The V4 PoolTogether protocol is designed to be a true network that can scale across blockchains, yield sources, and tokens without fragmenting capital. This is an incredibly powerful thing! The end state is a prize savings network that is available on every EVM blockchain, with every yield source and every token integrated (assuming governance approves them).
However, today, the V4 PoolTogether protocol is only available with USDC using Aave for yield on Polygon and Ethereum. A lot of work needs to be done to expand!
This posts explains how the protocol can expand and what needs to be considered when expanding.
First off, any expansion decision will ultimately be up to POOL token holders. Votes will be conducted on any new blockchains deployed, new yield sources added or new tokens supported.
For purposes of this post, assume POOL holders vote in favor of expansion, what are the other considerations?
If our goal is to grow the protocol as fast as possible, we should be looking for the ways to expand that generate the most new deposits and new users while requiring the least amount of work.
For example, it likely that expanding the network onto Avalanche would likely generate more new deposits than adding an option to deposit with Dai on Polygon. Why? Because the network is already available on Polygon with USDC, so just adding Dai is a relatively smaller improvement than making the network available on a whole new blockchain.
An additional factor to consider here is also any incentives that might be offered. For example, if MakerDAO offered $1 million in bonus Dai incentives for PoolTogether to add the network, then it would become more worthwhile.
There are three main scaling options:
- New blockchains
- New deposit tokens
- New yield sources
The simplest way to scale is to add new blockchains while keeping the same deposit token and the same yield source. Right now the protocol supports USDC for deposit token and Aave for yield. That means the simplest scaling option is adding more blockchains that have Aave deployed with USDC. This is simple because it does not require auditing a new yield source integration (keeps risk very low) and keeping the deposit token the same means prizes can be distributed in a uniform token.
Right now, the only blockchain Aave is on that PoolTogether is not is Avalanche. Some blockchains (like CELO) have a fork of Aave V2 which matches the technical requirement but forks needed to be evaluated for overall safety. In addition, there are a few other dependencies for the protocol to deploy. Specifically:
- A “bridge” to Ethereum making it possible to transfer assets
- Gnosis Safe making it possible for secure multi-signature wallets
- Support for the Subgraph and Defender are nice to have
Given the above considerations, our most likely scaling path will be to:
- Add all blockchains Aave supports with USDC
- Begin adding more yield sources using USDC
- Begin adding more tokens than just USDC
Right now, the blockchain most easily added is Avalanche with Arbitrum and Celo the most likely next best options.