PoolTogether User Guide
V4 DocsDeveloper DocsApp
  • Welcome
    • About PoolTogether
    • Frequently Asked Questions
    • Getting Started
  • PoolTogether V5
    • Use PoolTogether V5
    • V5 Developer Docs
    • Cabana.fi Docs
    • Build on PoolTogether
  • PoolTogether V4
    • PoolTogether on Optimism
      • Getting USDC & ETH on Optimism
    • PoolTogether on Polygon
      • Getting USDC on Polygon
    • Guides & How Tos
      • Deposit Delegator
      • Setting up Prize Notifications
      • Migration Guides
        • Withdrawing from V2
        • Withdrawing from V3
        • Withdrawing from V4
      • Using Coinbase Pay
      • Using PoolTogether via Coinbase App
      • Withdrawing USDC from Binance
      • PoolTogether Debit Card FAQ
      • Bridging POOL with Across
      • Getting involved
    • Governance
      • Proposal Process
        • PT Budget Requests
      • Voting & Delegation 101
      • Governance Roles
      • Protocol Constitution
      • Governance Calendar
    • POOL Token
      • Tokenomics
      • POOL Supply
      • Getting POOL Tokens
    • Ecosystem & Links
    • Developers
  • Security
    • Risks
      • Protocol Coverage
    • Audits
    • Bug Bounties
  • Dive Deeper
    • PoolTogether Discord
    • Developer Documentation
    • Brand Kit
Powered by GitBook
On this page
  • Growth Flywheel
  • The POOL Token & Kickstarting the Growth Flywheel
  • Reserve Capture & Perpetual Growth
  • Staking POOL
  • Governance and the Growth Flywheel

Was this helpful?

Edit on GitHub
  1. PoolTogether V4
  2. POOL Token

Tokenomics

PreviousPOOL TokenNextPOOL Supply

Last updated 2 years ago

Was this helpful?

Growth Flywheel

The key to PoolTogether's growth and long term sustainability is large prizes. Large prizes attract more deposits which create bigger prizes attracting more deposits. This is the growth flywheel for PoolTogether.

The PoolTogether protocol will reach escape velocity when

1) Prizes are large enough to organically attract new depositors and

2) depositor consistently win enough small prizes to remain engaged and economically better off than a traditional savings account.

However, the protocol has a "cold start" problem. Large prizes are needed to get deposits but to get deposits we first must have large prizes. Two mechanisms help overcome this, reserve capture and POOL token distribution.

The POOL Token & Kickstarting the Growth Flywheel

The POOL token solves the cold start problem. At the early stages, the distribution of the POOL token serves as an additional incentive to deposit into the protocol when prizes are not yet large enough to achieve escape velocity. People initially deposit primarily to receive the POOL token but these deposits create larger prizes and grow the reserve. Larger prizes begin to trigger organic growth. As organic growth increases and becomes self-sustaining the distribution of the POOL token can be reduced.

Reserve Capture & Perpetual Growth

Staking POOL

Governance and the Growth Flywheel

The above is the playbook for how the protocol can create self-sustaining organic growth. It's up to POOL holders to manage the different variables properly to ensure this growth happens.

The "Reserve" is a percent of every prize that is kept in the prize pool and placed under the control of POOL token holders. Funds directed to the reserve make the prizes larger without diluting the odds of winning. Prizes in turn contribute to a larger reserve. This creates a and mathematically speaking, increases the expected value of a deposit into PoolTogether. A large reserve accelerates the growth flywheel.

.

POOL holders can deposit their POOL tokens to enable voting without transactions fees. .

perpetual growth cycle
You can view the current protocol reserves here
Deposit your POOL tokens here to begin