RFC: SWIM POINTS

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Introduction
PoolTogether strives to make saving money fun and rewarding. One way to do this is by having lots of rewards, whether those are explicitly financial or simply fun.

We’ve seen PoolTogether depositors get really excited about receiving NFTs and historically one of the largest drivers of deposits has been fixed token distribution combined with prizes.

In the past, many different tokens have been distributed to depositors, such as OP, CELO, POOL, MATIC, SUSHI. This post outlines the creation of a new SWIM POINTS token that can be distributed to depositors on all networks. The goal is to drive growth and engagement by making the protocol more fun!

SWIM POINTS
The idea of creating a SWIM POINTS token is not new. @McOso originally wrote about it over 1 year ago on the forum. However, there are a few factors that make this moment well suited for SWIM POINTS

  • David, the artist behind Pooly and Pfers has created a new NFT collection which he would like to make redeemable based on protocol usage. $SWIM tokens are the perfect way to make this possible.

  • The “TWAB Rewards” contract makes it simple and permissionless to setup SWIM POINT distributions to all depositors on all networks

  • The $OP Token rewards to depositors are ending in 6 weeks, although not monetarily equal, $SWIM distribution would create a better transition as those rewards end

  • $SWIM would provide a baseline primitive that anyone in the community could build upon (think merch give-aways, discord roles, etc.). It would quantify someones usage of the protocol.

To be clear, the intention is that these tokens would have zero financial value. They would exist to further gamify the experience of using the protocol and being in the community.

Implementation & Suggested Parameters
Technically, implementation of this is completely permissionless and does not need to involve $POOL governance. However, I think it would be ideal to have a social layer agreement (and perhaps even vote) to ratify $SWIM as a community reward token. Here are a few thoughts on initial parameters.

  • Initial mint supply of one billion $SWIM. This ensures people can earn SWIM quickly which is more fun. POOL governance can be empowered to mint more if voted on.

  • “First Season” distribution of ten million, this will allow us to design around a specific distribution number and then adjust for a second season, etc.

  • $SWIM distribution setup on Ethereum, Polygon, and Optimism with distribution rates tailored to drive the most optimum protocol usage. I would look heavily to the finance team to help with thinking through the specific rates and target TVL’s on each chain,

Next Steps
Technically, implementing this is very simple! I’m posting this to draw ideas from the community and feedback on starting parameters. Please post yours below!

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Sounds like just another type of $POOL. I like McOso’s idea more. Stake $POOL get $SWIM. You need $POOL to $SWIM!

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Thanks for the post and for bringing the idea back. I’m very bullish on adding a rewards token to our inventory.

POOL is a governance token (so far) and we should view it through a governance lens. Paying out this sole token as reward and incentive isn’t sustainable and potentially not the right thing. SWIM points change this!

I like that! This could be a good decision to leverage our off-chain governance for.
If we ratify these as a community reward token, will the community have input on its distribution?

As you mention these tokens are a great a baseline primitive for the community to build upon. I’d love to have a framework for how we can tap into those.

The seasons approach sounds great. We could think of having an application process for SWIM point distributions to determine allocations for each upcoming season.

I’m not sure how technically feasible this is, but could these tokens accrue “chain-independent” so you could claim/mint on a chain of your choice?

SWIM points can unlock a variety of cool new aspects, so I’m excited!

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I like the idea! :slight_smile:
Two things that came into my mind, 1. we could use some of the swim points to reward current savers retroactively for their long time deposits and 2. we could use some swim points to reward unlucky savers that haven‘t won in a long time (see here: Pool Together V4). Just throwing out some ideas! :slight_smile:

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Wanted to try to think this through from a Core Values standpoint - both to help me better understand the Core Values, and to assess the proposal.

This idea definitely nails Fun and Engaging, but I have a few questions about how the other values align.

