Scaling PoolTogether: Unlimited Prizes Across Chains

Transcript

great thanks bum dia i am so glad we have a new microphone today this is great um so my name is brendan i'm going to be talking about how we're scaling pool together and as mariano said we launched v4 last thursday and it's orders of magnitude better than the previous version so i'm really excited to talk about it um also want to acknowledge the organizers this is my first time traveling in two years like a lot of you and i'm so stoked to be here and see everybody again so thank you very much for setting this up this has been a blast it's been great so before getting into the details i want to talk first about what are prize savings not everyone here knows about it

so i still need to spread the good word so prize savings are is it's gamified interest so instead of earning interest on your deposit you're actually having a chance at winning everybody's interest on all deposits so there's a chance to have an outsized income or sorry outsized uh prize versus just a small amount of interest and this is pretty significant for people with small amounts of money because interest is really good for people with lots of money because you can earn lots of money through say five percent apr and this is in stark contrast to somebody would say who has a hundred dollars and the value proposition to them is like okay yeah you can have you know 100 earning five percent apr over five years

or you could have a chance to win ten thousand dollars every day and it's a much simpler value proposition and it has known psychological effects people do love this and this is in stark contrast and also so you do get your money back so you have a chance to win this outsized prize but then you get to get your principal back whenever you want so it's a very cool very simple mechanism this is in stark contrast to lotteries so each year americans burn 70 billion dollars in lotteries huge amounts of money and uh studies have shown in the past few years that 40 of americans have less than 500 u.s in savings so they don't have that rainy

day fund and that's 70 billion dollars that's basically a couple hundred bucks per person so they they would have saved their money otherwise so this is really unhealthy financial behavior that we need to fix and people know this so this system exists throughout the world on the bottom left you can see the uk premium bonds this is actually the biggest one at 200 billion dollars just in the uk alone each year they give away one billion dollars in prizes a ton of prizes but actually a very cool side effect is that they also divert a portion of the interest to public goods nine billion a year goes towards public goods like hospitals roads you know any any government

services so it's a great way to fund public goods and it's something that we're interested in pursuing as well in the states you've got the walmart money card and this is interesting because the money card existed for a number of years but in 2018 they introduced the prize savings program and this is special because the money card you load it's like a card you load up and then when you spend it at walmart you get benefits and all that stuff but if you decide to take a portion of that those funds i believe it was minimum 500 and lock them so that you don't spend them then you have a chance to win a thousand dollars at a certain frequency and in 2018 2019 they grew by two billion dollars it had significant growth so

it's clear that this is a really motivating factor for a lot of people especially consumers at walmart and then finally we have commonwealth here which is a financial non-profit and they have also started a savings program called save to win that operates across 35 states in credit unions across 35 states it's also seeing some success now blockchain so what is so great about blockchain it's auditable so that means the the whole system is transparent you can see exactly how it works this is this is so unique this is so incredible especially

for finance there's no smoke and mirrors nothing happening behind the scenes it's it's really incredible it's also provably fair so as a consequence of that transparency you can see who won and why at least in our particular application there's no there's no one pulling strings it's also globally accessible so those programs that we saw uk united states and in fact dozens of other countries only those citizens could access those funds or access those uh financial instruments so using blockchain we can access the entire world and create the biggest price savings in the world this is something that we're really excited about it's also non-custodial now this doesn't

necessarily apply to every single protocol it really depends on the implementation but at least in our case we do not custody the funds so your funds are secured by a smart contract that's been thoroughly audited so there's no one tampering there's no there's no intermediary that's going to take a cut it just lives in the code it's also extensible and a great example of this is uh in the past two versions we've had something called pods so when you deposit into pool together you get back tickets and these tickets represent your chance of winning but what you can do is you can combine these tickets together just like an office ticket pool to have higher chances of winning a share of the prize and we've seen this become very popular with our users it's

very cool but this is an example of different derivatives that you can make because the system is so composable so it's it's really cool it's really fantastic um finally it's user owned and again it depends on the protocol but in pool together's case the users own the protocol they get to decide how many prizes they have what assets are consumed what chains it's on they decide everything there's no there's no dictates by some you know central body but as we know the big disadvantage is transaction costs over the last two years we've seen some serious bursts in gas prices like upwards of four thousand way that is just unsustainable and

for pull together the average deposit is like 500 thereabouts so when it costs 200 to deposit in it's not exactly no loss anymore and we really need to fix that we we have fixed that and that's what we're so excited about um and this has been uh manifested by the rise of ethereum l2s and evm compatible l1 this is fantastic two years ago at devcon i heard so much talk about zk rollups and optimistic rollups they were just very nascent back then just ideas but now we're seeing these hit production and we're seeing the fruits of those people's labor it's really exciting to see and we're also seeing due to ethereum's popularity

evm compatible l1s so even if you need to not necessarily be on ethereum you can easily port your dap over to another chain and get those transaction costs that you want that throughput that you want so so how have protocols been leveraging these so far well they want to be available everywhere and so they fork themselves this is basically you're cutting and pasting yourself onto these different chains and that's great it's great super portable no problem except that you're fragmenting liquidity so take sushi for example they've done an amazing job forking themselves and i

