Snapshot Debate: Creating Fair Pool

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Orginal can be viewed here, https://snapshot.page/#/pooltogether/proposal/QmdYoQ8LYitwg4DiWN1dgujNHodrxxp7jWcqbg6XZc9VBb

This proposal is to create two pools,

  • Free for all
  • Capped tickets per address

Free For All

The free for all is within the current scope and requires no changes as it’s the current state of PoolTogether

Capped Ticket Per Address

Limited tickets based on a fixed number per address to create a fair pool where smaller bag holders can have a chance to win.

Why this is a good thing

The case of the small bag holder

Currently, smaller bag holders see addresses with 200K deposited and see their odds of winning are 1 in 7.38 (at the current rate), they think Pool Together is a good idea, but their 100 DAI only has a 1 in 4,224.75 … why even waste the gas…

They overlook the project and put their funds somewhere else…

Creating a fairer pool makes smaller bag holders feel like they have a chance to win, and thus increases the exposure of PoolTogeher and positive emotion for smaller bag holders.

Why is the current model bad?

Currently, donating tokens is being viewed as a marketing tactic for services, people, artists, DAO, token creators, etc.

However, they’re merely marketing to whales who don’t need the money anyway… and likely have a good research arm. Whales aren’t hurting in terms of finding gems.

Small bag holders are, and projects that have a HARD time attracting small bag holders.

The above-mentioned donators ARE overlook PoolTogether, as they think it’s merely a way for whales to win some loot.

Therefore, it’s not something they’ll want to be active in. Less donates… less lot… less unity. Fewer reasons to put your money here.

What would the limited Pool look like?

  • Capped ticket per address
  • 2-5 winners per week
  • token holders donate based on the pool they wish to fund

Downsides?

  • Couldn’t anyone create an unlimited number of addresses and just enter that way?

Sure, but they’ll be wasting a lot of gas and providing fee’s to Pooltogther…

  • Two pools, means one might get funded less

Yes, let the market choice… not your own selfish desire.

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One downside of capping the number of tickets a user can purchase will be the lower prize value compared to the main Pool. I’m not sure users will want to invest in a Pool if the prize is so low that it doesn’t seem attractive to them.

I would recommend anyone who is voting to read this research paper about lottery design: https://www.jstor.org/stable/798311

It can seem counterintuitive at first, but players will tend to wait for the prize pool to get bigger before buying any tickets, even if the higher the prize gets, the less chance of winning they have.

That being said, a capped Pool could be a great experiment.

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Interesting take, but PoolTogether beings in a few new factors.

  1. You know how many tickets are sold
  2. People are hoarding tickets and you can see it

This introduces a whole new perspective on the manner as you know your chances.

I’m not sure users will want to invest in a Pool if the prize is so low that it doesn’t seem attractive to them.

Why would 10,000 people with 50 DAI even bother to put their money into the pool? It makes sense why 1 person with 10,000 DAI would stake their coins into the pool however.

A person with 50-100 DAI might be interested, but over time they’ll leave the pool as their funds can be more useful in other places.

Also, we need to factor in the donation loot, more users = more loot as the desire and incentive for token creators to get exposure increases.

I would agree the capped pool would take longer to grow however

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Thanks for taking the time to write this up @Ben! And good thoughts in the comment @Pierrick.

I think Ben makes some good points I hadn’t thought of before. Specifically around people adding the bonus tokens for marketing and the marketing value being reliant on the small fish. Right now, that’s the primary driver of the prize size, so there is actually a good argument that we don’t need the whales… at least not right now.

I also agree with Ben that although hypothetically someone could create a bunch of wallets I sorta doubt that would be a real issue. And if it was a real issue. We could see that pretty easily on the blockchain.

Between this and @Torgin post it’s very clear to me we need more room for experimentation around what types of pools people want to be in (and my guess is that many people will want to be in multiple types of pools).

We wanted to start with just the single pool to keep things simple so we need to figure out the best way to enable more pools while still keeping things as simple as possible.

It’s also worth noting there might be other ways to achieve the same goal that Ben’s seeking. For example, perhaps we could create a system where your chance of winning increases the longer you are in the pool. This might allow people who don’t have many tickets to actually have a high chance of winning.