Secure & Accessible to All

My biggest initial concern is around security (general, not technical) and accessibility - specifically for newer users who may be encountering PT as one of their first legit DeFi experiences.

PT’s simplicity and… how should I say… lack of MLM-esque, obfuscated, hyper-farming, gamified, burn-to-earn shenanigans was a big part of its appeal for me. I didn’t feel like someone was trying to con me, and that mattered. Token-juggling gamifications are fun for people who are already in the loop - but the difference between a ponzi scheme, a complex and ultimately exploitative “gamification”, and a fun and innocent community engagement mechanism… it can be hard to tell in the beginning.

If $SWIM is meant to enhance and grow the community, it should be structured in such a way so as not to impede or endanger the newest participants. What would initially differentiate $SWIM from, for instance, spam drops - and not just differentiate, but help educate users as well?

Autonomy, User Owned, & Transparent and Fair

I think last year’s discussions are relevant here about $SWIM management / governance considerations. Agree with @Tjark’s comments in this regard as well.

Further, while it is great to assert $SWIM isn’t meant to have financial value, as currently proposed it probably will (yay autonomy!). And if $SWIM is sanctioned by POOL holders, capable of transferring financial value, and lacking very clear controls… we could find ourselves in a dangerous place. In the best case, this would add meaningful ongoing requirements for POOL holders if it is to be managed well.

I can imagine it getting funkier, though: suppose $SWIM becomes really successful and increasingly recognized as the single most transparent indicator of community engagement. At some point, $SWIM holders might assert that they have proven stake in the protocol and ought (for the sake of fairness) to be included in governance. I suspect untangling this would involve doing things that would be tricky to reconcile across the split demands of autonomy, fairness, and user ownership.

Fun & Engaging

Is there an alternate way to approach $SWIM that would mitigating some of the risks above while still being fun and engaging?

Dumb idea: what if $SWIM was structured to introduce users to new blockchain concepts while being truly non-financial, user opt-in, and fun in novel ways? Say:

  • pseudo-soul bound - it can only be minted or burned, but not traded; no speculation market
  • use dynamic mechanisms (insert trendy “Checks” reference here) so that $SWIM is minted as “droplets” and can be burned to become → puddles → ponds → seas → ocean. Incidentally, I think this makes seasons more interesting, since it makes it possible to achieve “goals” only over multiple seasons of activity (i.e., it might take 3-5 seasons of active participation to be able to mint at the sea or ocean level)
  • enable access to content based on achieved aggregates (droplets gives access to the store, but only pond holders and above can purchase select merch)
  • incorporate into dynamic NFTs (my pfer in a “pond” vs. my pfer in the “sea”)

Anyhow, just thoughts; thanks for reading through!

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Yep! Love those ideas.

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This will be very different from POOL in that the token won’t actually have any control over the protocol. This is an advantage we can leverage by using it more freely.

We definitely could do what you are suggesting (Staking POOL could be one of the mechanisms to get $SWIM). I would argue though that we don’t want it to be the only mechanism. That would be pretty limited in terms of how we can use POOL to gamify interactions with the protocol.

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Thanks for taking the time to explain to me Leighton!

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Yess i love it and thank you

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Great idea to leverage incentives that are not monetary. I have some questions.

To recognize protocol usage we can use Poolers TWAB history from the chain. There are several functions on the ticket contract that enable this. Doesn’t adding a token include unnecessary complexities and costs? I think a NFT can be redeemable based on protocol usage without having an added token.

Example

Pooler qualifies for NFT based on TWAB history, Pooler mints NFT and only pays mint cost

vs

Pooler farms $SWIM paying gas to claim, then has to transfer the $SWIM to redeem NFT, and pays the mint cost.

It seems like it would require a good deal of maintaining. Are TWAB rewards connected to a vault in V5? If so, that’s a lot of campaigns to deal with if the premise of The Hyperstructure is to have a lot of vaults? Whereas we should be able to recognize the usage by simply referencing onchain data.

