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

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.

7 Likes

We support the proposal as it will make it easier for sePSP1 stakers to migrate without having to wait the 28 days. It is a good gesture from the DAO to the holders who support the token at the staking level, and in turn does not involve any cost, but once the process is complete, the tokens will be returned to the DAO’s treasury.

But we have a suggestion. Since the DAO is creating a benefit for sePSP1 stakers who do not have to wait the 28 day withdrawal period, we believe that this benefit could have a pre-determined time limit, for example 3 or 6 months, and that stakers who do not use this benefit within this period should use the normal staking withdrawal procedure and wait the 28 days. On the one hand, this will incentivize users to migrate in a short period of time, speeding up the migration process, and on the other hand, it will give the DAO certainty about the total PSP it will allocate to the buffer, without the need to request a new loan if the funds run out later, as the process is open-ended and has no end date.

What do you think about that?

3 Likes

I agree with the idea.

I’m in favor of this proposal. The suggestions made by the SEED team are worth considering, especially if there is relevant data backing up the suggested benefit.

1 Like

HI @SEEDGov , thank you for the suggestion! I have added a 120 day loan limit to give further accountability and incentives for users to migrate as soon as possible.

2 Likes

Following internal consideration, the Governance Committee has determined this proposal qualifies for a Tier 3 Express proposal.

Thanks everyone for the discussions. The vote is now live:

https://snapshot.org/#/s:paraswap-dao.eth/proposal/0x827a9d6e1689c3b7c227ae016b2faa6fe5e4ad5bbeee6469f733f2af932bc7de

Let’s make sure no staker is left behind!

4 Likes

We support the proposal as it lets sePSP1 stakers migrate without the 28-day wait, benefiting token supporters without any cost to the DAO. However, we also agree with Seedlatam’s suggestion to set a predetermined time limit (e.g., 3 or 6 months) for this benefit, after which the normal withdrawal process applies.