How PoolTogether Governance Works
PoolTogether Community Interview #8 – Leighton Cusack, PooLTogether Co-Founder Part #2
Hello Everyone,
Thank you for reading and being a subscriber. We hope the first 100 Subscribers enjoyed your beautiful POAP as designed by the great @Pedro from our Discord.
We look forward to continue sharing with you a lot of insight, fun and education about PoolTogether in the coming weeks including how best to use the protocol and of course, how to become more involved with the running of the protocol.
Today, we are continuing with the interview with Leighton Cusack, the Co-Founder of PoolTogether. We learnt last week about his vision for a blockchain based protocol which would help people become financially healthy and in particular, help people make the first steps towards building wealth which may be difficult to do using either traditional finance and the resources available to them.
Today, we will explore more about how PoolTogether as a protocol works. How PoolTogether Inc. the company which developed the original solution works with the PoolTogether protocol which is a decentralized blockchain DAO to run and develop the project.
How does Governance within PoolTogether work?
At a very high level, there are 2-3 functions which Protocol Governance needs to manage:
Managing the Operations – this includes deciding the parameters of the prize savings protocol e.g. there used to be 2 winners a week, now it should be 10 etc. What should the reserve rate be etc.
Managing further distribution of the POOL Token. Including management of the Treasury. This is very important as it decides who will control the protocol. For example, looking at reintroducing POOL distribution in version 4
Deciding on major protocol changes and upgrades. For example, launching USDC on Polygon.
These are the main functions of Governance.
Here is how Governance within PoolTogether works.
Governance Proposals are executable computer code. They are commands. E.g. I could have a proposal to transfer X amount of POOL Tokens to Y addres.
To submit a proposal you need to have either 10,000 POOL Tokens in your wallet or have this amount delegated to you
It then needs to pass 100,000 POOL Tokens cast in your favor for the proposal to go through
How many POOL Tokens are in circulation and how is the distribution organized?
There are 10 million POOL Tokens as of today. 5 million of these are still controlled by governance and 5 million of these are distributed. Around 500,000 have been burnt and are gone.
There are also many POOL tokens which were airdropped to wallets and were very likely never claimed and probably never will be. So, they are in effect out of circulation also.
How does PoolTogether Inc work with PoolTogether the Protocol?
This can be confusing because PoolTogether Inc has the same name as the protocol. Perhaps we should change the name of the company to e.g. Software Development International so there is no confusion.
PoolTogether is the protocol. PoolTogether Inc is the company which originally developed the offering. PoolTogether Inc does not have any POOL Tokens. It is a bit like the relationship between Coinbase and Bitcoin. You can use Coinbase to buy and hold BTC but Coinbase does not control BTC.
PT Inc still contributes to the development of the protocol with software code for example. We can make a PoolTogether app and then would be paid a small fee for people using this. We can build services on top of the protocol. PT Inc is a standard fintech company in that regard.
Why is PoolTogether Inc still working on the protocol?
There is still a big role for companies to play e.g. if a bank wants to integrate with the protocol, they can pay us to do it. We will help them integrate so there is still an incentive for us to be involved.
PT Inc is still funded by investors and investment rounds.
There was an equity investment in PT Inc, no debt. In February 2021, the investors got a portion of POOL tokens – 7% or 700k in total.
What are you looking for next with PoolTogether?
We want to improve the foundation of the protocol and to help scale the solution as well as start integrations with other DeFi solutions such as Rainbow and Dharma wallets for example.
We hope you enjoyed this interview with the Co-Founder of PoolTogether.
Next week we will return with an interview with a Community Member who participates a lot in the running of the protocol.
In the meantime, please keep depositing into v4! As you will see in this Sunday’s newsletter, we have an exciting update about new prizes being added to the draw!
We also have the Spanish, Portuguese and Mandarin versions of the PT Community Substack for you to enjoy as well.
Today we have the 2.45pm EST PoolTogether Community Call on our Discord so please join if you are free on the PoolTogether Live Channel.