# 🏖️  Pools

DN404 tokens are inherently designed to carry a high value. On one hand, investing in a Vault requires at least one whole token, necessitating a decent amount of capital.&#x20;

For _"scalper"_ investors who may not wish to commit such a level of capital, we have designed Pools that allow individuals to pool their capital for collective investment.

### Wait- Why pools are needed, despite DN404's are fungible by its nature?

Of course, one can swap sub-integer amount of DN404 from AMMs to invest in it.  Pools are rather focused in "scalpers" who want to invest through [vaults](../concepts/vaults) with less capital.

## Structure of a Pool

Anyone can create a pool to raise funds to afford a DN404 token. Funds are raised in WETH. Following informations are required to create a new pool:

* **Target Token**: specify DN404 tokens.
* **Total Cap in ETH**: specify the total raise amount in ETH
* **Strategy**: specify the strategy after purchasing a DN404 token.
  1. **Vault**: Let our vault automatically farm the rarer trait, sell it, and distribute the earnings to the pool participants.
  2. **Manual**: Let pool participants control it by their own. We may offer a simple Governor module to control the DN404 token in the pool by voting with their shares.
* **Min Cap Per Participants (Optional)**: specify the minimum required amount for anyone to join a pool to control the no. of participants, if needed

#### Depositing to a Pool

Anyone can deposit their WETH to join a pool. As they deposit a fund, they get _pool share token_ pro-rata to the amount they deposit.

Pool share token is a ERC20 token that being created for each pool. It can be seen as a LP token for each pairs in AMM, or fractionalized share for DN404 tokens owned by a pool.

#### Purchasing a Token by a Pool

After raising a target amount, the target DN404 token is being automatically bought from Uniswap V3 for a pool. The bought token is being locked up in our pool contract.

#### Pool Governance

The pool participants can create a proposal to control the use of funds/tokens in a pool. The pool share token is being used as the voting token. A proposal can be one of followings:

* Transfer Funds To an Address
* Transfer DN404 Tokens To an Address
* Liquidate a Pool

#### Liquidation

A pool can be liquidated if (1) the vault has finished it’s own job or (2) upon receiving votes from its participants.

The funds are distributed back to participants on a pro-rata basis according to their shares. However, if a pool holds an NFT, the tokens will be sold on Uniswap V3, and the proceeds will then be distributed.
