PTIP-83: PoolTogether V4 DPR Upgrade
The PoolTogether Inc. team, in collaboration with the Finance Team, has nearly completed the research and development for the V4 “Draw Percentage Rate” upgrade. We are now ready to begin rolling out the upgrade. In this post I’ll briefly describe the DPR, run through the rollout plan, and finally link to a POOL Snapshot vote that authorizes the Executive Team to upgrade V4.
The DPR is the final step in PT Inc’s plan to further decentralize V4. You can read more about the whole process in the PT Inc. Protocol Team Q4 2022 TBR.
Draw Percentage Rate
tldr; the DPR allows us to have large, infrequent prizes
Currently, prizes are awarded in daily draws. The Finance Team sets the total daily prize amount and how that amount is split across prize “tiers”. Each tier has a certain number of prizes, so the Finance Team may decide to allocate 10% to tier 0 (the grand prize) and 90% to tier 7 (where there are 128 prizes).
The problem with the current model is that we can’t allocate a portion of the yield to more irregular prizes; to prizes that may occur once per week, for example. This limits our ability to have giant “headline prizes”.
The upgrade improves on this by introducing the draw percentage rate. The DPR adjust the odds of prizes occurring to ensure that, on average, the prizes will match the expected returns. This is best illustrated with an example!
Let’s say:
- Prizes are allocated in daily draws
- The TVL for a prize pool is $1m
- The total prize amount is $10,000
- The DPR is 0.000274
The Draw Percentage Rate tunes the prize odds so that the daily prizes approximately equal the expected returns.
Expected Returns = DPR * TVL
Expected Returns = 0.000274 * $1m = $274
The total prize amount is $10,000 so we can calculate the odds adjustment like so:
Odds adjustment = Expected Returns / Total prize amount
Odds adjustment = $274 / $10,000
Odds adjustment = 0.0274
This means that the odds of all prizes will be scaled by 0.0274. The daily grand prize will only occur every (1/0.0274) or 36.5 days.
The added benefit of the DPR is that prizes will adjust based on the TVL. As long as the underlying yield APR remains the same, the prize distribution needs to be adjusted far less frequently.
Rollout Plan
We’re going to roll out the upgrade progressively, in order to minimize risk and ensure there is minimal disruption to prize claiming. The upgrade may cause delays in the ability to claim, but it will not stop prize distribution.
Note that these dates are tentative! If there are roadblocks we will progress more slowly, and if the rollout progresses smoothly we can move faster.
| Date | Description |
|---|---|
| January 3rd | Finance Team finalizes new prize distribution utilizing the DPR |
| January 3rd | Avalanche V4 deployment is upgraded to use the DPR |
| January 5th | Ethereum V4 deployment is upgraded to use the DPR |
| January 9th | Polygon V4 deployment is upgraded to use the DPR |
| January 11th | Optimism V4 deployment is upgraded to use the DPR |
Vote
This is a protocol-wide upgrade that requires the authorization of the POOL token holders. Because the Executive Team is acting on behalf of the POOL holders, we will conduct a gasless Snapshot vote to signal approval of the upgrade. If you hold POOL tokens anywhere, then please vote!
Summary
We endeavour to make this upgrade transparent, seamless, and valuable. If you have any questions about the concepts or process please don’t hesitate to comment below.