PowerPool protocol history
July 2020

The concept of meta-governance as a phenomenon for accumulating voting power in third-party protocols and managing it using the proxy token was introduced.

Aug 2020

The foundations of the meta-governance concept and the idea of how to build it using a lending protocol were published. Afterward, the PowerPool idea received support and recognition in the form of a Polygon(Matic) grant.

PowerPool announced its project launch without traditional VCs or investors.

PowerPool used the classic liquidity mining approach of distributing tokens to LPs and also distributed small portions of tokens to known Defi community members (named as “testers”). The list of testers includes Delphi Digital, Defi Dad, Meltem Demimors, and many other notable people and entities.

The lending market was deployed on the xDAI (now Gnosis Chain) and Matic (now Polygon) networks and was tested.

Sep-Oct 2020

The meta-governance idea attracted interest from Cointelegraph, the PowerPool team was interviewed regarding the idea and its implementation.

The first governance proposals on gov.powerpool.finance was published. The PowerPool protocol updated its vision to an ETF-like basket of tokens ‘Power Indices’ after Delphi Digital’s proposal was supported by the community.

Based on this decision, the team started developing a smart basket of tokens on top of Balancer v1 and faced on-chain automation problems for the first time. The idea to use tokens from a basket for (a) governance (b) yield-generation in third-party contracts required us to develop an asset manager for the AMM and to ‘find’ somebody who will sign transactions and call contracts in a reliable and trustless way.

As a result, PowerAgent (legacy name: Power Oracle) was launched. In the next few months, we decided to expand the concept and make Agents send transactions not only to update TWAP prices in Oracle, but also to execute other contracts. According to it, we renamed Power Oracle into Power Agent since it started to carry out the function of a fully-fledged on-chain automation network.

November-December 2020

After one month of limited cap testing, Power Index (PIPT) was launched with a structure that was influenced by the Delphi Digital proposal; PowerPool achieved $17m TVL in PIPT.

Shortly after that, Ryan Watkins from Messari proposed YETI (Yearn Ecosystem Token Index).

Pioneering the concept of an asset manager for Balancer v1 that could use tokens outside AMM was developed for building yield-generating indices.

PowerPool received a new level of industry recognition: PowerPool was featured in Paul Veradittakit’s newsletter, Binance Research, Cointelegraph, Messari, and Bankless.

The most important spotlight of PowerPool and $CVP was PowerPool’s feature in the Messari Crypto Thesis 2021. PowerPool was cited multiple times in that document, including in the general 01: Top 10 trends category:

Well, with maker (crypto dollars), Uniswap (automated market making), Compound (liquidity mining), Balancer (dynamic liquidity pool rebalancing), YFI (smart asset management), AAVE (flash loans), ChainLink (data oracles), SushiSwap (defensive countermeasures), CVP (proxy aggregation), and bZx (decentralized bug bounty protocol), we've got examples of the building blocks needed to power a fully decentralized and algorithmic financial system. (More on all of these later in the report.)

and in 06: Defi Money Legos category

I'm most interested to watch the evolution of PowerPool's CVP (the "concentrated voting power" token, basically a proxy service for accumulating DeFi voting power) and Aragon (the original DAO manager) because there is a LOT of money on the line. It's not just governing monetary policy and protocol parameter changes, either; we're going to see more in the realm of protocol M&A

Q1 of 2021

After the PIPT and YETI release, the third and fourth PowerPool index baskets were proposed: the ASSY (AAVE SUSHI SNX YFI) index by Marc Zeller from AAVE and the yToken index (a basket of Yearn.Finance yield-generating Vaults) by MilkyKlim, the core Yearn developer; Later on, this product became widely known as Yearn Lazy Ape (YLA).

These two products had a unique feature: both of them required on-chain automation and offered new functions and a higher yield to the end user because of it.

The ASSY index featured Dynamic AMM - a Balancer pool with weights changing according to the market cap of assets and SUSHI asset manager.

