Governance 101 🌊🏆
Control of the PoolTogether Protocol rests solely in the hands of the community holding the POOL tokens. This is a revolutionary new way of organizing and it takes some education. The post explains how governance works.
How Governance Works
Changes to the protocol are submitted as governance proposals. Anyone who either holds 10,000 POOL tokens (0.1% of total supply) OR has 10,000 POOL tokens delegated to them can submit a governance proposal. Once submitted governance proposals are voted on for five days. After five days, if the majority of votes are in favor AND at least 100,000 votes have been cast in favor, the proposal will pass. There is a two day “timelock” before the proposal is actually implemented.
What's a PTIP?
PTIP is short for PoolTogether Improvement Proposal. A PTIP is a proposal to signal or effect change to PoolTogether’s governance or products. The objective for a PTIP is to engage the community so that we can come together on a decision regarding a specific topic and put it into action. It must be a complete proposal that is clear, concise, and unambiguous. Organizing the proposals in this way makes it easy to track and discuss changes to PoolTogether.
Who can submit a proposal?
Creating a proposal requires 10,000 POOL in total. Anyone who either holds 10,000 POOL tokens (0.1% of total supply) or has 10,000 POOL tokens delegated to them can submit a governance proposal.
When does a proposal pass?
Once submitted governance proposals are voted on for five days. After five days, if the majority of votes are in favor AND at least 100,000 votes have been cast in favor, the proposal will pass. There is a two day “timelock” before the proposal is actually implemented.
PoolTogether governance exists on the Ethereum blockchain and is not limited to the Pooltogether.com website. There will be many different interfaces you can use to view governance proposals and vote. However, it will also be supported on the “Vote” tab of app.pooltogether.com. Whenever a proposal is live, you can cast a vote there.
If you hold POOL tokens but don’t want to actively participate in governance you can delegate your voting power to others. This action keeps the POOL tokens in your wallet but allows someone else to vote for you.
If you’d like to have more voting power, you can announce yourself as a Delegate on Sybil.org and then others can delegate to you. This is a great way to have a bigger voice in governance.
What Proposals Do
A proposal can be submitted to do anything but practically speaking, proposals will likely center on a few main topics.
Controlling governance managed prize pools
The governance managed prize pools are the ones that display on app.pooltogether.com. Some parameters on these prize pools are very simple to change, for example, adjusting the number of weekly winners or changing the frequency with which prizes are distributed. We expect proposals will be submitted to adjust these parameters.
The community has expressed desires for new no loss prize pools with different asset types or special rules. A prize pool using Tether as the deposit token could be created or a prize pool that only lets wallets deposit a fixed maximum. Governance proposals can be submitted to create new governance managed prize pools with different variations
Deciding governance managed prize pools
All prize pools are generated by the prize pool builder. The prize pool builder is fully “permissionless” meaning anyone can use it to create a new prize pool or add a new yield source. However, a certain subset of prize pools are managed by governance and can receive POOL depositor rewards. Governance serves the function of deciding which prize pools should be governance managed and endorsed by the protocol.
Distributing the POOL token
The broadest category is controlling future distribution of the POOL token. As more people contribute to the protocol by depositing, referring deposits, developing the protocol and other activities governance should continue to distribute control of the protocol to these people. Practically this can look like a referral rewards program, a grants program, a deposit reward program, or direct transfers!
This post serves as an overview on the types of proposals we expect to see. If you would like to submit a proposal, the best place to start is by discussing it in the governance forum or our community Discord.
1. Forum post
All major discussions must start on the governance forum in the form of a PTIP:
- The topic must follow the name “PTIP-X” where X is the next largest PTIP ID
- When you create a new topic it will be populated with the PTIP template
- You must include a poll to approve or reject
Once submitted, the PTIP should be open for discussion for at least 5 days (assuming it is well-formed). The PTIP can be left open for longer if the content is highly contested or no consensus for path forward is reached. During the early stages of expansion, we may move with greater agility.
After one week, a governance delegate will determine if consensus has been reached for the content of the PTIP. The forum poll must have reached a positive quorum of 20 votes.
If changes are necessary, they will comment with the full amended proposal and create a corresponding PoolTogether Snapshot vote.
2. PoolTogether Snapshot
Snapshot is a voting system that allows token holders to vote gaslessly. It is used for signaling; Snapshot votes do not change the protocol.
The PoolTogether Snapshot allows all $POOL and $pPOOL ($POOL Prize Pool) token holders to vote gaslessly.
If the Snapshot vote passes with at least 100k votes, then it’s a strong signal that an on-chain proposal would pass. At this point the proposer can make an on-chain proposal as it’s clear the proposal would pass.
3. On-chain Proposal
When it comes time to create an on-chain proposal, the proposer must:
- Create a new PoolTogether Governance proposal that matches the specification outlined in the PTIP
- Create a corresponding POOL Pool Snapshot vote for the proposal.
The details of the PoolTogether Governance system are described here.
The POOL Pool Snapshot allows POOL pool ticket holders to participate in proposal voting. This pool’s voting power has been delegated to a Gnosis Safe multisig whose owners are community members. When there is an on-chain proposal there must be a corresponding vote in the POOL Pool Snapshot. The multisig must vote according to the result of the POOL Pool Snapshot.