  • PoolChad of the month with 50k POOL is a cool idea!
    Some additional info from my side there though, someone needs to custody the funds like with the $10k Ant of the month (which are hold by PoolTime atm), we don’t have a multi delegator for przPOOL so can’t set a representative and would need to call us once per month to change it manually adding a bit overhead, totally doable and no problem, just wanted to mention that. Also would need to choose a chain and the previous Ant of the month inititiave didn’t seem like a super big success.
    I still support it though cause I think it’s a low cost and easy way to like you said it well imo “driving engagement, and strengthening ties within the ecosystem”.
    It’s basically a Giveaway every month and the value is at 10% POOL prize APR and $50k = $5k / 12 = $416 per month, not super much but also not nothing, maybe just need to signal that to people :slight_smile: I’m not a Marketing guy and maybe we just need a bit more cross promotion on Discord/Twitter and a little Retrospective who got the Ant of the month delegation, how much did they win, I will try to dig into the data later a bit myself, small fish winning big via a delegation is always good for a nice story :slight_smile:

Let’s get to the main part of the proposal ^^

  • Big thx to the Defi Collective for offering to use $100k of your funds for POOL liquidity!

  • If we do the proposal as described, I would only like more info about this part here: “The POOL/LUSD pairing is likely to evolve into POOL/BOLD following BOLD’s launch.” What is BOLD? Why will it evolve?

  • Some more info about the Defi Collective amount of VELO and AERO would be cool, how much do you guys have, what is the longer term plan/strategy? Will you keep voting for the POOL Velodrome and Aerodrome LPs? We currently got two nice prize vaults that profit a lot from this and have very good prize APRs, I noticed the Velodrome APR went down quite a bit compared to like 6 months ago or so, haven’t digged into why, if it’s more about growing TVL, lower Velo price or Collective voting less on it. Voting is a big part of the whole Velo/Aero system, so more info here would be great!

Here are some possible modifications:

  • Optimism and Base are not bad but we currently got no liquidity at Scroll and Gnosis and no protocol owned liquidity besides one Uniswap V3 range (at current price). Especially Gnosis is tricky cause we provide incentives there but Across has no route for bridging, so everyone there is just stuck with their POOL, on Scroll people can at least bridge where liquidity is. I think it would be cool if we could reserve some small amount of the funds, like $10k each for Scroll and Gnosis liquidity. Mainnet has decent liquidity but not a full range forever liquidity, only V3 ranges. Using like $30k for Mainnet forever liquidity would be cool as well.

  • I mentioned Across Bridge Liquidity, you guys provided some liquidity there for us before which was very ncie! In a recent proposal PT increased the liquidity there quite a lot with now 280k POOL in protocol owned bridge liquidity which is enough. But long term someone has to custody those funds and with more POOL being staked Gov Treasury is at risk being attacked. Still Across might upgrade in the future and we can’t just burn ownership. I think DeFi Collective might be a good fit for holding those 280k staked Across POOL tokens long term, we don’t have to include it in this proposal here, I just wanted to mention it though.

  • Where should the POOL funds come from? We could look into cleaning up some of the out of range Uniswap V3 ranges, there is one with 98k in POOL which would quite good fit into the amount you request, so instead of requesting that amount as POOL, could also just request the Uniswap NFT.

  • Also, like mentioned last council, DeFi Collective might be interested in holding the PT domain!

TL:DR:
Sorry for bringing up so many topics ^^
Important parts are:

  • More info on BOLD
  • More info on VELO/AERO voting pls, would love to know how long the prize APR on the vaults stay so good! :slight_smile:
  • Some liquidity on Gnosis/Scroll pls
1 Like

Thank you for the feedback!

PoolChad of the Month:
The 50k POOL allocation will remain in the Collective’s wallet (0x6665e62ef6f6db29d5f8191fbac472222c2cc80f), from which we’ll handle delegations directly.

We appreciate your point about signaling and cross-promotion. While the first “PoolChad of the Month” initiative had room for improvement, it still led to meaningful outcomes. For example, Stengarl, one of the past winners, is now our Community Manager, focusing on content creation and communication. A perfect fit for addressing the need for stronger cross-promotion on Discord and Twitter.
To maximize the program’s impact, we’re currently preparing an article showcasing the previous Ants of the Month, their contributions, and the initiative’s outcomes.
This initiative not only fosters engagement but also underscores PoolTogether’s commitment to supporting Genuine DeFi initiatives, rewarding positive behavior, and encouraging active participation, all while aligning with its ethos at a low cost.

BOLD:
BOLD is a cutting-edge stablecoin introduced by Liquity as part of its v2 protocol. It represents a significant advancement in decentralized stablecoin offering a multi-collateralized approach. You can find more information here.

