Idea: Provide incentive for long term MN holding by introducing a Premium Loyalty Program.

Nthelight

Nthelight

Member
Premium Loyality Program:
- Similar to traditional banking saving products.
- Moving the collateral would result in losing the premium.
- No time locking of collateral, you are free to move (sell) your coins when you want to.
- When you sell your MN and buy back in lower again, you will set up your MN again at the standard (no premium) rate.
- Could reduce price volatility due to MN selling as some people would not want to lose their built up premium percentage?
- Not sure how that could actually work, but thinking of using some of the block reward (like 5%) exclusively for premium pay outs ("bonus").
- Some people may prefer a "small premium", other will want to align more with the markets and prefer the "high premium" option.

So, the angle here is obviously to benefit those investors that are loyal to Dash in the true sense of the word and discourage market playing MNOs who sell and rebuy their MN(s) and make the Dash price (and therefore the project) suffer for their personal gains.

No, I have no exact scheme in mind, it's just an idea (not even a concept yet). It's mostly for discussion purposes and to see if people think there's something valuable in this idea. So, without actually going into the detail of how that could or should work, do you like the idea?

Note: This is somewhat similar to time locking the collateral for a bonus, but I think actually locking the collateral (especially for a long time) would not be that desirable imo.
 
Nice idea but unfortunately this can also be painted in a negative light i.e. disincentivizing newcomers. And to be honest, I think I prefer fresh blood than give favor to people that are going to vote the same things all the time. In other words, this could work against us when we need a change of direction.

The immediate buying and selling of nodes is not such a bad thing, after all, a dash masternode is the true unit of account. One single dash is just a share of something bigger and tangible; a server in a data center.
 
I think that Dash should maybe implement something similar to HEX where hodling longer is incentivized. Longer contracts pay better, and penalties result for breaking your contract. Penalties that will be divided amongst the other masternode owners that are honoring their contract. This appears to be working extremely well for HEX.
 
TaoOfSatoshi said:
I think that Dash should maybe implement something similar to HEX where hodling longer is incentivized. Longer contracts pay better, and penalties result for breaking your contract. Penalties that will be divided amongst the other masternode owners that are honoring their contract. This appears to be working extremely well for HEX.
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I think Dash is just fine, it is focused on the payments sector, keep the message simple, quick, easy, private transactions. That's all we need to do, Everything else is just whipped cream topping. We already have merchant payments nailed down. Dash is so overlooked, I can understand why that Greg Mannarino guy is talking about Dash all the time, he sees it too.
 
AgnewPickens said:
I think Dash is just fine, it is focused on the payments sector, keep the message simple, quick, easy, private transactions. That's all we need to do, Everything else is just whipped cream topping. We already have merchant payments nailed down. Dash is so overlooked, I can understand why that Greg Mannarino guy is talking about Dash all the time, he sees it too.
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Yeah, Dash's main message was always about being a digital cash, with all of the aspects of physical cash. But, in the future, if it is deemed beneficial to add some game theory to the masternode layer, the HEX model is a good place to start. We could have our cake (payments) and eat it too (incentives for the second tier to drive investment interest).
 
I've said it to Ryan and maybe worth saying here, dash must not compete for APR. The market is saturated with high yield investments, we can't compete, we'd get eaten alive. We don't need people running masternodes for huge profits, we need them to be loyal to the cause. Radical change isn't going to come to those married to the US dollar.

If we're going to pay people then at least make sure the network as a whole benefits. We can expand our employee base by creating a new node type for fast and local content delivery. A decentralized Netflix with a segregated DAO for artists and producers. I'll happily take a pay cut for that.
 
My proposed idea is not about offering high yield to the market, otherwise I would have proposed to raise the block reward share for MNs.

The idea is to make a difference between loyal MNOs and those who play the market (without any consequence). If it is balanced out well, it could provide more stability in number of masternodes and price.

Apologies if that's not clear.

Also pointing out that the timing would obviously only start when the system is implemented, it would not have any effect on current or new MNOs.
 
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I would have thrown this in the DASH ECONOMICS section of the forum since that is what we are trying to address here.

Nthelight said:
Note: This is somewhat similar to time locking the collateral for a bonus, but I think actually locking the collateral (especially for a long time) would not be that desirable imo.
Click to expand...

Why though? Why are people so opposed to it? Without the commitment, the bonus means nothing. You made reference to your bank, guess what, the bank only gives you extra if you stake more, or stake longer and if you withdraw funds early, you get nothing, I like your idea, but I think it will reward people that just sorta fell into it, like, imagine the market is bullish for the next five years and no one really wants to sell, then without any commitment, they just get more DASH.

What I think is better is to verifably be able to show on the blockchain extactly how much collateral is locked and absolutely cannot be spent, this give confidence to new comers that they won't get dumped on and this will pump the price.

