This is a continuation of the discussion we’ve been having on discord regarding improving the POOL tokenomics. I think we need to get ourselves in a position where the demand for the POOL token outweighs the number of tokens being produced. Our POOL tokens in treasury are currently worth roughly $16MM but like many of you I believe the POOL token is very undervalued and it would be a shame to have to sell tokens or overspend at these levels. This is my personal view on a course of action to steer the ship in the right direction.
Part 1 Growing the POOL Token
The POOL token is our most valuable asset and is a tool to help decentralize and to help grow the usage of our product. I propose we introduce a V4 POOL pool that is supplemented with $2,500 per day in USDC prizes. This plan amounts to a cost of $1MM dollars per year but is easily offset when you consider that every dollar the POOL token rises our treasury valuation increases by $4MM. A POOL price of $10 gives our treasury POOL a value of $40MM. Given that current POOL market cap is around $11MM and not every POOL holder will deposit into this pool the returns will be extremely high and it would likely take a 3-4 times increase in prices for the return to be below 5% APR.
I believe many believers in Pooltogether will increase there investment to get in on this prize pool and would also convert the USDC they win into POOL tokens. This will allow POOL holders to share in both the fun and the returns that our product can offer. This move can change the sentiment and open the door to a new type of investor. That new type of investor is someone like myself who didn’t come to crypto to play it safe and sit in stable coins but to have a share in a platform that has potential for exponential growth. I believe Pooltogether has a place for both types of investor as well as those who want a diversified portfolio with a portion being low risk with some return and a portion being high risk high return. Some may have the opinion that we can’t afford the 1 million dollar cost but I think we can’t afford not to take this course of action that will grow our treasury and change the narrative around our token.
Part 2 Reintroducing POOL Drip to the USDC Pool
Once we have taken appropriate action to stimulate the POOL token I think it makes sense to shift our focus on growing the USDC pool to 1B TVL and beyond. In the past our returns on USDC were the best on the market which unfortunately attracted those who were here to capitalize in order to pass that return to their own investors instead of sticking around to be a part of what we can offer. If we introduce a POOL drip to the USDC pool that is closer to 2-3% but will also have an additional prize yield associated then our depositors will get a great return but we won’t attract the types of users that are just here to feed from our pools. Liquidity mining is widely used in the crypto space to attract growth and just because we didn’t have it quite right before doesn’t mean we can’t use it to grow now.
- Supplement the new V4 POOL pool with $2,500 per day to help stimulate growth for the POOL token. This will greatly increase the value of our treasury giving us room to do more creative things with the POOL token in the future.
- Continue supplementing USDC prizes and add some POOL drip to give a guaranteed return and allow for the growth needed to have a sustainable platform. 300 POOL per day is the suggested amount.