The PoolTogether Prize Savings Hyperstructure

[Brendan]

@mkkoll

does [PoL] effectively cap the largest prize the protocol could distribute based on the POOL liquidity in the system?

Assuming the winner wishes to instantly dump the grand prize on an AMM, then they would incur slippage, yes.

I created a spreadsheet that simulates the grand prize being won - view on Google Sheets

The spreadsheet assumes these things:

1. TVL and yield is approximately our current values
2. All yield is dumped through an AMM
3. Total PoL is $1m (500k usdc and 500k pool)

On row 41 you can see a POOL dump of $30k. This is roughly inline with what the V5 grand prize will be. V5 Prize Distribution Spreadsheet

On row 41 the grand prize dump results in:

• Grand prize of $30k USD of POOL would be redeemed for $29414 USDC
• POOL price goes from $1.08 to $0.96, then continues to climb

My assumption is that with higher volume we’ll see more LPing in tighter ranges, so the capital efficiency will increase and price impact will be less.

I also believe winners may want to hold POOL or stake their POOL for other utilities.

I’d also love to have a mechanism similar to @underthesea’s streaming prizes idea. I imagine that users could either:

1. Stake POOL
2. Dump their POOL for something else
3. get higher APR over X number of days (POOL is liquidated over time for their deposit tokens)

@mkkoll

Will every chain need its own deployment of the hyperstructure and a decent chunk of POL in POOL to service it?

Yes, I think every chain we launch on should have PoL.

@mkkoll

Will this make POOL a bit volatile? At prize draw time, a race is on to liquidate POOL winnings to other assets before the POOL price drops and then slowly recovers on the yield. Could people game the prize draw timing?

POOL will definitely have some exposure to grand prizes! There are plenty of incentives and mechanisms we can build post-launch that will mitigate this, I believe.