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Free Memberships

Subtitle
Exchanging stake rewards for services
Date
Aug 21, 2021
Type
Notes
Words
460

Pool Together

My (perhaps flawed) understanding:

  • You lock your Ethereum into a "stake pool" (a shared account)
  • Yield farming happens (an algorithm invests your ETH with the best returns)
  • There's a weekly lottery, where those staking can potentially win the interest gained
  • At any point, you can unlock your Ethereum, meaning:
    • You have a chance to win a lottery without losing any principal
    • This is why it's called a "No-Loss Crypto Lottery"

Whoa

  • "Pool Together," the company behind this, is VC-backed, and doesn't take a fee
  • There is almost $200 million of locked Ethereum, generating $100,000 a week
  • The locked amount is 2,000x the prize
  • It's interesting how such a massive pool of money can quickly accumulate when you remove risk from the equation.

Free Membership

Here's a variation stemming from this idea.

People can "park" their money in a DAO set up by a company. Could it count as an expense or a write-off? In either case, the staking profits act as capital for the company to use. The investors, instead of receiving a lottery, or staking rewards, earn a "secondary" token that is minted by the company. This token can be used to claim services for the company.

This points to a weird future, where we have our money safely parked in several companies, instead of a single bank account. Imagine having $1,500 staked in Notion, $6,000 staked in LA Fitness, and $50,000 staked in Honda. The point is, they're keeping your staking rewards, while you get to access their products for free. You can take back your capital at any time, when you no longer need to use their products.

This is a thought experiment around a flipped paradigm. It's almost like owning a stake in the company instead of renting through a membership. It's a model where, as you accumulate capital, you always have access to it. Instead of permanently spending on memberships, you're lending the rights to your interest.

Napkin math

  • 10,000 users x $100 a year = $1m rev
  • 10,000 users, staking ~$1.4k a year = $14m staked at 7% yearly return = $1m rev

Notion Example

Instead of paying $100 a month for a service (Notion), you stake $1,500 in a "Notion DAO" - the idea is that my staking rewards go to the company. As long as I'm staking, they're making the same amount of money from me, and I'm accessing it for free. Whenever I'm done using their service, I can pull my full principal out ($1,500). I got to use their product while it was relevant, and I paid nothing for it. Seems like a win-win?

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