PEP-08: Upgrade Module End-of-Life Strategy

Abstract

As part of the Project Miró upgrades of PIP-56, the DAO voted for the introduction of a new token with only sePSP2 as a staked version of the token. As a preparation to the upcoming removal of sePSP1 and the additional incentives for sePSP2 migrators, this proposal seeks to loan a final amount of PSP from the DAO to serve as a buffer for the module prior to its removal.

We are requesting this proposal to be classed as an Express proposal to better align the timeline with the upcoming release of Project Miró, for which the timeline of a standard PIP would be too lengthy to release the changes on time. No PSP or other treasury resources will be spent, and once the new token is out, all remaining reserves will be unstaked and returned to the DAO treasury.

Goals & review

The ParaSwap upgrade module was introduced in PIP-28 as a way for sePSP1 holders to be able to move to sePSP2 by adding ETH and not waiting for the withdrawal request time.

As the upgrade module just matches the sePSP1 given to it with PSP, it does not ‘spend’ any PSP. However, since it needs to wait to unstake the sePSP1 amount before being able to accept any additional upgrades, there is a buffer period in which the budget decreases, after which future stakers have to wait until the buffer renews again.

Since, as outlined in Project Miró, there will not be an sePSP1 equivalent token, we experience the upgrade module to both experience increased demand and have its end-of-life. This proposal aims to prepare the upgrade module to migrate all of the remaining sePSP1, as well as return the funds to the DAO once it is not needed anymore.

Means

1. Loan of PSP for Ethereum mainnet’s upgrade module from the DAO treasury relative to the amount of sePSP1 on mainnet at the time of proposal execution not covered by the current budget (approx. ~70M PSP)
2. Loan of PSP for Optimism mainnet’s upgrade module from the DAO treasury relative to the amount of sePSP1 not covered by the current budget (approx. ~8M PSP)
3. Depreciation of the upgrade module, unstaking and withdrawal of all PSP. This PSP is will be sent back to the DAO treasury to prepare it for its migration to the new token
4. The duration of the loan will be no longer 120 days, after which if the module is not offboarded a follow-up proposal will have to be suggested.

Implementation Overview

The implementation will just require the funds be sent to the respective upgrade module wallets. After receiving the PSP, the upgrade module is already live and managed by the Governance Committee , so no additional management is needed from the DAO side.