Anyway, when I discussed this idea with the devs the main issue was where does the bonus come? Do we just mint it from the blockchain? If so, then DASH's supply and inflation rate is no longer deterministic and could rise above the 6% it currently is, if we try to adhere to the current emission rate, then we would somehow have to calculate the amount of DASH to take from short term stakers to give to the long term stakers and I think that requires a computation each block of what the theoretical pay would be for each node in the network and then pay the current node the correct amount based on the current age of all the MNs. This has the drawbacks that it would be computationally expensive and require several blockchain lookups to determine the age of each node, even after all that, since the network is constantly changing from block to block, the algo will occasionally overpay a node and other times under pay it, ie, we still won't be exactly deterministic.
 
Also, just for kicks, I decided to compute the average age of a DASH Masternode, here is the code.
Code: 
protx_list=$(dash-cli protx list valid 1)
height=$(dash-cli getblockcount)
jq '.[].state.registeredHeight'<<<"$protx_list"|
awk -v height="$height" '{sum+=height-$1}END{print sum/NR*2.625/60/24}'
Result is 537 Days, surprised?
 
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xkcd said:
Anyway, when I discussed this idea with the devs the main issue was where does the bonus come? Do we just mint it from the blockchain? If so, then DASH's supply and inflation rate is no longer deterministic and could rise above the 6% it currently is, if we try to adhere to the current emission rate, then we would somehow have to calculate the amount of DASH to take from short term stakers to give to the long term stakers and I think that requires a computation each block of what the theoretical pay would be for each node in the network and then pay the current node the correct amount based on the current age of all the MNs. This has the drawbacks that it would be computationally expensive and require several blockchain lookups to determine the age of each node, even after all that, since the network is constantly changing from block to block, the algo will occasionally overpay a node and other times under pay it, ie, we still won't be exactly deterministic.
Click to expand...
Yup, the idea, while likely a good idea as a concept, is not likely easy to implement in a system such as Dash's. Still good to talk about and spitball.

xkcd said:
Also, just for kicks, I decided to compute the average age of a DASH Masternode, here is the code.
Code: 
protx_list=$(dash-cli protx list valid 1)
height=$(dash-cli getblockcount)
jq '.[].state.registeredHeight'<<<"$protx_list"|
awk -v height="$height" '{sum+=height-$1}END{print sum/NR*2.625/60/24}'
Result is 537 Days, surprised?
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Yes, very. I thought it would be much longer than that. Although I guess that probably includes some OGs that migrated to more powerful VPS instances.
 
TaoOfSatoshi said:
Yes, very. I thought it would be much longer than that. Although I guess that probably includes some OGs that migrated to more powerful VPS instances.
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Though, technically, that does not require the node to be re-registered. However, I see a lot of old collaterals move about the chain, only to register again as a Mnode. I will put out a guide on correct MN maintenance as this seems to be a murky issue for most users.
 
xkcd said:
I would have thrown this in the DASH ECONOMICS section of the forum since that is what we are trying to address here.
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We could open a new thread there to discuss all potential changes that could improve 'dash economics'. I'm sure there other people who have ideas. These are interesting aspects of the Dash Core layer 1 that are worthy of a deeper look.

xkcd said:
Why though? Why are people so opposed to it?
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For the simple reason that something may happen in your personal life and you really need the capital back.

I'm not necessarily against locking, it remains part of the discussion if you will, but merely suspecting it's less popular for above reason.

If locking is easier to implement than "time based verification", it is worthy to take that into consideration.

The introcacies of each implementation are somewhat beyond the scope of this discussion though.

xkcd said:
Anyway, when I discussed this idea with the devs the main issue was where does the bonus come?
Click to expand...

No changes to emission. See opening post.

The difference is to be generated by rebalancing the existing MN block reward share.
 
xkcd said:
Though, technically, that does not require the node to be re-registered. However, I see a lot of old collaterals move about the chain, only to register again as a Mnode. I will put out a guide on correct MN maintenance as this seems to be a murky issue for most users.
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You think people are reregistering freshly as determenistic DIP003 node after changing VPS (IP)?

Even that doesn't require you to move the collateral.

Some MNOs blindly executing the DIP003 procedure after a POSE ban? (including moving the collateral to a fresh address)
 
Nthelight said:
For the simple reason that something may happen in your personal life and you really need the capital back.
Click to expand...

What about my personal life? Why should I have have to tolerate your dumping on me? Can't I also have some financial security? If you early end stake with a bank, they slash your reward and charge you fees, it is perfectly natural to implement the same in the Finance 2.0. I just don't see much good in only offering carrot and no stick to to people that stake longer. It won't address the issue we faced in the 2021 pump, which was a deluge of selling and I don't believe they would have held on to maintain their bonus (IMO).

Nthelight said:
No changes to emission. See opening post.
The difference is to be generated by rebalancing the existing MN block reward share.
Click to expand...

