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Pool Staking? Joint Statement from Prism Network and SoMee

June 17, 2021

Boosting is not for everyone. It’s a leveraged choice for stakers. There needs to be a barrier of entry. It would be silly for Prism to charge $50 for someone to boost and add x2-x4 their stake. That'd also be counterproductive to the entire pool. This is a competitive space; the more you stake, the more share of the rewards you receive. To allow someone to boost a small amount and increase their share wouldn't offer competition. It makes much more sense to have a higher barrier of entry to the higher boosting levels. This makes it more well-rounded for both users and the platform.

It's just like with trading: you have the option to trade between spot trading or futures; with crypto, you can stake or boost. Of course, futures and boosts are speculative by nature as they depend on many factors, not least of which is the asset's value when the staking period is over. The point is, there is no guarantee - that's why it's speculative. It's competitive. It's meant to give you a bigger piece of the pie. Simple as that.

Even if you boosted at a lower stake amount, you haven’t lost any money; you have purchased to increase your effective stake and share of the pool, which is evident and can be easily seen from the smart contract itself. So, even if you only staked 500 $SOMEE and paid your boosting fee, you are still increasing your share % on the pool. Simply put, you have not lost any money, and you have not been scammed or shafted in any way. The Prism staking guide clearly defined an example of how it boosts work and how it affects the pool.

Here's a brief example of that:

Pool: TEST/ETH -> 3,000 TEST (Duration 30 Days)

In this Pool, users would input TEST/ETH LP Tokens and farm TEST tokens over a period of 30 days. This means that every day ~100 TEST tokens (3,000 / 30 = 100) are distributed as rewards to stakers.

UserA input 1 TEST/ETH, they would be farming 100% of these yields (after all, only UserA is in the pool).

So, every time it pays out, they receive ~100 TEST.

If UserB joins with 1 TEST/ETH as well, from then on, both UserA and UserB will be splitting the yield 50/50 as they both own 50% of the total stake

Both receive ~50 TEST.

Now, UserC comes along and joins with 4 TEST/ETH. They would own 4/6 TEST/ETH in the Pool (there's 6 ETH in the pool [UserA = 1, UserB = 1, UserC = 4]) which is ~66.66% of the total stake.

Each day, they would be earning 66.66 TEST tokens. The others would split the remaining ~ 33.33 TEST tokens.

In the below animated GIF, you can see how the various amounts staked can affect the overall share distrobution for all users involved. You can also ee what happens when a BOOST is applied. For smaller amounts of share, the boost doesn't really affect the overall value that much (notice the slice on the pie chart doesn't change much). But, for larger shares, the boost really has a large affect. This boosting keeps the pool competitive, and allows stakers to have a large share of the pie. Take a look:

Before staking, you should watch a tutorial or read a guide. That way, you make an informed decision on your own actions. Prism Network has gained the wisdom to upgrade their UI and acknowledged that they could better display the visuals and data in the staking dashboard to give users a better experience. And, SoMee has learned that sometimes, we can be too technical - and we should remember that users, no matter how experienced or inexperienced, can often offer some great advice on how things are displayed.

To that end, it's important that YOU, as a user, also do your diligence before purchasing any boost. Boosts are, after all, non-refundable. Boosts increase your share and stake. There sometimes is a misperception that users want the boost to do something that it isn’t designed to do: boost the value. Boosting is only designed to boost your share and stake, ergo, give you a bigger piece of the pie.

Boosting is a speculative optioned leverage on the Prism pools that gamifies them. Prism has over 33 pools across 3 chains on the Prism Network, and never has anyone had an issue with how boosts work because it is clearly defined as a boost of your share and stake.

Prism will upgrade their UI to make sure boosts now show an increase/decrease in pool share, rather than say (x% boost). That way, there is more clarity and real-time visuals on the dashboard that shows how the boost has boosted your share, rather than you having to calculate it manually.

Prism is working closely together with the SoMee team to make this a great experience for everyone. This is the first time they have encountered these types of issues with any of their stakers from various and multiple communities. And they have taken your experience seriously and are adjusting the way they show this data across their entire UI.

But, it is very important to remember the following:

A small stake will yield small returns irrespective of any boost or boost cost that you paid.

Naturally boosts would be more cost effective and beneficial to higher value stakes.

Spending $500 to boost 0.1% of a pool is a terrible financial decision. It makes little sense to spend a huge amount of money when it simply cannot boost that small amount enough to be effective.

BOOSTING IS NOT AN INVESTMENT; you are not investing in the pool; you are purchasing to receive a higher share of the pool. That's all. There is no guarantee of any return on a purchase. Why? Because it's a service. You cannot expect a Return on Investment on a SERVICE. This gives you a better competitive edge in the pool. Nothing more. Think of it as paying the chef for a bigger piece of the pie and reducing the amount that others receive.

Boosting provides you with a higher share allocation relative to your stake. Here's an example of why boosting is so useful:

  • If you have $10 staked and spend $400 to boost. You have spent $400 to turn $10 into $20. That’s not smart at all. You effectively spent more to do very little. That's like hiring a team of doctors to cure a hangnail. If you wouldn't do it in real life, why do it with cryptocurrency?
  • If you have $1,000 staked and spend $400 to turn $1,000 into $2,000. That’s a lot smarter. Unlike the above scenario, you gained far more than was purchased.
  • if you have $10,000 staked and spend $400 to turn $10,000 into a $20,000 stake. That’s even smarter, as it's even MORE of a benefit and leverages your purchase so much more.

So remember, the more you boost, the bigger the piece of pie you receive. If you are purchasing MORE than what you have staked, that makes very little sense. Why pay for a Ferrari when a Toyota will do? But, if you have a fairly good amount staked, why not spend on a boost? After all, that purchase will give you far better benefits than simply not staking at all. Either way, you are staked and receiving a reward. Boosting just gives you a bigger share of that reward.

As always, please remember to read all the guides given to you, read about staking, what liquidity pools are, and boost pools BEFORE you spend your money. Always make INFORMED decisions. Never just 'guess.'

To read more about boosting, check out Prism's post:

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