PoolTogether V4 is unique as it enables a Prize Pool Network. A Prize Pool Network allows users across chains, with different assets, or different yield sources to combine their interest and share a single pool of prize liquidity. There are three main processes:
- Interest is captured by prize pools on the network.
- Prize distributions are pushed out to the network. This is not prize liquidity, but rather the structure of the distributions.
- Prize liquidity is ensured on all networks (enabling users to claim prizes on the networks they deposited).
Users deposit into Prize Pool contracts, which generate yield that goes to the network prize liquidity.
The prize pool yield contributions are compared and weighted odds are pushed out to each prize pool. Note, that these are the odds that are pushed out, not the actual prize liquidity. The possible prizes for all users is the same, but their odds are weighted according to how much liquidity they contributed to the prize network liquidity.
Prize Pools will largely feed off of their own interest, but at times liquidity may need to be rebalanced by the protocol to satisfy prize distributions. Initially the Prize Distributor contract on each chain will be bootstrapped to ensure there is always enough liqudity for users to claim prizes on that chain.