I don’t have a succinct conclusion here. Just agreeing with the point though and throwing out some more ideas. I’ll keep thinking on this.

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the proposed solution does not eliminate the possibility of cheating and using multiple addresses for circumventing the purchase limit.

Sure, but it’s not worth the gas.

Let’s say you want to buy 100,000 tickets, let’s say the cap is 100. That’s 1,000 addresses…

This means, 1,000x(current price of gas) gas fee’s into entering, and 1,000x(current price of gas) gas fee’s to exist.

For fun, let’s just say gas is 1.90 USD per address.

This would equal 3,800 (this is on the low end).

With odds of winning, why would anyone do this? It would eat away at their winnings even if they won. If they didn’t win, they would waste tons of money where an 5% interest rate would be better.

Plus again, you still have two pools. People just have options, not limitations. Most of these arguments above are binary, this isn’t a binary option.

Side note
People talking about a whale winning, right now it’s just a few people… if this gets larger… I guess you could see the future here.

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Discord comments

Pooltogether was a good project at the beginning, now only whales win pools and I can't withdraw my tokens because fees are so expansive.It would be necessary to make different type of pool according to the number of tickets with different duration of token blocked with the possibility of winning only once per blocking period to give more luck to the small wallet.

Always the same : When whales are here, fruit becomes rotten
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I like this idea, and I think I saw another solution put forward in a different thread where 5% of the prize fund is awarded to a wallet address randomly selected from the pool. You may get bots creating a stack of wallets to increase the odds of winning the smaller bag but I’m sure that could be mitigated.

At the moment, PoolTogether is for the whales, not the minnows.

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Simple solution for a fair pool.
1- Jackpot that feeds from all governance pools and awards based on “per wallet”.

OR

2- Have a second per wallet prize awarded in the POOL pool. Little fish can buy or earn POOL to be in the POOL pool.

Don’t really see a point in doing a separate pool with a cap when the prize will be worthless.

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Solution #1 seems to be ok.
No need to deposits to the pool
Per wallet (Pool token holder only)
1 wallet = 1 chance of winning
… etc
a way to rewards Pool holder

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I’m a fan of merging ideas. Whales like to farm POOL, maybe they’re interested in the prize but it seems they’re more interested in the POOL given when the influx occurred. If you have a limited tickets per wallet idea, make the number of tickets substantially small, like the 100 ticket example. To address the low prize reward, entice a whale by dripping POOL to sponsorship, then the whale gets POOL and the fish get a nice prize.

Just my initial thoughts.

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We could propose applying quadratic equation to the deposits, similar to how Vitalik handles the voting for grants. This would impose diminishing returns to whales but still give them power in the sums of their deposits.

Example, if we applied a ^(2/3) to the DAI pool
6mil DAI would net 33,019 tickets
50,000 DAI would net 1,357 tickets
500 DAI would net 63 tickets

This would level the playing field substantially for small bag holders.

Challenge would be in the conversion back upon withdrawal, but I’m sure brilliant minds could come up with a formula.

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Hi. My thoughts are, just keep things they way they are. I’m only a small bag holder, but I will tell you what attracted me to this project. First of all we are in a bull market and it is a great way of keeping some funds in stable coins and forcing you to keep them as such while earning the pool token (due to the gas price). That way you wont lose everything when the bear market kicks in. The odds of winning are slight but possible regardless of the amount you have pooled. My wife has been doing the lottery for 20yrs and still keeps going. I refuse to do it but I’m happy to put my money in here because it is a form of saving while still having an outside chance of winning. I think we should keep a decent prize. That way the project will keep expanding and perhaps in time there could be another airdrop to people who have remained loyal to Pooltogether. I think reducing the prizes would ultimately reduce the potential amount of users onboarding here. Thanks for reading this and hopefully taking into consideration my views. Thanks.

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Also I was thinking that If another airdrop was ever done then you can have a set amount regardless of the account balance. That way the whales will not benefit more than others. thanks.

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I really like the jackpot idea or the fish tank idea. Both award a random wallet address. The amount awarded should be geared to fish. Big enough to matter but not so big that whales make a ton of addresses.

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I think too that reducing the prizes might not be as attractive for new users. I submitted an idea to counter this effect, "The Fish Tank" / Fair win chances for little balances .
Check it, I think it can match the needs of whales and fishes :wink: