Dynamic Pool vs. Fixed Pool
✍️ Narrative Explanation
Two different logics can be applied when using TPs to distribute other Organizational Tokens, one is a fixed logic while the other is dynamic. In a Fixed Pool logic, tokens are like slices of a pie — no matter how big or small your effort, you get your fair share based on how much others contributed too. In a Dynamic Pool logic, tokens are more like fruit on a tree — the more ripe your contribution, the more fruit you pick, up to a seasonal limit. One is about equity among peers, the other about individual alignment with potential.
🧮 Case 1: Fixed Token Pool (Proportional Split)
How it works:
- Org decides in advance the total amount of $ORG to be distributed (e.g. 500).
- Each participant receives a proportional share based on their TPs.
- Total TPs: 10,000
- Individual_A TPs: 2,000
→ Individual_A receives (2,000 / 10,000) × 500 = 100 $ORG
Pros:
- Predictable for treasury planning.
- Guarantees full distribution of intended amount.
- Easy to explain: everyone gets a slice of a known pie.
Cons:
- May inadvertently dilute standout contributions (e.g. a high performer gets the same % even in a low-performing group).
- Can’t reward absolute contribution strength — only relative.
Game Theory Lens:
- This is a zero-sum game: your gain is someone else’s loss.
- Participants are incentivized to maximize their own share relative to others, possibly leading to:
- Strategic downvoting (if trust input is peer-based)
- Over-claiming contribution
- Reduced incentive to collaborate, since you’re competing over a fixed pie
Behavioral Risks:
- Can foster scarcity mindset or subtle competition
- May lead to contribution inflation or social gaming
- Doesn’t reward collective effort — only individual rank
When it makes sense:
- When total budget must be strictly fixed
- When trust input is externally calibrated (not peer-rated)
- In mature orgs with clear performance baselines and trust in fairness
📈 Case 2: Variable Token Pool (Token Follows Trust)
How it works:
- Org sets a monthly expectation (e.g. 500 $ORG) and holds a reserve (e.g. 600 $ORG).
- The actual amount distributed is proportional to absolute TPs earned, not a fixed pool.
- A higher-performing round triggers more tokens to be distributed — up to the reserve cap.
Example:
- Baseline expectation: everyone earns 3 stars → 10,000 TPs → ≈500 $ORG
- This month:
- Individual_A earns 4 stars = 2,200 TPs
- Total group earns 10,200 TPs
- Individual_A gets (2,200 / 10,200) × 600 = 129.41 $ORG, but since the cap is 600, they get 110 $ORG and total outflow is 510 $ORG
Pros:
- Rewards absolute contribution level, not just relative standing.
- Encourages high performance — tokens "follow" effort.
- Unused buffer can roll over or signal under-engagement.
Cons:
- Treasury outflows are less predictable (though capped).
- Harder to message to contributors and finance teams.
- Risk of creating a perceived “performance-pressure” dynamic unless clearly communicated.
Game Theory Lens:
- This creates a positive-sum game (up to the cap): if everyone contributes more, everyone can receive more.
- Encourages collaboration and group uplift, since increased collective effort leads to higher shared rewards.
- Reduces the incentive to game peers, since you're not directly taking from someone else's slice.
Behavioral Benefits:
- Rewards intrinsic motivation and absolute contribution
- Encourages team alignment, especially if the group knows the budget cap and can aim to collectively “unlock” it
- Makes overperformance feel meaningful and visible
Risks and Design Considerations:
- If cap is too low, it can dampen motivation (“why try harder if I won’t get more?”)
- If cap is too high, it can lead to budget creep
- Needs careful storytelling to avoid “gamified performance pressure”
When it makes sense:
- In creative or mission-driven teams where collaboration is key
- When trust signals are based on peer appreciation or mutual recognition
- In DAOs where budget flexibility is acceptable and participatory incentives are core
✅ Summary Table
Feature | Case 1: Fixed Pool | Case 2: Variable Pool |
Total Token Amount | Fixed | Flexible (with cap) |
Contributor Incentive | Relative Performance | Absolute Contribution |
Treasury Predictability | High | Medium (buffered) |
Communication Simplicity | High | Medium (requires story) |
Dynamic Incentivization | Low | High |