Why evolve the pairing?
The POOL/LUSD pool currently serves as a critical point of liquidity for PoolTogether, but as BOLD launches and gains traction, it presents a compelling opportunity to pivot towards a POOL/BOLD pairing.
Liquity and The DeFi Collective are planning a collaborative liquidity initiative to supercharge BOLD’s presence across Optimism, Base, and Arbitrum. Through this initiative, The DeFi Collective will allocate matched funds and part of its veVELO, veAERO, and veRAM voting power to support BOLD liquidity. By transitioning the POOL/LUSD pool to POOL/BOLD, we can:

  1. Leverage Existing Support: Align with a broader ecosystem push to grow BOLD liquidity, enhancing POOL’s exposure and trading opportunities.
  2. Enhance Liquidity Utility: Increase cross-pool synergies and capitalize on the additional incentives tied to BOLD-related pools.
  3. Strengthen Genuine DeFi Alignment: Support a new stablecoin that adheres to the decentralization principles at the core of The DeFi Collective and PoolTogether’s values.

This transition is planned to coincide with the launch and growth of BOLD, ensuring a smooth migration that maximizes utility for both POOL and BOLD token holders.

Regarding veVELO and veAERO :
Our treasury is fully transparent: 0x6665e62ef6f6db29d5f8191fbac472222c2cc80f.
DeBank.

Regarding our strategy, we are fully committed to the long-term growth of our voting power by locking all AERO and VELO rewards earned. This approach ensures that we can continue to amplify our influence within these ecosystems.
To address your specific question: yes, we have been consistently voting and will continue to vote for the POOL Velodrome and Aerodrome LPs. Supporting these pools remains a core part of our mission, contributing to the strong prize APRs and overall health of the ecosystem.
It’s important to note that APRs can fluctuate significantly depending on the level of deposits. For instance, on Velodrome, our voting allocation has remained consistent, but the increased TVL has naturally led to lower yields.
As for veAERO, the APR has been particularly strong recently due to our substantial vote allocations. This has been driven by two main factors:

  1. an overcapacity on Aerodrome during this period, which will likely decrease with the introduction of BOLD
  2. the inclusion of the LUSD/POOL pool in our strategy for accumulating AERO.

You can view our voting activity and pool contributions here:
https://dune.com/spicypiz/defi-collective-pools-base
https://dune.com/spicypiz/defi-collective-pools
More DeFi Collective dune dashboards :
Impact Overview

Scroll/ Gnosis:
At this time, we don’t have the capacity to positively support liquidity on Scroll and Gnosis. While we recognize the importance of expanding POOL liquidity across chains, our current strategy is focused on optimizing the ecosystems where we can make the most impact, such as Optimism and Base. Should additional resources become available in the future, we would certainly be open to revisiting this idea.

Bridge Liquidity:
Facilitating long-term staked POOL tokens on Across and potentially on other bridges in the future is something we’re open to discussing further. We could explore this concept in a future PTBR proposal to define a structure that aligns with our operational principles and supports the ecosystem effectively.

POOL funds:
While reallocating the 98k in POOL from the out-of-range Uniswap V3 ranges is an option, receiving the POOL tokens directly would simplify our accounting and operations.

As for the PT domain, we’re currently discussing it internally to fully understand the implications for us, particularly on the legal side. We’ll keep you updated as soon as we have more information.

2 Likes

Big thx for the in depth reply!
No further questions! :slight_smile:

Cool to know that BOLD is related to Liquidity V2 and Defi Collective staying up to date with those things and making changes if needed. I just followed a long a bit that whole Maker DAI to USDC transition and this sounds similiar but will dig deeper into it later.

Thx for the info about the VELO/AERO voting as well, will try to dig into that later as well! But good to know the DeFi Collective wants to continue the current strategy and thing I was most interested in was basically already mentioned from you as well “our voting allocation has remained consistent” , thx for doing that, this is flying quite under the radar and most people probably don’t recognize it enough how huge this is imo! :slight_smile:

Totally can understand that you guys wanna focus on Base and Optimism, the other chains we can handle oursevles I think at the moment then, if you ever increase your reach, feel free to include PT as well! :slight_smile:

Same for Bridge Liquidity and PT Domain, but thanks for generally being open to it!

Just to clarify cause you said
“The 50k POOL allocation will remain in the Collective’s wallet (0x6665e62ef6f6db29d5f8191fbac472222c2cc80f), from which we’ll handle delegations directly.”
and the original proposal is
“We request an allocation of $50,000 in POOL tokens, which will remain under the management of PoolTogether.”

Is this a change you wanna make to the proposal? I’m not against that, just should put it into the original post above and make the change clear imo for anyone not checking the comment here.

1 Like

Happy to have answered your questions!

Regarding the clarification: that was an error on my part when drafting the original proposal before fully consulting the treasury team. The correct approach is that the 50k POOL allocation will remain in the Collective’s wallet (0x6665e62ef6f6db29d5f8191fbac472222c2cc80f), from which we will directly handle the delegations. Unfortunately, I cannot edit the initial proposal, but rest assured this change will be reflected in the final proposal.

Thanks again for pointing this out! :pray:

1 Like