Who would hold and manage the undistributed token? PT Inc or a team designated by POOL holders? It’s mentioned that POOL holders would control minting but not who custodies the 99% of the token that is minted yet not part of the first season.

If they can be redeemed for things that have value then they have value, no? On the community call it was mentioned that community members could be given $SWIM for contributions. Seems like that’s using it as something that has value if it’s a type of compensation? Im confused on the overall intention in these regards.

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Good questions! I’ll answer the ones I’m capable of answering…

Doesn’t adding a token include unnecessary complexities and costs? I think a NFT can be redeemable based on protocol usage without having an added token.

We initially researched an approach that did not utilize a token and instead worked similar to what you are suggesting. However, as we worked through the use cases that David wanted to support, it became clear that a token would facilitate those use cases better and have the added benefit of being much easier for anyone else to leverage and build around.

Using a token to redeem the NFTs has tradeoffs but generally I still think it’s superior to creating a bespoke solution that isn’t as extensible and (in my opinion) is just less fun.

I think the important thing to remember is that the goal here is to make something that is fun and engaging. It would be less expensive to not give away NFTs at all (no gas costs) but that doesn’t mean it’s better not to do it.

It seems like it would require a good deal of maintaining. Are TWAB rewards connected to a vault in V5?

I don’t have a strong answer to this question right now. My assumption is there will be some form of TWAB rewards with V5 and that it can continue… but I don’t know details or timeline on that. Right now I’m focused on leveraging what we have today.

Who would hold and manage the undistributed token?

I’m open to ideas! I was thinking it would make the most sense for them to go to protocol governance (i.e. the timelock) but that does make future distributions more complicated and I also think we’d want to see a high level of community excitement before that happens. They could also just be managed by a team which would be far more efficient.

If they can be redeemed for things that have value then they have value, no?

I’m not sure what “things” you are referring to here but I’m assuming the NFTs? As there is no plan to make the NFTs capped or limited I don’t think the NFTs will have financial value. There is no plan to make them available or redeemable for anything of financial value. Nor are they designed to have financial value.

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Thank you for this thoughtful response! I’m going to grab a few things I find interesting and relevant.

If $SWIM is meant to enhance and grow the community, it should be structured in such a way so as not to impede or endanger the newest participants. What would initially differentiate $SWIM from, for instance, spam drops - and not just differentiate, but help educate users as well?

This is a very good question! My initial thought is two fold. 1) the language, marketing, etc. around it would have to be super clear about what the token is and what it represents. 2) Ideally having an explicit non-financial use case for it up-front would also make that clear.

And if $SWIM is sanctioned by POOL holders, capable of transferring financial value, and lacking very clear controls… we could find ourselves in a dangerous place.

This is also a good point and good argument for why SWIM shouldn’t be sanctioned by POOL holders at all. It could be better to just have it as an extension built on top of the protocol… definitely open to this model if others have the same concern. Of course we could also let POOL holders vote on that which might be the best path.

  • use dynamic mechanisms (insert trendy “Checks” reference here) so that $SWIM is minted as “droplets” and can be burned to become → puddles → ponds → seas → ocean. Incidentally, I think this makes seasons more interesting, since it makes it possible to achieve “goals” only over multiple seasons of activity (i.e., it might take 3-5 seasons of active participation to be able to mint at the sea or ocean level)

I really like this idea! But I’m trying to think about how that reconciles with your other feedback points. How would utilizing this mechanism alleviate your concerns vs. the SWIM points idea?

I think having more insight on question above will help me keep this discussion going!

Thanks again for the input.

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My 1st “tldr” for $SWIM.

$POOL - Contributor to Protocol. aka Governance
$GIVE - Community to contributor. aka Recognition
$SWIM - Contributor to Ecosystem. aka Rewards/Points

Would this make sense? If not what can be improved?

