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
FeatureCase 1: Fixed PoolCase 2: Variable Pool
Total Token AmountFixedFlexible (with cap)
Contributor IncentiveRelative PerformanceAbsolute Contribution
Treasury PredictabilityHighMedium (buffered)
Communication SimplicityHighMedium (requires story)
Dynamic IncentivizationLowHigh

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
FeatureCase 1: Fixed PoolCase 2: Variable Pool
Total Token AmountFixedFlexible (with cap)
Contributor IncentiveRelative PerformanceAbsolute Contribution
Treasury PredictabilityHighMedium (buffered)
Communication SimplicityHighMedium (requires story)
Dynamic IncentivizationLowHigh