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Build your own exposure to DeFi using bullish, bearish, and hedged investment DAO-managed DeFi products with rewards

What Powerpool is about

PowerPool is a DAO manager of non-custodial structured investments offering broadly-diversified, actively-managed, rewards-rich, gas-efficient, multi-chain family of thematic pooled investment tokens with hedging options easily blended by average investors.

Project Wiki
Current Upcoming

A great solution to distribute rewards from the Project Treasury. The purpose of xCVP is primarily to create a claim on a proportional share of the Net Asset Value (NAV) of the PowePool DAO Treasury


ASSY is a concentrated bet on AAVE SUSHI SNX YFI tokens launched as the first PowerIndex Dynamic AMM. Weights of tokens are adjusted once per 24hrs according to the relative share of assets M.Caps.SUSHI and AAVE staking or receiving an additional

Proposed by Marc Zeller (AAVE)
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PowerIndex is an index focused on providing exposure to Defi market blue chips. It is composed of 8 tokens and is included in CVP liquidity mining program (requires staking PIPT-ETH Sushi LP tokens for receiving rewards)

Proposed by Delphi Digital team
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Yearn Ecosystem Token Index is an index product launched in collaboration with Yearn Finance ecosystem. It provides exposure to Yearn ecosystem projects in a single token. YETI-ETH Sushi pair is included in the Onsen program

Proposed by Ryan Watkins (Messari)
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New product (merged Legacy Pools based on Balancer v2)


New DeFi blue-chip ETF-like product replicating the composition of existing Synthetix sDEFI that tracks the 20 top DeFi tokens (but synthetically without rewards or future meta-governance bonuses). By mirroring it, PPDEFI pool ivestors will have flexible options to hedge (or not) against steep declines in the capital value of their broadly-diversified DeFi

Protocol features
Bullish, Bearish and Neutral strategies - balance your own portfolio to make money in any market
New DAO governance platform allowing xCVP stakers to actively manage underlying projects collectively
Hedge Funds now can be our clients or partners
Data-driven metrics & analytics
Power DAO

The Power DAO’s mission is to curate shortlists of tokens of interest held in various pooled vehicles, and also the DAO Treasury itself; with dynamic (re-) categorisation via staked xCVP (quadratic) voting consensus; continuous re-weighting based on time-delayed flash polls, and multi-chain and multi-layer shortlists (initially ETH DeFi & BSC DeFi).

Each shortlist corresponds to one of three types of generic structured investment strategies; long/bull (currently duplicative, Ethereum-only non-composable pools like PIPT, ASSY & YETI), market neutral/high yield pools (Yearn Lazy APE was the first product of this kind), and defensive/hedged/short/bear - all managed thorough the evolving PowerPool protocol fundamentals - based dynamic weighting, and soon modulated by directional sentiment input from the DAO.

Power Agent

Power Agent (or Power Poke) automatically executes on-chain maintenance operations such as TWAP prices, rebalancing AMM weights, processing batched transactions, and executing asset swaps for xCVP.

Power Agent is managed by two agents - Poker Agent and Fishermen. Each role is required to stake CVP as a deposit. The address with the largest deposit becomes the Poker Agent, while the rest become Fishermen. The Poker Agent is responsible for performing all of Power Poke’s on-chain operations, while the Fishermen are responsible for slashing the Poker Agent if there’s any failure. The Poker Agent and Fishermen are both rewarded for their work in CVP.

CVP Token

CVP is a Governance token that governs the PowerPool protocol. CVP holders vote to approve protocol upgrades, new indices, portfolio strategies, treasury management, and usage of meta-governance power. Power Agent maintainers use CVP as a deposit and get reward in CVP. In addition, protocol fees are distributed to holders staking CVP to xCVP.

Market cap 50 mln $
Circulated supply 12 mln.
Markets 36
CoinMarketCap CoinGecko

xCVP is a treasury contract and ERC20 token, allowing to stake CVP, participate in governance, and earn protocol fees. This contract collects fee stream from PowerPool products and automatically purchases CVP from the open market, adding it to the overall CVP pool and therefore increase the value of xCVP.

Sven Möller
Public team
Strong institutional background, payments, banks, insurance, asset management. Previously Swisscom Blockchain, EY.
Sergey Medvedev
Public team
Business development and marketing background, APAC market knowledge. Previously CBDO at Cointelegraph.
Gordon Gekko
Chief architect
Several decades of experience with top strategy consultancies, consulting to institutional investment managers.
Vasily Sumanov
Public team
Crypto-native researcher, Ph.D, token engineer. Simulations of AMMs and Defi products, tokens value capturing mechanisms.
LeeRoy Oshiya
Been pushing people into crypto since he was born. Power broker, one of the most well-connected people in the industry.
Co-founder and CTO
Got his name for your convenience. Anonymous developer and early adopter in crypto before there was anything to adopt.
what people say
Q-01.) Will the PowerPool Protocol and Agent support various thematic pools/funds, some of which are relatively actively-managed, some relatively passively-managed and others externally managed by third parties at their discretion?

