2018-06-08 Validator Economics Meeting notes

5 min

Reason for meeting

Nash

• It's an opportune time to start getting everyone on the same page with respect to network parameters on Economics.

• There are a lot of questions from people right now about how to validate

  • What does it cost to stake?

  • What is my expected return?

    • Do I have to supply hardware? Should I rent it from someone? What do I need to be thinking about as I choose a shard to stake?

  • Will there will be monetary expansion, how much, how is it managed?

  • How will validator rewards distributed?

  • We should get to a point on what we can publish

  • What will be decided at network launch

  • What needs to be turned over to the CoOp for governance as part of the governance meeting.  In advance of the meeting

Scope of meeting

Mike

• Are we including a fee structure for new validators joining?

• Transaction fees

10 min 

 What policies are already set

Greg 

•  Fees paid out to validators are inflationary.  There is an issuance goes down over a period of 10 years over a logarithmic curve.  Over the 10 year period we max out of 10% of the original volume.  Decided in April of 2017.

  • https://github.com/rchain/board/blob/master/2017/07-10/Approval%20-%20RHOC%20Plan.pdf 

  • Pure mechanics that this kind of token supply is unreasonable in the long run.  It won't work for everyday economics (Greg's opinion).

  • Consider running another staking token that has a much much larger supply, because the economics of using Rev is not viable in the long.

• If there are other staking tokens, the sum of the other staking tokens cannot exceed 10% of the total Rev supply.

• Some small percentage of transaction fees in Rev that will be reverted to the CoOperative to fund operations.

  • @Michael Stay (Unlicensed): What prevents someone from forking the code base and setting up a network without the fees?  per Greg  - it's a good question. No answer.

  • The CoOp is providing infrastructure, someone has to pay in order for the CoOp to sustain the infrastructure, without being paid, it cannot be maintained.

10

The parameters

Nash

• Rate of monetary expansion is a global parameter.  Each shard has its own mint contract.  Every shard has a total balance, expansion happens in wall clock time.  Solution to the Jumanji problem, no cryptographic stuff.

• The validators for 1 shard will produce a transaction that expands the monetary supply that expands.

• Kyle and Nash to meet and discuss how the mint works in the tree model.

Fee Structures in different shards and Phlo

• The desire to keep validators incentivized and engaged in the network.  

  • Validators with seniority are paid fees by new validators joining.

• What about bad actors?

• Icing out of a group of people can be a result of this.

Accusation

Kyle

• Implement negative sum games for slashing.  Validators all pay a little bit to completely slash a bad actor.  If griefing costs, it will definitely go down.  Greg is concerned about griefing solutions and he is not convinced that these are good things.

Moving forward

• Timing does it work? Yes.

• Transparency - After 2-3 sessions, start discussing with community in hangout.