More information: DAMM and automated Wrapper&Router staking architecture for Balancer pool. This is the first article that was published that explored PowerPool’s on-chain automated strategy with implementation details (additional info and links to contracts are here).

After launching YLA, the Yearn.finance treasury deposited $250k into YLA.

PowerPool products were featured in How to Defi (Advanced) by Coingecko. PIPT was named the “cheapest option” (by fees) for index investors. The protocol income strategy and fee structure are mentioned as the “most diversified” among competitors.

In order to simplify the user experience and reduce their costs, PowerPool developed ZAP allowing LPs to supply/withdraw funds for 68 times cheaper than the average cost. It was 100% subsidized by the PowerPool DAO.

Q2-Q3 2021

The proposal for expanding PowerPool to Binance Smart Chain (now named BNB Chain) was published. YLA was updated to v2. The new vision for the protocol's future was published. Other launched products included xCVP and BSCDEFI (with PancakeSwap support).

PowerPool was featured as Balancer v2 launch partner in their blog and was announced on the ETHCC main stage.
Fernando Martinelli, Balancer CEO shared his thoughts regarding PowerPool’s groundbreaking idea for asset management.

Q4 2021

Strategic research and development: multichain expansion, the “Curve wars solution”, the LUSD pool with two automated asset managers on Balancer. The project started to undergo evolution from “indices” and baskets to generalized automation network infrastructure.

Q1-Q2 2022

PowerPool focuses on PowerAgent v2 (a decentralized task specific automation network) design & development, PowerPool Research division, and delivering complex Defi products such as LUSD Balancer v2 pool.

PowerPool launches ppTORN Vault: an auto-compounding strategy for tornado.cash $TORN governance staking.

JUNE 2022 - Thoughts, reflections, conclusions

Analyzing the last 2 years we made a conclusion that it is still too early for most Defi investors to favor sophisticated diversified token baskets/indices. To date, all existing Defi baskets/indices hold a tiny percentage of their underlying assets’ circulating supply. This metric was ᐸᐸ1% even on top of the market bull phase.

PowerPool’s capital acquisition results for ‘index’ basket products were as follows: $PIPT reached $16m TVL, other indices ($ASSY, $YETI) approximately $10m, BSCDEFI $1.7m.

The automated stablecoin yield $YLA (Yearn Lazy Ape) product reached $15m without any significant marketing, generating ~17% of pure stablecoin yield for LPs during the first year of operation. It was achieved by smart automation of multi-layer Defi products with a very high degree of reliability (not even a single bug or tech issue during >1y of operation). However, the short-term de-peg of constituent stablecoin (USDN) coupled with overall market fear after the UST collapse caused massive liquidity outflow.

Despite a large number of technical and ideological innovations, it's still not a very significant TVL for the Defi market.

But what’s a really significant outcome of our continuous work over almost 2 years is the automation of on-chain strategies, and approaches to do it in a robust and decentralized way.

Indeed, a closer look at modern web3 (DeFi,NFT, Metaverse, DAO, etc.) demonstrates that all of it comes down to 'a lot of on-chain automation'. It includes almost every service or solution built on top of other protocols such as Uni v3 position management, Vaults, strategies, even Bal v2 asset managers, collateral management, options, limit orders, etc.

Accordingly, our near-term focus is primarily on the development and adoption of our Power Agent automation network, deploying it to different chains, and then creating rather not indices, but automated products on top of it with simpler design. When the market is ready, we will deliver more complex automated indices solutions given our experience.

You can find detailed analysis in our article PowerPool/PowerAgent Roadmap Checkpoint: 2 years.

Q3-Q4 2022

The roadmap for project development in 2022:
- PowerAgent v2 release on Ethereum, Aurora, and other EVM-compatible chains;
- LUSD Balancer v2 pool launch;
- TORN Vault V2 launch;
- Establishing partnerships for providing automation services to first DAO-clients.