A-01.) YES. One of the main duties of the DAO will be to determine how each thematic pool will be managed, based on which metrics and analysis, and how and how often re-weighting is to be managed. The relevant mix of data sources and analytics to support fundamentals tracking will be defined individually for each thematic pool. An L1-themed pool like ALTL1POOL will be tracked on different metrics than a pool like Wallet, Identity and Security (WISPOOL). Externally-managed pools will be supported, under the tagline 'Powered by PowerPool', but these funds will not be part of the Power Universe and will require their own marketing and liquidity support. DAO members may or may not decide to invest in externally-managed pools. Nothing prevents an externally-managed pool from being included in the flagship PPOOL 'fund of funds' if that is what the DAO decides. Clearly, externally-managed funds will provide an interesting point of reference for internal discussions of DAO-managed pools.

Q-02.) Wouldn't ‘star’ investment managers perform better than a DAO? Can active DAO management do better than more traditional passive, relatively-fixed weight multi-token ‘indexes'?

A02.) Decades of fierce debate and many academic studies in TradFi have shown that only a very few exceptional individuals can, over time, beat the passive management TradFi equity tracker indexes. In the overwhelming majority of cases over time, active or 'stock-picker' management returns lag passive 'index' management by the cumulative effect of the fees charged by active managers. That said, when the pandemic struck, some TradFi investors, myself included, switched from passive vehicles to active vehicles, since the pandemic was such an unusual event that more flexibility would be needed.

But crypto investment resembles early-stage venture capital investing more than regulated equities trading. There are many reasons to believe that in crypto, more active management will beat passive, given the volatilities and rate of change. This has proved true in the case of neutral yield optimisers like YLA and others. For yield investments, active/automated management will beat passive because the incentive-driven liquidity sloshing around is so volatile on a daily basis. YLA is basically automated active management of pools for yield. This PowerPool product, plus the already well-publicised PowerPool focus on meta-governance interventions (to gain listings) gives PowerPool an emerging branding as ‘active’, as opposed to Index Coop which is relatively ‘passive’ (with leverage but so far no rewards or hedging). 

For longer-term gains, the key difference between active and passive is risk-adjusted volatility, which is currently too high in the crypto space for more mainstream investors. If PowerPool DAO can correctly manage returns/volatility of the CVP/xCVP token pair such that CVP becomes a preferred ‘Swiss Franc’ token (meme: CVP~=CHF) for borrowing against, with more upside than stable coins, hedged and backed by management fee income from 'nested' multi-chain 'pools of pools of pools' flagship funds, then the value of CVP and volume of xCVP staking will rise. Will xCVP beat the most objective benchmark, which is just holding/staking ETH2? That is the objective, but there is no guarantee.

If PowerPool could identify potential candidate individual or collective external Fund Manager/Methodologists, the PowerPool protocol could offer to support their personal weighted shortlists and track their metrics as well. The issue is branding and marketing. ‘Star’ manager investment funds would carry the branding of the ‘star’ and most of the performance ‘alpha’ fees would/should go to the ‘star’ manager. But there is a high risk in associating the PowerPool brand too closely with volatile investment managers who may crash and burn. Externally managed pools/funds would not be part of the Power Universe, and would depend on their Manager(s) for marketing and liquidity support.

Other protocols like Enzyme, Sets 2, PieDAO etc. are already addressing this style of investment management with ‘model portfolios’ (weighted lists) that typical investors can ‘ape’ into. Other than automated harvesting of rewards, what is PowerPool’s advantage? In short, we should try hosting external managers on a small scale, with only a discrete 'Powered by PowerPool' on their website. It will be interesting to see what additional functionality the ‘star’ manager would want.

Another option related to the ‘star manager’ option would be to whole-heartedly embrace the hedge fund platform functionality as a DAO, and then **seek partnerships with TradFI private partnership hedge funds** looking to enter the crypto space (there are now many just looking for options).  Using this ‘New Vision' documentation, it would be possible to offer TradFi hedge funds a full range of options to use the same protocol/platform as the PowerPool DAO, doing anything ranging from just buying/staking xCVP to proposing and operating their own products/strategies, to operating an separate private partnership hedge fund with its own capital sharing the platform with the PowerPool public DAO-managed investments. In other words, if PowerPool can deliver full functionality quickly, it could become a shareable platform allowing TradFi hedge funds to migrate into crypto at their own pace. For example, [Point72, managed by Steve Cohen](https://www.theblockcrypto.com/post/104522/steve-cohen-point72-crypto-market), is typical of prospective TradFI hedge fund partners, as are [Millenium and Matrix.](https://www.coindesk.com/hedge-fund-millennium-matrix-point72-defi-alpha) Legendary activist corporate raider [Carl Ichan has announced](https://www.coindesk.com/carl-icahn-bitcoin-crypto-big-way) that he has billions just waiting for the right vehicles.

