PoolTogether

Ruler partnership (Phase 1)[Cancelled- See revised proposal]

I see a really great opportunity here for Pooltogether to make a power move and purchase a significant amount of Ruler tokens in order to have some voting power in this up and coming lending protocol. Phase 1 of my plan involves an investment from Pooltogether. Phase 2 is where further collaboration/partnership comes into play. There is some financial risk in doing a purchase like this but as Ruler is a well developed and established protocol with a strong team the reward could be astronomical to the Pooltogether community. Once purchased we can stake our Ruler for a 74% return and have significant voting power.

Phase 1-Investment
My proposed phase 1 would involve Pooltogether committing 250K USDC from treasury to purchase Ruler tokens. There are 2 ways we could do this. Option A: Buying the tokens on the open market using a multi-sig. This option might be tricky but I do like the idea of doing this without drawing from the Ruler treasury. Option B: Negotiating a token purchase with the Ruler community from their treasury. I believe we can get the votes to pass such a thing on the Ruler side.

Phase 2- Collaboration

  • POOL as collateral type on Ruler
  • Ruler as a yield source to create a Ruler pool on Pooltogether.
  • Potential future token swap to reward governance participants of both communities via airdrop(just another idea, not an important component of this proposal).

What is Ruler Protocol?
Ruler protocol is a lending platform with a different take on lending. Unlike Maker and other lending protocols there are no liquidations. The loans are a set time frame and essentially missing your payment date is the equivalent of being liquidated. If the market were to drop 50% then a borrower could intentionally default on there loan as their borrowed DAI would be worth more than the collateral. Pay your loan on time and never fear liquidation.

The Ruler team is the same team as Cover protocol which is an insurance platform. Ruler launched with an airdrop on March 3rd at which point the market was valuing it at 2.5B, it has come down a ton since then but seems to have bottomed out and considering how well developed the app is, I consider it to be severely undervalued.

Some Ruler Stats:
Market Cap: $2,650,560
Max supply: 1,000,000 Ruler (Technically 998,400 as 1600 tokens have been burned)
Circulating supply: 183,141 Ruler
Ruler TVL: 16.5MM
Current Ruler staking APY: 74.37%

Check out the app to see for yourself: https://app.rulerprotocol.com

Just an idea at this point and we as a community can shape how this goes. Let me know what you think in my poll or in the comments below!

Would you support phase 1 of this proposal (Purchasing 250K of Ruler tokens)?
  • Yes
  • No
  • Undecided

0 voters

Sounds like a waste of money, honestly. Don’t think this is the ideal time to make such investments, either. Just my opinion though.

1 Like

I don’t think we should be speculating with the treasury.

2 Likes

I agree with the above posts that investing part of the treasury in a very speculative asset is not in our best interest at this point in time.

However, I was interested in taking a closer look at how the protocol worked and I honestly don’t see a major advantage over MakerDAO. It’s basically offers you the choice of a deferred liquidation rather than one at an arbitrary time. Either you choose to potentially lose your collateral during your loan (MakerDAO) or at the end of your loan (RULER). It seems like the protocol can only properly work for hypercollateralized positions (e.g. >300% like in their examples), because I cannot imagine many people are willing to loan you money if the risk on a default is high (unless you can sway them with earning lots of interest). Furthermore, for hypercollateralized positions, you might as well go with a MakerDAO vault because neither is likely to get liquidated.

As far as the proposed investment options go, in the last month, there was only one day where the volume traded per day was more than 250k, so it seems that an on-chain buy of the token would need to be spread out over a significant amount of time or we’d influence the price significantly.

Maybe I was shooting a bit high. I do think a partnership with Ruler could be very beneficial and buying a stake would be a good first step. It is a different take on loans than maker and other platforms. I’m wondering what you guys would think about lowering from 250K to 75-100K? I see it as buying voting rights and pulling in a development team to work with us. Pool as collateral and a Ruler pool would be great and it doesn’t have to cost us 250K, we could go alot lower. Let me know if that would change your opinions at all. @Brendan @drcpu @Andre @Vpool
I also believe from chats on their discord that they would like to work with us.

1 Like

See revised version

Closing