believe they're on over two dozen blockchains now i mean when i say chains i'm including l2s i know curious would probably not like that but it's just easy so l1 and l2s um but that means that uh slippage is different on all these different chains which is unfortunate they need to share that liquidity somehow so um while it's great being there there are some there's certain drawbacks as well as fragmented control now you need to somehow spread governance across all these different change chains which is not necessarily a simple task and pulled together we've done the same thing so we're on sello polygon ethereum and binance and each prize pool is a separate pool unconnected unrelated to the others we've got a usdc pool we have a dye pool

comp uni uh ohm now with the omis and none of them can interact with each other all the liquidity is separated so all the prizes are kind of fragmented that way the prices are smaller as a result you don't get that big headline one million dollar prize i mean sure we could sum them all up but it's not the same thing and and likewise just either the same pools on ethereum or pools across on other chains none of them are connected so it's uh it's it's been challenging for us because we've been um we've had a lot of pools on ethereum but now we've been moving to polygon but then we have this bootstrapping problem when you create a brand new pool the prize is the interest if there are no deposits then there is

no prize and so it's very capital intensive to start a new pool there's no kind of network effect where you can just plug a pool into a liquidity network and uh it instantly has access to prizes no matter how many deposits are in it that's something that we're we're actively that we've built and so this is what pool together v4 is is we've linked all the prize pools together in two important ways the prize liquidity so that means the the interest from all the different prizes is combined and whether this is on the same blockchain and we're actually just moving tokens around or if it's on different chains and we're actually just bridging them through token bridges

we're combining all the prizes together and the interesting thing about pulling it all together is that we can actually do different assets as well so we could have a stable coin pool that is like fey usdc die all the different stable coins or peg coins rather and so we can actually have a much much broader asset base for people to deposit into as well we have the same odds for every prize pool so really i mean given they're all linked together you can kind of think of it as a singular prize pool but what we've done is we've changed the system such that we can actually push odds to each of these and mirror them across all the different pools so that no matter what pool you deposit in you have the same chance of

winning we call this algorithm tsunami because it brings a wave of prizes actually you guys might have seen you might have seen the ocean trophy emoji that's kind of our meme that we've been pushing and uh that represents tsunami that's this wave of prizes and you know what since we launched last uh i think it was last last thursday at 9 00 p.m pacific and then i flew out at 9 a.m pacific on friday it was like 12 hours but we launched and since then we've had 1100 users and 5 million deposits and we've given away something like 800 in prizes people are ecstatic at that that they're actually winning um this is a significant departure from the previous pool together where we had a very limited number of winners and so we now use more of a statistical

algorithm so rather than actually explicitly selecting a winner we have a sequence of winning numbers each user gets a certain number of picks based on their balance so let's say they have you know ten thousand die in it and the exchange rate is ten to ones they get a thousand picks each of those picks corresponds to a random number that we pseudo randomly generate using their address and the index and then that pick is compared to the winning number the amount that matches determines their payout so it's a statistical way of distributing prizes and allows us to scale indefinitely it's pretty it's pretty awesome pretty amazing and it's uh it's proved itself to be uh working very well

so what we can now do is we have this same prize we broadcast it to all the different chains well not necessarily chains but all the different pools on these different chains or the same same chain doesn't matter and people can deposit no matter where they are and get access to the same prizes so it allows us now to start adding on new chains we can add you know orbitram uh avalanche optimism starknet all these different new scaling solutions we don't have the bootstrapping problem we can just plug them right in people have access to the main prizes and not only that but this this this network effect actually spreads to other forks as well so we have had a number of forks of pool together and there hasn't been any

incentive for them to join the protocol but now there's a reason for them to tap into this prize liquidity this shared prize liquidity so they can easily plug in their liquidity and have access to the headline prizes that we offer so something that i can't help but talk about are whales and this was a significant problem with v3 because because of the old algorithm of explicitly selecting winners and storing that on chain there was a very low overhead or sorry um it was we could only do so many winners it was like 20 winners or something like that so um as the pool grew and got bigger and bigger

and bigger everyone's chances of winning got smaller and smaller and smaller because we had the same number of winners the same number of prizes but with the new pool together we can have like 10 000 prizes and that helps with whales because now we have this incredibly long tail so while the whales sure they may consume a portion of those prizes there's still a huge number of prizes that get awarded to a lot of different people so you can see here i mean i don't actually know the count here but we uh right now we're giving away about a thousand prizes a day and that's three orders of magnitude bigger than the number of prizes we were giving away before uh pretty incredible so that has really improved the system and so this illustrates as well how

as the deposits increase and the pool gets bigger and bigger and bigger now it's very easy for us to turn up the prices to an arbitrary number virtually unlimited and so if the pool ever does become a trillion dollars which we hope it does we can have any number of prizes and so your odds of winning will always be the same which is really important to make sure that what we call the small fish have a chance at winning so in this way we think we can scale pool together and bring it to a global audience thank you very much