Q-03.) What does fundamentals tracking involve, what can be tracked, now and in the future? How does tracking differ for different thematic pools?

A-03.) After staff performance bonuses, the biggest costs incurred by hedge funds is for purchased information flow. That is why Mike Bloomberg is so rich. Another key skill of the PowerPool DAO will be assembling and analysing actionable information to guide the DAO pool structuring/re-weighting voting process. The idea of DAO management of pool composition and weighting pre-supposes that targeted costly information has been distilled, sharing the costs across the entire DAO and all of the funds under its management. Links to custom analytics visual sources for every token on the shortlist, supplemented by data feeds sourced internally and externally from other sources will be accessible from links on the xCVP>1,000 Forum, thereby continuously increasing demand for staking at least the minimum 1,000 xCVP, and diluting the influence of xCVP whales while increasing informed participation in data-driven DAO discussions.

The issue of what data to track for the tokens on each shortlist, where to source it, how to analyze it, visualise it and even how to monetise it are typical topics to discuss in the DAO. These discussions can guide also the future development of Power Agent. Token Terminal and many others already offer these kinds of analytics as a feed. I have made a first cut of ideas to propose to the DAO. (see Data & Analytics )

Q-04.) As a data-driven, analytics-based investment fund manager, what metrics does PowerPool track, both on and off-chain?

A-04.) There are many analytics sites already tracking all manner of data which can be used for metrics, both on-chain and oracle-based. Once we accept that fixed weights on portfolio component holdings are not necessary, or even desirable, we can also conclude that fixed weights on metrics are also not required. There is no ‘correct’ or optimal set of tracking metrics equally valid across all possible thematic pools and investment postures. The role of the PowerPool DAO is to crowd-source environmental/market guidance and manage timely token (re-)classification processes to help the PowerPool protocol weigh various metrics appropriately depending on which thematic pool the token is in. The DAO process periodically signals the protocol to change weights on both holdings and metrics tracked whenever the required Quroum and Threshold majority signals a change.

Like 1960’s military nuclear attack bomber auto-pilot systems, the pilots were still needed because computing power was too limited and too much environmental information was required. Computing power is no longer so limited, but I would argue that the ‘pilots’ are still needed for the unaided crypto-investment PowerPool protocol to determine at any given time whether the outlook for a token should be considered bullish or bearish. Because it is not possible to uniformly classify/categorise all the rapidly-proliferating individual tokens, the collective xCVP stake-weighted DAO operates a 'wisdom of the crowds' the token shortlisting process and flash poll voting system to generate collective input to the PowerPool protocol regarding which tokens to track, how to attenuate re-weightings and when to ‘switch gears’ and apply different fundamental metrics. Given (quadratic) stake-weighted DAO-curated category shortlists, and flash poll-guided weighting adjustments, the PowerPool protocol can implement automated trading strategies by categories of token, managing timing and direction and magnitudes automatically within defined risk management parametric boundaries.

PowerAgent plays an important role in these processes.  PowerAgent is a truly decentralized cross-chain oracle, reporting price feeds (public and free to use by any dApp) in Ethereum, xDAI, and Polygon/Matic.

Q-05.) How quickly will the future DAO governance process be able to react?

A-05.) How agile does the process really have to be? The PowerPool DAO and protocol is not intended to be a trading/arbitrage bot. The PowerPool DAO is intended to manage a family of primarily bullish DeFi and high yield investment vehicles, with a defensive/front-running DAO Treasury denominated in lower-volatility xCVP. Individual investors can easily fine-tune their own personal investment postures very quickly by adjusting the proportions of their own personal holdings, e.g. a relatively aggressive portfolio {40% BSCDEFI, 40% PPDEFI and 20% Yield/YLA} could be very quickly changed for free into a much more defensive {25% Yield/YLA and 75% xCVP} portfolio, dealing directly on the PowerPool website. It should not be the function of the DAO to do collectively what individual investors can easily and cheaply do for themselves.

In TradFi, benchmark indices are rarely changed more than once a year. Experience to date has shown that even 'Top10' style crypto pool operators have struggled to reflect rapid growth of SushiSwap, Badger and other fast-moving elements of DeFi, making even apparently 'passive' management more active than anticipated, but the periodicity is still months, not days. PowerPool has already dealt with extreme emergencies, such as the Cover minting incident, and the reaction was near instantaneous. No DAO involvement is required to protect the funds under management.

In general, DAO platform tooling is evolving to support more delegated team/'guild' based distribution of decision-making closer to the SparkTeams most able to opine on any given subject. It is hoped that the SparkProd product development team will be continuously-developing multiple opportunistic scenario-based strategies that can be implemented by ‘flash’ DAO votes, results of which will be reported with 1-week delay. (see DAO Charter & Rules below)

Q-06.) How much participation in the frequent voting will we achieve and how many proposals will actually achieve the quorums and threshold results required for action?

A-06.) Participation is a challenge in DAO governance whenever too many small holders need to be incentivized to vote. PieDAO is an established player in the structured investment space, and has the most populated DAO, currently listing 4,944 members, 330 proposals, 53 unique voters and a 1.1% participation rate. That is interesting in terms of members and proposals, but voting and participation are sobering. One problem is gas-guzzling on-chain voting, with gas costs acting as a major disincentive. New gas-less voting platforms are making it possible to move voting off-chain, and complementary Forum platform modifications to support investment management via frequent ‘flash polling’ to guide weighting and shortlisting should make it possible to increase voting participation significantly.

It is the hope that publicising this new vision of PowerPool as an activist hedge fund will attract primarily sizable (quite a few institutional) xCVP stakers who understand what sort of game PowerPool is in, and therefore self-select stakers that really, truly want to play. Indeed, as professional investment managers, it is their job to play! Restricting access to some Discord channels and the Forum to only ‘Illuminati’ holding the minimum xCVP will lure self-selecting, relatively astute investors looking for a lot of data-driven signal, and minimal noise. Displaying expensively-sourced, well-analyzed data relevant to proposed initiatives and tracking outcomes achieved will also attract engagement. Focussed, rigorous (and entertaining!) Forum moderation to modulate/attenuate the signal/noise ratio will further encourage knowledgeable, sophisticated xCVP stakers to engage repeatedly. Rewards for successful proposals, for frequent voting and for voting patterns consistently supporting the most profitable positions over time are important too.

Team-based, more modular operational governance will allow the DAO and the protocol to adapt quickly despite its increasing size. Not everyone feels qualified to vote on every type of proposal. This is another reason why global voting participation rates can be so low. Delegation tooling, such as that provided by Orca Protocol, SquadDAO and others like Finance.vote extends the DAO organization further down, away from L1 gas costs, to support more specialised discussions and less formal voting. Finance.vote is a DAO developing much of the tooling necessary to address these problems. They are already conducting sentiment poll-based weighting adjustment trials on-chain. The Finance.vote whitepaper is worth reading.

The idea is to push as much operational decision-making as possible down into the SparkTeams, surfacing only technically-sound sub-consensus options on the Forum and as formal Proposals to the DAO only if and when required by the Rules of the DAO. (see DAO Charter & Organisation below)

Always ask: what is the worst that could happen?

Given the uncertainty, it is useful to imagine what could happen if the PowerPool DAO received NO guidance of any kind from xCVP stakers, i.e no one votes on anything. There is another military analogy from control theory. If an unmanned cruise missile in flight loses contact with, or suspects that its GPS locational signal is being spoofed, it switches to internally-stored terrain maps that input a ground-following path to the target, and randomises its choice of attack vector. Given that the PowerPool Treasury has a Management Board, all of whom have staked xCVP, the Management Board and a few 'anchor investors/LPs holding many of the Power Univese tokens should constitute a quorum for most voting, and effectively make it possible for the DAO to function with NO feedback from other xCVP stakers, provided that there is sufficient consensus among the members of the Management Board. Obviously that is not the ideal outcome, but allows effective operation in the worst case scenario. Anti-fragile!

Q-07.) How can we manage risks of some or all the details of our planned changes to shortlists and positions becoming public?

A-07.) This is going to be one of the distinguishing key capabilities of the PowerPool DAO. The PowerPool DAO will require development of specialised investment management governance platform capabilities, although other investment management DAOs may also use these capabilities to the extent they are incorporated into open-source platforms like Discourse and Boardroom.

What is the worst that could happen? The risks/gaming options scenarios from foreknowledge of DAO decisions are different for each shortlist:

  1. Existing pool shortlisted tokens - the complete listing of PowerPool whitelisted public pool tokens already launched like PPDEFI, BSCDEFI, etc. is always public, but 'decoy' tokens under discussion are usually be present on the shortlists, but with zero weightings. Discussions of proposed changes to the shortlist and the (re)-weightings are always conducted token by token. If someone proposes to add a token to the shortlist, it is possible that they and their collaborators may have already taken a big position long. But the DAO voting is confidential, the quorum and majority thresholds might not be reached, and the result announced only after at least a week delay, so a naked long, front-running position may be difficult for traders to finance large and long enough to profit. Also, the timing of DAO Treasury implementation is randomised, and sensitive to market conditions and fundamentals tracking.
  2. Proposed candidate tokens - there is no reason to ever release the complete listing of the candidate shortlists being tracked by the protocol. DAO Forum discussions will always be conducted on a token-by-token basis, and all shortlists are constantly in play. If someone proposes the DAO add a token to a given shortlist, it is possible that they and their collaborators might have already taken a big position long or short. But the DAO voting is confidential, the quorum or majority threshold for action required often will not be reached, and the results announced only after at least a one week delay. A risky insider front-running position would be difficult for traders to finance large and long enough to profit. If the DAO proposal to shortlist the token passes with sufficient quorum and threshold for action, the DAO Treasury would already be long, front-running the public announcement for at least a week, and the forward posture on the red-listed token may be either bull or bear Also, the timing of DAO Treasury implementation will be somewhat randomised, and sensitive to both market conditions and fundamentals tracking.

As opposed to taking risky positions trying to front-run the DAO Treasury, clever tipsters successfully promoting a token to the DAO shortlists via Forum discussions will be rewarded just for successfully making a compelling proposal, with zero risk and only their 1,000 xCVP initial investment, yielding a much better risk-adjusted return. The tipster will also receive their proportionate share of appreciation in the value of xCVP, with no ‘carry’ financing cost and other sources of rewards/yield still available. Driving up/down the price of the target token by front-running actually reduces the chances that the candidate token will be shortlisted within any predictable period of time.

The DAO has a key role in deciding how to manage these risks over time. PowerPool should follow the already regulator-approved example of TradFi active ETFs, which differ from fixed index-based passive ETFs. Most ETFs on the TradFi market are structured as passively managed funds, meaning they closely (and predictably) follow an underlying independent methodologist benchmark, like the S&P 500 Index. However, actively managed ETFs don't adhere to a predictable rebalancing strategy like their index-based passive counterparts; it’s up to the portfolio manager (the PowerPool DAO) to keep the active portfolio aligned with its stated objective. Active ETF issuance in TradFi started to evolve only in early 2015, following a historic decision by the US SEC (see References) when issuers and regulators agreed on a portfolio disclosure regime that balanced the needs of investors who want to know what they are investing in with the protection of the investment manager’s intellectual property (its portfolio holdings and active portfolio decisions).

Semi-public statements on the DAO Forum visible to xCVP stakers will be limited to 1-week  delayed, after-the-fact announcements of agreed changes to shortlist composition by adding or subtracting tokens, e.g. “PowerPool DAO decided last week to add Bancor to the holdings of its flagship fund”. Once some initial changes to the classifications of tokens already held (see migration strategy below) are made, we could gradually change weightings to eventually merge all existing overlapping long-only Ethereum vehicles like PIPT/ASSY/YETI etc. into a single, new, easier-to-market dynamically community-weighted ETH DeFi bull vehicle. Why have more than one?

In general, if the metrics and weights on the fund are dynamic and tuned by a recurring series of flash secret gas-free votes Forum only token by token, then anyone who knows the holdings of the fund still does not know whether the fund is bull or bear on particular token at any given point in time because they don't know how the combination of DAO sentiment and fundamentals tracking is moving the weights, or whether the token has been re-classified, until at least a week later. At any point in time, a bullish PowerPool fund could be buying or selling, and defensive, hedged bear funds could be moving collateralization/borrowing levels up or down, while red-listed tokens could be moving to either bull/long or bear/hedged lists.

All of this already exists conceptually in the TradFi US hedge fund industry for actively-manged ETFs to satisfy Regulators charged with enforcing the U.S. laws against insider trading (see historic SEC ruling ‘fine print’ in the References).

Q-08.) How to transition/migrate the existing public pool tokens like PIPT, ASSY, YETI to something more likely grow TVL/fees?

A-08.) The existing long-only ‘index’ products PIPT, ASSY and YETI are somewhat of a liability from the viewpoint of the ‘New Vision’. They duplicate holdings, mix long-only and more defensive tokens in the same pools, contain 'captive', unstake-able CVP, and overlap too much (all within Ethereum DeFi) to be composable, especially if another, broader and more hedge-able pool token like PPDEFI is introduced. None of these tokens has had the appeal to grow TVL/AUM significantly. Over time, under the supervision of the DAO and without slighting existing pooled token holders, these legacy product pools need to be deprecated.

The process of migrating existing PowerPool holdings from a plethora of poorly-communicated, overlapping, non-composable long-only pools (PIPT, ASSY, YETI) towards the New Vision will be a gradual process of engaging a new ‘beta version’ of Forum and Governance platform capabilities that systematically asks the DAO about existing holdings token-by-token to determine what the majority posture (and trends in that posture) towards existing token holdings is. Proposals can then be made to zero-weight holdings and/or move tokens between shortlists, to increase/decrease existing holdings via up/down re-weighting votes, etc. This process will allow PowerPool to test and refine the processes and systems that will be used in future to launch new pooled vehicles.

Once the first two thematic pools, BSCDEFI and PPDEFI are launched and the DAO is adapted to the new vision, the reconfiguration of holdings in the legacy pools PIPT, ASSY & YETI can begin as part of launching the flagship 'fund of funds' PPOOL. Initially, these outstanding tokens could be included in PPOOL to facilitate swapping, and the residual holdings managed progressively, starting with an airdrop/dividend of the included CVP to PIPT, ASSY & YETI token holders with encouragement to stake for xCVP and join the DAO. See more detail here

Q-09.) How do tokens end up on the grey defensive/bearish/short list, and what is done when they do?

A-09.) Most tokens that end up on the grey/short/bear list would have started on the red opportunities list. For any given token that starts off with insufficient breadth of listings across DEXes, lending sites, synthetics platforms and derivatives sites, achieving broad listings across multiple DeFi sites will progressively attract arbitrage/trading bots that will boost the target token liquidity and trading profitability. It may be that a token first goes from the red governance opportunities list to white bullish/long list, as PowerPool Treasury uses its own accumulated holdings to ‘prime the pump’ by LP-ing in selected DEXes and lending pools. Continuous monitoring of (lagging) fundamentals and a continuing downward trend in community flash-poll sentiment will, in the longer term, start to migrate some tokens to the grey-list, enabling the PowerPool protocol to begin executing defensive and bear-oriented strategies involving the grey-listed tokens. Once a token is shifted to the grey list, the PowerPool protocol could start to withdraw staked liquidity, aggressively borrow the token from any/all lending pools, buy inverse synthetics and pessimistic derivatives, then systematically sell all its holdings. Given the fragility of many of these cut-paste-copycat, (un)fair-launched over-incentivised tokens, it is likely that short selling by an investor the size of PowerPool will push the token value into freefall, boosting the NAV of the PowerPool Treasury NAV dramatically, especially if the overall crypto market is moving down at the same time. Gordon Gekko would be proud!

Q-10.) How can PowerPool DAO effectively go short on grey-listed tokens if they are not listed on lending sites?

A-10.) In TradFI, investment managers are required to lodge control of all their securities with custodians, and the custodians can supplement their income by lending out blocks of shares for shorting. In well-developed equity share markets, virtually any share can be borrowed and shorted at will. This is currently not true in crypto, because there are no custodians (other than CEXs) who allow shorts to borrow tokens other than stablecoins. This is one of the main reasons why crypto markets are still being rampantly manipulated, allowing meme coins and zombie ghost chain tokens like ETC to claim market caps in the billions. Coordinated PowerPool governance initiatives to broaden red-listed token listings/liquidity on lending sites is part of developing and executing future potential defensive bear strategies for crypto markets. Ideally, this will  be done just in time for the next bear market crash. Crypto markets are so levered and ‘rewards’ driven that the coming crashes will be severe, without the circuit-breakers used by stock exchanges. It is worth noting that run-ups to bull markets are gradual, and hedge funds make most of their gains during steep price crashes.

In order to get listings across DeFi sites, PowerPool DAO Treasury may first have to go long and initially act as an LP/lender of the red-listed target tokens, generally lending to arbitrageurs/bots who will appreciate the broadening range of listings being pushed by PowerPool across all kinds of DeFi sites. However, PowerPool DAO itself would not start to borrow/short red-listed tokens unless and until both DAO sentiment and fundamentals start to move against the token and it is moved to the grey list. The PowerPool DAO Treasury could be long a red-listed token to front-run the listings votes, and earn good lending or LP yield for years. However, if (when) the token turns out to be just an over-incentivized copycat, that token may never be moved to the whitelist for up-weighting (from zero) in the bull-only public pooled token vehicles.

Q-11.) Should we prioritise listing CVP on as many DeFi sites as possible; across DEX, lending, synthetics & derivative sites?

A-11.) Yes! CVP should be the first token on the ‘red list’ of opportunities to use PowerPool’s existing holdings in DeFi site governance tokens to influence other sites’ listing priorities. Multiple, broad listings for CVP across all types of DeFi (trading, lending, borrowing, synthetics, derivatives) attracts arbitrage and trading liquidity towards the CVP token. It also gives the PowerPool DAO Treasury maximum flexibility to long or short CVP to reduce its volatility and make it sought after as a widely-held and widely-listed (hedgeable) borrower collateral, playing a role in the future DeFi ecosystem similar to the historic role of the fiat Swiss Franc CHF in global financial markets.

Q-12.) What are the tokenomics of CVP/xCVP? How does CVP staking in return for xCVP work? Is xCVP also stakable in LP pools, and usable for collateral on lending sites?

A-12.) In principle, CVP is openly traded and currently has some vague intrinsic value somehow related to the fees streaming from pooled investment tokens already launched. The purpose of xCVP should be primarily to create a claim on a proportional share of the Net Asset Value (NAV) of the PowerPool DAO Treasury. Fees, rewards, gains/losses on sales, opening and closing long/short, synthetic and derivative positions in the DAO Treasury over time will change the DAO NAV and therefore the value of xCVP, a proportional claim on that NAV. Over time, the exchange rate between CVP and xCVP will deviate around an initial 1:1 exchange rate. The DAO should periodically report the NAV/xCVP value to alert the market if the price of CVP deviates too far from the NAV-based value of staked xCVP. This creates opportunities for arbitrageurs to buy CVP, stake for xCVP, wait the 1-week redemption period and redeem for the higher value of the Treasury NAV. It is important to set not only the xCVP staking/redemption fees, but also the xCVP redemption waiting period, low enough and short enough to allow arbitrage to keep the CVP/xCVP peg close, but not so short that the DAO voting can be gamed by buying and holding xCVP for only a few minutes in order to vote.

The early emphasis of community involvement and first priority is getting CVP itself widely listed, across DEXs, lending, synthetics and derivatives sites. This will draw arbitrager bots and boost liquidity, driving CVP value, and potentially CEX listings as well.

Q-13.) Why is the Swiss Franc fiat currency a good historical example for CVP?

A-13.) For various historical reasons, the Swiss Franc became the most widely-used non-reserve second currency in most post-war economies around the world. It’s role in global financial markets caused it to appreciate so much that ultimately the Swiss had to act aggressively to dampen its value and make it less attractive to global investors. The whole history of the Swiss Franc (CHF) in global investment markets is worth studying, because it sets a good example for CVP monetary policy as controlled by the DAO. Activist meta-governance voting power can be used to list CVP widely across DeFi, similarly to how CHF became widely-held and used as collateral. With DAO approval, the DAO Treasury could act to stabilize the CVP, sometimes hedging or buying, sometimes selling, and sometimes perhaps even burning CVP. Absent active management by the DAO Treasury, CVP should track the overall crypto market, hopefully repeatedly converging on the NAV reflecting the 2% management and 1% staking & redemption fees, which will rise and fall with total TVL/AUM across all pools/funds as more and more pools are launched.

CVP/xCVP itself could be positioned as a lower-volatility DeFi asset, uncommon in today's raging market which is currently too volatile, prone to mass liquidations of collateral and too highly-correlated across similar token categories for intelligent investing and risk management. Opening and closing CVP long/short positions in the DAO Treasury over time, together with many other activities, will influence the NAV of the DAO, and therefore the value of xCVP, a proportional claim on DAO NAV.

We would like CVP to become known as a less volatile, internally-hedged token that is ideal collateral for borrowing. The analogy would be the crypto equivalent of the fiat Swiss Franc, with more upside than stable coins, good on-going yield, tax and fee-efficiency, and less downside than DeFi tokens in general, reducing worries of xCVP collateral being liquidated during falling markets.

At any given time, the exchange rate between CVP and xCVP will deviate from the initial 1:1 exchange rate. It will be important to alert the market if the price of CVP deviates too far from the xCVP proportional share in the NAV of the DAO. This creates opportunities for arbitrageurs to buy CVP, stake for xCVP and then (following the 1-week redemption waiting period) redeem for the higher value of the Treasury NAV. It is important to set the xCVP redemption period around the same as the time delay on voting announcements, about 1 week. This is short enough to allow arbitrage to keep the CVP/xCVP peg close, but not so short that the DAO voting can be gamed by buying and holding xCVP for only a few minutes in order to vote.

Q-14.) How is the total voting weight of xCVP in the wallet(s) of an xCVP staker/LP/lender calculated against the minimum required to access the Forum, vote on proposals and participate in flash polls?

A-14.) One of the objectives of the new vision is to position CVP as a defensive, lower-volatility ‘Swiss Franc’ liquid asset token backed by the (hedged) NAV of the DAO Treasury. As a lower-volatility token, unstaked CVP should be well-suited for LPing on DEXes, and for use as collateral on lending sites. Because staked xCVP has a 1-week redemption period, it will not be acceptable as collateral on lending sites, but may be accepted for LP pools allowing trading and arbitrage between xCVP and CVP. Holding a tight CVP/xCVP peg to the hedged NAV of the DAO in the market should minimise risk of liquidations for those posting CVP as collateral. Given the value to the DAO of encouraging stakers of CVP on DEXes and Lending sites, it will be important to manage how to give credit to those staking CVP, or pledging it as borrowing collateral, rather than staking CVP as xCVP? What if their wallet contains only Uniswap V3 NFTs representing the LP deposits? How do we encourage LPing CVP to provide/maintain deep liquidity across multiple DEXes? The DAO Treasury itself will probably LP its own CVP with IL protection (e.g. on Bancor), but more liquidity in the form of CVP will need to be staked to maintain CVP listings across a wide variety of DeFi sites. How should the reported DAO Treasury NAV/token fully diluted metrics be adjusted to give credit in %NAV for CVP in LP pools and pledged as collateral on lending sites? (There are some incentivisation and accounting metrics issues here).

Q-15.) How are ‘exchange rates’ between CVP & xCVP calculated when staking with open market CVP, and when redeeming xCVP for open market CVP?

A-15.) The exchange rate CVP to xCVP is basically the ratio of xCVP = % share of NAV/CVP open market price. Similar to stable coins, at any given time, CVP could be trading slightly below, or slightly above the NAV value of xCVP. There are several internal accounting issues, one of which is how to denominate the DAO Treasury. As PowerPool is native to Ethereum, tracking NAV in both ETH & CVP is probably best. Staking CVP as xCVP is effectively buying a proportional share in the PowerPool Treasury NAV. Later unstaking xCVP for CVP is cashing out for the then equivalent value of CVP at the then market price. It is worth studying how Nexus Mutual does this with wNXM/NXM, because very large transactions can game the process somewhat. This is another reason for xCVP staking & unstaking fees and 1 week redemption periods.

