I object. This will only temporarily drive up quil’s coin price while forcing a huge token unlock and panic in the future. It does not do quil any favours. Also, many big miners already got enough quil in version 19; this is not hard to beat at all. But it turns away many newcomers.
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Hey Quil Chads, Based on the discussion and concerns raised, here’s a comprehensive proposal for a staking mechanism in Quilibrium that addresses the key issues while maintaining the network’s core principles:
This proposal introduces an Adaptive Seniority-Based Staking (ASBS) mechanism for the Quilibrium network. The ASBS system aims to enhance network security, discourage malicious behavior, and promote long-term commitment while maintaining accessibility for new participants and avoiding centralization risks.
Introduction:
Quilibrium’s current system lacks a formal staking mechanism, which has led to both benefits and challenges. While the low barrier to entry has fostered rapid network growth, it has also potentially exposed the network to manipulation by bad actors. The ASBS mechanism addresses these concerns while preserving Quilibrium’s unique features such as the Proof of Meaningful Work (PoMW) and prover ring systems.
Core Principles of ASBS:
2.1 Seniority-Based Staking: The staking requirement is inversely proportional to a node’s seniority, encouraging long-term commitment.
2.2 Adaptive Staking Tiers: Staking requirements are tiered based on node capacity, with diminishing requirements for larger contributions.
2.3 Dynamic Adjustment: Staking requirements adjust based on network health and token value.
2.4 Optional Enhanced Staking: Provides additional benefits for those willing to stake more than the minimum.
2.5 Gradual Implementation: A phased approach to minimize disruption to existing operators.
Detailed Mechanism:
3.1 Base Staking Formula:
BS(T, S) = α * log(T) * e^(-βS)
Where:
BS: Base Staking requirement
T: Number of threads
S: Seniority score (time active in the network)
α: Base coefficient (adjustable through governance)
β: Seniority impact factor
This formula ensures that the staking requirement increases with the number of threads but decreases with seniority, encouraging long-term participation.
3.2 Tiered Staking Structure:
Tier 1 (1-32 threads): 100% of BS
Tier 2 (33-256 threads): 80% of BS
Tier 3 (257+ threads): 60% of BS
This tiered structure recognizes larger contributions to the network while preventing excessive advantages for whale operators.
3.3 Dynamic Adjustment Factor:
DAF = 1 + γ * (N - N_target) / N_target
Where:
DAF: Dynamic Adjustment Factor
N: Current network utilization
N_target: Target network utilization
γ: Sensitivity parameter
The DAF allows the staking requirement to adapt to network conditions, increasing during high demand and decreasing during low demand.
3.4 Final Staking Requirement:
FSR = BS(T, S) * DAF
3.5 Optional Enhanced Staking:
Operators can choose to stake additional QUIL tokens above the FSR. For every 10% increase in staking above FSR, the operator receives a 1% boost in rewards, up to a maximum of 20% boost.
Implementation and Transition:
4.1 Gradual Roll-out:
Phase 1 (Months 1-3): Voluntary staking with enhanced rewards
Phase 2 (Months 4-6): Mandatory staking at 50% of calculated FSR
Phase 3 (Months 7-9): Mandatory staking at 75% of calculated FSR
Phase 4 (Month 10+): Full implementation of FSR
4.2 Seniority Preservation:
Existing nodes will have their current seniority factored into the staking calculation from day one, ensuring their contributions are recognized.
Slashing and Penalties:
5.1 Tiered Penalty System:
Minor infractions (e.g., brief downtime): No slashing, temporary reduction in rewards
Moderate infractions (e.g., extended downtime, outdated software): 1-5% slashing of stake
Severe infractions (proven malicious behavior): 10-100% slashing of stake
5.2 Appeal Process:
An on-chain governance mechanism allows node operators to appeal slashing decisions, with the community voting on the outcome.
Benefits of ASBS:
6.1 Enhanced Security: By requiring a stake, the cost of attacking the network increases significantly.
6.2 Long-term Commitment: The seniority factor encourages operators to maintain their nodes over extended periods.
6.3 Fairness: The tiered structure and seniority factor prevent excessive advantages for large stakeholders.
6.4 Flexibility: The dynamic adjustment factor allows the system to adapt to changing network conditions.
6.5 Inclusivity: The gradual implementation and tiered structure maintain accessibility for smaller operators.
Potential Risks and Mitigations:
7.1 Centralization Risk:
Mitigation: The tiered structure and seniority factor prevent excessive concentration of power.
7.2 Barrier to Entry:
Mitigation: Gradual implementation and lower requirements for new nodes maintain accessibility.
7.3 Liquidity Concerns:
Mitigation: The optional enhanced staking allows operators to choose their level of commitment.
Governance and Future Adjustments:
The ASBS parameters (α, β, γ, tier thresholds, etc.) will be adjustable through on-chain governance, allowing the community to fine-tune the system as the network evolves.
Conclusion:
The Adaptive Seniority-Based Staking mechanism provides a balanced approach to introducing staking in Quilibrium. It enhances network security and stability while preserving the core principles of accessibility and fair participation that have driven Quilibrium’s growth. By recognizing both the quantity of resources provided and the duration of commitment, ASBS aligns incentives for long-term, high-quality network participation.
I vote against this proposal because it seems at odds with the purposes and spirit of Q. I agree with the detailed objections below from @Tyga and @agwm_2014