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I wouldn’t put $GIVE or $SWIM in the same category as POOL. POOL is the governance token of the protocol it has real power. $GIVE is simply an internal accounting mechanism used that ultimately resolves back to POOL.

$SWIM would be more like a loyalty token. Something fun to play around with but not at the same level as POOL.

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Agreed! Def not in the same categories! Thank you for clarification.

tldr v2 / :trophy: = Power Level

$POOL - Protocol Governance. :trophy::trophy::trophy:
$GIVE - Internal Accounting. :trophy::trophy:
$SWIM - Loyalty Rewards. :trophy:

getting closer?

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I think you’re generally thinking in a right direction. One thing to consider is that POOL and SWIM are (will be) tokens and fully on-chain. GIVE isn’t a token and lives off-chain.
POOL is controlled by governance. SWIM will potentially be not. GIVE is mostly fictional and controlled by no one. GIVE only exists in the Coordinape app (and can be named whatever the circle admin wants it to be).

Thinking more about SWIM. From my understanding these points will exist on all chains

I’m not sure how the TWAB Rewards contract can work multi-chain. Would ERC-5164 allow us to accrue SWIM on chain A and mint on chain B?

If not - could a dedicated bridge be implemented into the Poolers UI to allow burning/minting SWIM?
This might be one production step ahead but I feel the multichain aspect needs a lot of thought.

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If I didn’t know what “GIVE” was by now then I shouldn’t be here at all haha

no seriously you always give me the most in depth information and provide resources to continue learning and I do appreciate that. :muscle:

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I had a few more thoughts and wanted to share them publicly so they don’t get lost.
If we decide to take this project on we should go full circle and make sure the core team, the Poolers team and the community are pulling through this together.

With yields so low SWIM points might become a better way of rewarding people than delegations can be.

SWIM points can also be a way for our social layer to get closer to our protocol layer.

Often community members are very engaged because of PoolTogether’s strong set of values but only have limited funds to use the protocol. Through different methods of distribution we can bridge this gap and help them to identify with the protocol and brand.

Distribution Methods

Apart from using the protocol’s TWAB Rewards, we should bear in mind other methods when designing the incentive system and token economics.

Quests

Scope can include things like

  • Refer a podcast guest
  • Author an article about PoolTogether
  • Create a POAP design
  • Literally endless…

Airdrops

Distributing SWIM points to other communities in an airdrop style scenario could be a great way to get them excited about PoolTogether. First thought would be Doodles, but we should also think about retroactively rewarding holders of the Pooly NFTs!

Advancement in the Community

Contributors could get allocations based on their involvement and time in our community. Feels cool to upgrade your Pooler after you’ve been a Pooler for a year or reached certain milestones.

Redemption Methods

Auctions

Bid on delegation boosts, physical items (sponsored?), …

eg. weekly

  • 10x $20,000 delegations
  • Interface allows to put in bids
  • 10 highest bidders at auction end get boosted until next auction expires

Storefront

Store to redeem NFTs

  • Open Editions by handpicked artists
  • Membership NFTs (Bankless, Defiant, Nansen, …)
  • Potentially allow (registered) artists to upload their creations?

It feels important to be open minded to what SWIM points can be before limiting ourselves by manifesting what SWIM points are. Let’s go - I’m excited!

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Another important thing worth highlighting is that we should make sure the NFT “pricing” is controllable in a way. Maybe in seasons.
The more SWIM points are distributed the more it can make sense to be flexible here. Did you have any thoughts on that yet @McOso?

A question specific to the Poolers NFT: In my understanding there will be a base NFT and traits on top of it. Can a user mint more than one base NFT or is / can it be limited?

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Yeah there has been discussion about having flexibility with with Poolers mint and trait roll pricing. Nothing is locked in yet, but yeah I’m thinking something similar where we can adjust the swim points needed to mint and roll traits.

The latest discussions have been players can mint any many Poolers as they want, roll traits as much as they want, and burn “Set Free” their Poolers.

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