Q-16.) Why does PowerPool no longer refer to pooled vehicles as 'indexes'?

A-16.) The index funds/ETFs that dominate traditional TradFi retail investment options were not invented primarily to solve the problem of pooled diversification. Anyone can ‘throw darts’ and select 10 securities randomly and gain most of the investing benefits of diversification with no fees. Indices and passive index funds/ETFs were developed primarily to facilitate low-fee passive management, and make possible estimates of active investment manager performance fees/bonuses for ‘beating the index’. In general, proper indices are calculation benchmarks intended to track the ‘beta’ movement of the overall market available to passive (no fee) managers. So-called ‘beta-tracking’ broad market indices enable estimation of ‘alpha’, i.e.  superior returns in excess of ‘beta’ tracking available via pure passive holdings.

PowerPool structures and operates actively-managed pooled vehicles, and it is 'owned' and managed collectively by the xCVP stakers via the DAO. To the extent that PowerPool is charging fees to manage these pools on behalf of public investors, it is technically incorrect to refer to the actively-managed pooled vehicles as ‘indexes’. Furthermore, proper indexes must be composed and maintained by an entity (the ‘Methodologist’) who is totally independent of the fund managers being evaluated relative to the benchmark. In TradFi, ‘index’ funds/ETFs are passively-managed funds that track an independently-managed index, and performance is calculated relative to this index. To call a pooled investment fund an ‘index’ just confuses everyone.

In crypto, the ‘beta’ or passive strategy is just to hold/stake the native coins of various chains, like ETH2. For neutral, high-yield Ethereum-based pools, the relevant benchmark is the staked ETH2 ‘risk free rate’ (rather than the US government bond interest rate) calculated as the average lending/borrowing rate available for liquid-staked ETH2 (currently about 8.5%). The performance of collective Ethereum-denominated bull/bear pools should start by holding only long ETH or short iETH (inverse ETH) synthetics. The same is true of BSC-native, BNB-denominated bull/bear pools, which should begin by holding only 100% BNB/iBNB. Deviations from the 100% weighting by introducing new tokens and varying their relative weightings over time constitutes active fund management that may (or may not) be worthy of management and performance-related fees, depending on outcomes achieved. Privately-managed hedge funds, including crypto hedge funds, typically charge 2% of assets under management (AUM=TVL) plus an incredible asymmetric 20% of upside performance fees. However, as noted above, as a collective DAO fund manager, charging asymmetric 20% performance-based fees to its own xCVP stakers would be a contradiction.

PowerPool has established a reputation for active management via the neutral high yield YLA product, but the naked bull, long-only (not) ‘index’ products like PIPT, YETI and ASSY have struggled (and will continue to struggle) to establish a coherent position in the market. These three PowerPool long-only ‘index’ products have indistinct holdings, and despite between 6-12 months on the market, have an average market capitalization of only about $US 3.0 million, and a daily trading volume of about $80,000. Continuing to launch more, similar products, or attempting to re-launch/prolong the life of these undistinguished, duplicative and non-composable products is not the answer.

PowerPool has achieved a lot, but the broader market does not yet really understand its products or where it is going. See, for example, this attempt by Coinmonks to review PowerPool. Even crypto-savvy journalists like Coinmonks could not find any coherent vision. Any journalist reviewing PowerPoint or its products should easily be able to find a one-sentence vision/mission/manifesto statement, like:

PowerPool is a DAO-managed crypto hedge fund offering broadly-diversified, actively-managed, rewards-rich, multi-chain family of gas-efficient pooled investment tokens easily blended by average investors.

Everyone involved in PowerPool should memorise the Vision Statement and repeat it often.

Using the proposed PowerPool DAO-governed process of curated shortlists and dynamic sentiment polling combined with extensive fundamentals tracking and rewards management to guide the the latest  Balancer v2 version of the PowerPool DAMM protocol should enable PowerPool investors to ‘beat the HODL’, i.e. achieve superior risk/volatility-adjusted returns compared to passive 100% ETH/BNB/etc. strategies that investors could easily do on their own.

Q-17.) How does free trading among all the Power Universe tokens work?

A-17.) PowerPool is implemented on top of Balancer v2, which is designed to manage pools of up to 8 tokens dynamically. Pools can be composed of other pools, which in turn can contain other pools. In order to allow Power Universe token holders to shape their own portfolios at minmum cost, while maintaining their TVL/AUM within PowerPool, it is proposed to allow swaps with the Power Universe to be free.

Q-18.) What are the advantages of creating a legal vehicle to represent the DAO?

A-18.) PowerPool will be marketed to institutional investors and their nominated custodians, for more detail on the proposed legal vehicle, please see here.