I agree; the token narrative is incredibly important. The narrative is what people buy into. In my POOL token post from a month or two ago I mentioned Leighton’s narrative of the perpetual growth machine. I still believe that narrative has potential.
The perpetual growth machine is the idea that some of the interest always feeds back into the pool. Therefore, the EV on the pool will always be greater than depositing individually.
However, realistically the interest portion is so small that we’d need some kind of leverage to speed it up. I like the idea of borrowing against the POOL in the treasury to increase yield. Perhaps @BraveNewDeFi has some ideas there that mitigate risk.
Long term, on a rational level, I think @Loitering_Gorilla has outlined some very concrete points (above). It feels like a natural idea- that POOL token holders get a cut. Then they’re banking on long term TVL growth.
The holy grail. This is what we should be shooting for.
I feel like we have all identified important elements:
POOL token holders get to play
POOL holders take a cut
Increase TVL without subsidy
Perpetual growth machine
Together these hint at the shape of something. I need to think about this.
The perpetual growth machine really resonated with me when it was proposed and voted on. I think it did for most as we saw a huge voting turnout for that PTIP. Its potential will be unlocked when we increase our TVL.
Aside from that, the elements you identified would lead to a clear value proposition for holding POOL. Like @TheRealTuna I don’t hold many stables, but I still love PT. It would be great to incorporate POOL into V4 in some way. This is why @TheRealTuna’s post appeals to me, it gives utility to POOL in V4. I think that’s sorely lacking. The method to do so in Tuna’s post is contentious, but the underlying idea is solid and warranted. We need to incorporate POOL into V4 somehow. Not only have POOL holders taken the brunt of this downtrend, there hasn’t really been an opportunity for us to use V4.
@tanman I’m really satisfied with what Brendan outlined. It’s pretty much a succinct summation of all the ideas thrown around in the Discord the last few weeks and months.
In the interim, I’ll just happily use my POOL to vote but these are POOL attributes and goals we should shoot for. Now, it’s just about thinking how we implement these ideas.
Without deeper liquidity for POOL, there isn’t a safe way to create a lending market for POOL. If we can create deeper liquidity, we could explore a listing for POOL somewhere. Otherwise, the market + oracle risk would be too great for the protocol.
The only way to borrow funds would be using an under-collateralized lending protocol like Maple Finance or using UMA’s Range Tokens, but both would like result in interest rates that would require the protocol to take on additional risk to earn enough yield to make a loan profitable for PT.
In the short-term, I think we’d do well to experiment with how we use the POOL token in ways that don’t require a lot of development resources, while creating value outside of revenue sharing until we have a long think on potential tokenomics changes.
One of the biggest draws the PoolTogether offers is a fun way to save with an emphasis on a social experience. There is a strong community within PoolTogether, and this is why we see such high attendance rates on our calls.
Using POOL for governance + prize pools that give holders a chance to win NFTs, exclusive POAPs tied to a social experience, delegated chance to win for a week (once we scale TVL more), etc. This would be a low cost to the protocol, but the social benefit would be huge. You could raffle off “Lifeguard Prize Packages,” which come with a custom POAP, PT Merch, feature in the newsletter (Lifeguard on Duty: Poolie of the Week), and other fun prizes. Since we provided POOL drip to the original pPOOL, I think it wouldn’t be too difficult to create an official pPOOL on, say, Polygon where such an experiment could be conducted.
I do think there’s a good discussion to be had about how to improve the POOL holder’s experience, but I’m not sure a solution that decreases existing runway capital is the right approach.
Something I want to add that wasn’t totally clear previously is that this proposal should include reducing the prize supplements to USDC pool which ultimately reduces costs of $17,000 per day and replaces them with a cost of $3,500 per day($2,500.00 in prize supplement to the new POOL pool and $1,000 per day in POOL to the USDC pool based on current pricing of 300 POOL per day). This is a significant reduction in cost from our stablecoin reserves. We could do the reduction gradually or just cut it off completely.
What would we be left with:
300 POOL per day is equivalent to $365,000 USD per year which when applied to the approx 30MM in TVL in V4 would be equivalent to 1.2% APR.
Aave interest is currently 3.74%.
We redistribute a portion of the USDC interest to feed back into the pool as sponsored funds in support of the perpetual growth model we had followed previously. It could be 0.5% or perhaps even up to 1%(a little bit of POOL price growth would sweeten this.)
This would give us a better return than Aave ranging from 0.2% to 0.7% more than Aave without even factoring in any POOL price growth.
Perhaps the $1MM in prize supplement draws some users to buy POOL, maybe even some f the ones who are is the USDC pool currently. The key is that we now offer a better rate than Aave with a similar risk profile and it doesn’t cost us all that much. We are now ready for sustainable organic growth and the POOL token and our USDC TVL can scale up together.
@SmartInvestor
Our treasury is currently being drained and this is a plan to alleviate that. The artificial measures are currently already in place. This plan reduces spending and allows us to renew POOL drip in a more effective manner. Since I posted this proposal the value of our POOL in treasury has lost another $2MM in value. We are in a worse position to leverage that treasury and we need to come up with a plan. Curious to hear alternative ideas to increase deposits and reach sustainability.