Attributes
- Author(s): Henry Habgood, Patrick Linden, PJ Forster
- Parameter: StakeMinimum
- Current Value: 15000000000 uPOKT (15,000 POKT)
- New Value: 30000000000 uPOKT (30,000 POKT)
Summary
We propose increasing the minimum service node stake from 15,000 to 30,000. This simple shift can occur on a one-time basis and will not have any impact on gross ROI earned by service nodes on a per-POKT basis, but will help to quickly reduce the number of service nodes on the network to a more manageable level.
Further, this shift will greatly improve net rewards to node runners and reduce overall infrastructure costs to the protocol. If the number of nodes on the network were to be halved as a result of this proposal passing, it could reduce excess infrastructure burden by over $3m per month (assuming a reduction of 21,000 nodes at a hosting cost of ~$150/node).
Abstract
There have been many discussions surrounding the best way to achieve the goals of the network while reducing excess waste due to high infrastructure costs of running a Pocket node relative to the rewards being generated. This proposal seeks to build on prior proposals and provide a clear and easily achievable solution to our current problem while limiting the impacts of forced consolidation/unstaking. Just as important is that this proposal can be passed without the need for a moratorium on the 21 day unstaking period due to the phased implementation.
In our view, the reason that variables such as StakeMinimum are considered governable is because they are meant to be used as levers in the Governance process to adjust the Pocket economic system. If we donât first attempt to use the variables as levers themselves and instead move toward building increasingly more complex systems of managing the protocol, we can quickly find ourselves in a place where the complexity of adjusting the protocol can outstrip the ability of many members of the community or DAOâs ability to understand or effectively take advantage of those changes.
Most discussions surrounding changes to the StakeMinimum parameter have ranged from increasing the value by 100-400%. Increasing the parameter by 100% falls at the bottom of the range of discussion and likely outside the final range that it will need to be adjusted to, but that adjustment will provide real world data on the impact of StakeMinimum adjustments to the protocol, which is ultimately more impactful for future governance decisions than models which have no data on real user behavior with which to draw from.
Motivation
The new parameter value change would allow for the consolidation of nodes to a point still above the current optimal range of ~15,000 nodes. This consolidation goes a long way to improving the net ROI for node runners while still maintaining an adequate buffer of excess nodes in case of unintended consequences (like greater than expected unstaking/consolidation) as a result of this or other proposals passing.
Rationale
Doubling the minimum stake required for a service node is a rational increase as it provides a clear benefit (reducing node count) that utilizes preexisting variables to address current issues surrounding overcapacity on a servicer level.
The timeline outlined below, which is a phased plan, allows for the gradual adjustment of the minimum stake, providing node runners of all sizes with the ability to slowly grow their stake over time. Additionally, it gives the DAO the opportunity to study the impact of the phased increase and the lag time between increases allows for ample time to adjust the increase to the minimum stake if there are adverse (or unintended) consequences of the proposal. More importantly, it does not create a complex change (or code change) to the current protocol that could have disastrous consequences to unwind after implementation.
This proposal builds on the back of the many similar proposals which call for an increase in the minimum stake. One of the core problems with these other proposals is that they require making complex changes to an already complex system, and the range of adjustments being made will make it difficult to actually monitor and score the success of the system. Further, asking a community of node runners to participate in a complex economic experiment that requires advanced math skills to perform optimally in may be an even more restrictive barrier to entry/performance than the comparatively simple decisions necessary to either acquire more POKT or consolidate nodes to keep up with an increasing min stake.
Dissenting Opinions
To Be Added
Timeline
The update can be made immediately, however doing so would dramatically reduce the number of available service nodes on the network to below an acceptable level. In order to provide node runners with a clear timeline for this transfer, we suggest a phased implementation that would increase the minimum required stake by 2,500 POKT every 15 days, effectively doubling the minimum stake over the course of 90 days while having an immediate impact on node count and net rewards.
Not only would this timeline allow node runners who run multiple nodes to consolidate in an orderly manner, it would also reduce the burden on single node runners by allowing them to âearn inâ to this increase. Initial estimates show that rewards earned over those 90 days would supply ~30% of the additional POKT required, greatly reducing the amount of additional investment required for someone running a single node.
Copyright
Copyright and related rights waived via CC0.