Prize Pot & RFV (Risk-Free Value)
The Prize Pot is the ultimate reward in IndexPVP. It accumulates ETH from every single trade throughout the entire game, creating a growing pool that the winning index's token holders can redeem at NAV once the market closes.
How the Pot Grows
Every swap on any index's pool is charged a trading fee. That fee is split:
- 70% to protocol — Funds development and operations
- 30% to Prize Pot — Accumulates in the PrizePot contract
This means every buy, every sell, across all 117 indexes, contributes to the prize pool. The more trading activity the game generates, the larger the pot.
The pot grows continuously from the opening bell until the last ticker standing is determined. There are no withdrawals, no distributions, and no reductions along the way (unless the owner triggers an emergency sweep).
What Is RFV?
RFV (Risk-Free Value) is the guaranteed ETH backing per token for the winning index — think of it as the token's NAV (net asset value). It represents the minimum value each token is worth, regardless of market price.
RFV per token = Prize Pot ETH / Winning Token Total Supply
Since each index has 1 billion tokens (1,000,000,000), the RFV per token is:
RFV = Prize Pot / 1,000,000,000
For example, if the prize pot contains 10 ETH:
- RFV per token = 0.00000001 ETH
- A holder with 100,000,000 tokens (10% of supply) can redeem 1 ETH
How Redemption Works
Claiming is a redemption at NAV — you tender your tokens and receive their proportional share of the pot in ETH. Once the game ends (one index remains), the process is:
1. Market Close Detection
When executeDelisting() reduces the listed indexes to 1, the game automatically:
- Sets
gameOver = true - Records the
winningIndex - Calls
prizePot.finalize(winningToken)which snapshots the pot balance and token supply
2. Approve Tokens
Winners must approve the PrizePot contract to spend their winning index tokens:
winningToken.approve(prizePotAddress, tokenAmount)
3. Redeem for ETH
Call claim(tokenAmount) on the PrizePot contract. This:
- Transfers your tokens into the PrizePot (locked permanently)
- Calculates your ETH share:
(tokenAmount / snapshotSupply) * snapshotPot - Sends the ETH to your wallet
You can redeem in multiple transactions — there's no need to forfeit all your tokens at once.
4. Preview Your Redemption
Before claiming, you can check your expected payout:
prizePot.previewClaim(tokenAmount) // returns ETH amount
Key Properties
Snapshot-Based
The pot balance and token supply are frozen at the moment of finalization. Any ETH that arrives after finalization (e.g., from in-flight transactions) is not included in the claimable amount. This prevents manipulation.
Pro-Rata Distribution
Every token has equal claim to the pot. If you hold 1% of the total supply, you get 1% of the pot. It doesn't matter when you bought the tokens or what you paid for them.
Permanent Lock
Tokens sent to the PrizePot during redemptions are locked forever. They cannot be retrieved or reused. This is effectively a burn mechanism without requiring a burn function on the token contract.
Emergency Sweep
The contract owner has a sweep() function that can withdraw all ETH. This is an emergency mechanism in case of bugs or unforeseen issues, not intended for normal operation.
Strategic Implications
The Prize Pot fundamentally changes endgame strategy:
RFV as a Price Floor
The winning index's token has a guaranteed minimum value equal to the RFV. If the market price ever drops below the RFV, it's rational to buy tokens and immediately redeem — creating natural buying pressure that supports the price.
Accumulation Incentive
Since every trade grows the pot, high trading volume benefits everyone holding the eventual winner. This incentivizes market activity even in indexes you don't hold — more volume everywhere means a bigger prize.
Endgame Calculus
In the final rounds, players can estimate the total pot and calculate whether holding the likely winner's token for the RFV payout is more profitable than selling at market price. This creates a convergence between market price and NAV in the endgame.
Holding vs. Selling
With the prize pot, holding the winning index's token to the end is always rewarded. Even if you can't sell at a good market price, the RFV guarantees a payout proportional to your share of the supply.
Example Scenario
A game with heavy trading activity accumulates 50 ETH in the prize pot. The winning index is Brazil's Ibovespa (BR).
| Holder | IBOV Tokens | % of Supply | ETH Redemption |
|---|---|---|---|
| Alice | 200,000,000 | 20% | 10 ETH |
| Bob | 50,000,000 | 5% | 2.5 ETH |
| Carol | 10,000,000 | 1% | 0.5 ETH |
| (Unredeemed) | 740,000,000 | 74% | 37 ETH |
Tokens held by the DelistGame contract (in liquidity positions) or lost wallets are never redeemed, meaning their share of the pot remains in the contract.