PTIP-89: Sunsetting PoolTogether V4

Simple Summary

This proposal outlines the plan to wind down PoolTogether V4. The proposal requests the Executive Team to pursue their mandate to execute updated parameters for the balanceCap and Draw Percentage Rate, effectively sunsetting PoolTogether V4.

In addition to this vote, several teams (namely the Exec Team, PoolTogether Inc, Generation Software, and Pooltime) present their coordinated efforts to support users with the migration to PoolTogether V5, ensuring a seamless transition with the aim of making users feel whole.

Abstract

This proposal will bring the sunset of PoolTogether V4 in motion. It calls on the Exec Team to pursue the sunsetting of PoolTogether V4 and use their mandate to:

• Set the balanceCap parameter to zero: This parameter effectively avoids new deposits.
• Execute new DPR parameters to set the effective prize rate to zero: The updated parameters will avoid the distribution of prizes.
• Withdraw all V4 prize liquidity back to the protocol treasury on Ethereum

The proposed transition aims to optimize PoolTogether’s resources, reduce ongoing maintenance costs, and enhance the prize experience for V5 users.

For transparency, the extended action steps of our migration plan are listed in detail on the forum.

Motivation

PoolTogether V5 is live and requires the community’s focus and attention.

Contrary to V5, the system of PoolTogether V4 requires maintenance, like balancing prize liquidity between chains or managing prize distribution. Every prize draw is a cost to the protocol treasury as the RNG needs funding and the results have to be bridged to all chains PoolTogether V4 is live on.

Additionally, PoolTogether V4 still locks up substantial resources:

• $5.5M in TVL
• $170K in prize liquidity across Optimism, Avalanche, Polygon, and Ethereum
• 20k $OP in unclaimed incentives

By winding down PoolTogether V4, we can capture a portion of its TVL in V5, save costs on infrastructure and maintenance, remove old dependencies, and free prize liquidity. As a bonus, the sunset of V4 unlocks unclaimed OP incentives that can be repurposed to contribute to the growth of PoolTogether V5.

Specification

Overview

This proposal doesn’t require POOL token holders to take any onchain action. All necessary actions can be carried out through the existing mandates of the Execution Team. By voting for on this proposal, POOL holders are requesting the Executive Team to pursue their mandate to execute the above-mentioned protocol parameters.

Please visit the the forum to review the full migration game plan.

Rationale

The rationale behind this proposal is rooted in the financial overhead associated with V4's maintenance. The treasury shoulders expenses related to RNG costs, bridge operations, transaction fees, and ongoing work. These costs can be redirected to support the growth and development of the V5 ecosystem.

At the same time, it’s crucial to make the users of PoolTogether V4 feel whole. Before this proposal was drafted, a Request for Comments was presented on the forum. The Council got together to consider and discuss the possibilities at hand. PoolTogether’s team of teams came to the conclusion that our problems are best solved by replacing the PoolTogether V4 App with a Migration App. The new migration app will continue to provide anyone with access to their V4 funds going forward.

Several teams have coordinated their efforts to ensure the best possible migration experience.

This protocol does not yet present a way to cleanly deprecate the prize pools. As a community, we still need to figure out what happens with future yield that is being generated, by any TVL we are unable to migrate. We will have to revisit this topic soon. If you have any ideas or suggestions, please feel free to share them.