This is easier said than done, I suggested a model that may keep the emission steady, but noted, that in the execution of it, we would still float away from the mark, do you have a way of calculating the rewards such that we strictly adhere to the current emission schedule?
 
Nthelight said:
You think people are reregistering freshly as deterministic DIP003 node after changing VPS (IP)?

Even that doesn't require you to move the collateral.

Some MNOs blindly executing the DIP003 procedure after a POSE ban? (including moving the collateral to a fresh address)
Click to expand...

I know it, which is why my very next guide will be on correct set-up and maintenance of your masternode going forward, because there is an awful lot of confusion on the topic.
 
xkcd said:
What about my personal life? Why should I have have to tolerate your dumping on me?
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Hey, I'm not dumping on you, everybody is dumping on me! :)

You are right though and that's why I'm throwing this idea here and hopefully people's eyes will open that there is something to it.

xkcd said:
This is easier said than done, I suggested a model that may keep the emission steady, but noted, that in the execution of it, we would still float away from the mark, do you have a way of calculating the rewards such that we strictly adhere to the current emission schedule?
Click to expand...

I'm aware and that's why I hope that the complexity of such implementation would not immediately overshadow the (potential) value of this idea. It's not rocket science to understand. Loyalty is rewarded. There is a lot of potential benefit in this idea for anyone in the network.

No calculation as I think it would immediately distract everyone with numbers. I'll only go deeper if more support and understanding grows in the community. If people react with "Dash is just fine", there's no point to go deeper and do all the work.

Likewise there are other topics (proposed changes) for which support in our community needs to grow.

Finally, to everyone, this is just an idea worthy of a discussion. I'm not implying in any way that this is something that must be done, is urgent or is the solution to all our problems.
 
OK, don't get me wrong, I like this idea, let's flesh it out a little so we have something to talk about. Let's go with the below bonus plan, where the node is paid a +10% bonus for each year it is active after the first year, capped to +50% after the sixth year.

Schedule in the below table.
Code: 
0-1  0%
1-2 +10%
2-3 +20%
3-4 +30%
4-5 +40%
6+  +50%

Now this bonus can come from the existing reward in one of two ways.

First method. Of the reward that is currently paid to MNs, we reduce everybody's pay to 80% of what it currently is and use the remaining 20% to be distributed to the eligible nodes according to the above table. This means, if very few nodes are >1 year old, then they share the entire 20% amongst themselves and this could be multiples of what the younger nodes get, as more nodes age, this reward would come down, but whatever the reward is, it is always be more for older nodes than the younger ones.

Second method. As said in my previous post, at each block, the network compute what everyone's stake (weight) should be, eg 1 for a young node, 1.1 for 2-3 year old etc. We then divide number of nodes by this number and multiply it by your personal weight and multiply that by the amount of DASH a normal block would pay to compute your MN's pay for this round.

Method 1 is static and the total number of mined coins will remain deterministic, same as we have now with a mostly knowable finite supply.
Method 2 is dynamic and will converge on the same number as 1, but will be out slightly from time to time due to the way the network churns over the period of a full payment cycle ~5000 blocks.
 
xkcd said:
OK, don't get me wrong, I like this idea, let's flesh it out a little so we have something to talk about. Let's go with the below bonus plan, where the node is paid a +10% bonus for each year it is active after the first year, capped to +50% after the sixth year.

Schedule in the below table.
Code: 
0-1  0%
1-2 +10%
2-3 +20%
3-4 +30%
4-5 +40%
6+  +50%

Now this bonus can come from the existing reward in one of two ways.

First method. Of the reward that is currently paid to MNs, we reduce everybody's pay to 80% of what it currently is and use the remaining 20% to be distributed to the eligible nodes according to the above table. This means, if very few nodes are >1 year old, then they share the entire 20% amongst themselves and this could be multiples of what the younger nodes get, as more nodes age, this reward would come down, but whatever the reward is, it is always be more for older nodes than the younger ones.

Second method. As said in my previous post, at each block, the network compute what everyone's stake (weight) should be, eg 1 for a young node, 1.1 for 2-3 year old etc. We then divide number of nodes by this number and multiply it by your personal weight and multiply that by the amount of DASH a normal block would pay to compute your MN's pay for this round.

Method 1 is static and the total number of mined coins will remain deterministic, same as we have now with a mostly knowable finite supply.
Method 2 is dynamic and will converge on the same number as 1, but will be out slightly from time to time due to the way the network churns over the period of a full payment cycle ~5000 blocks.
Click to expand...
Has potential, but I doubt cutting existing MN's pay by 20% will not fly. Call me crazy!
 
TaoOfSatoshi said:
Has potential, but I doubt cutting existing MN's pay by 20% will not fly. Call me crazy!
Click to expand...

That's not the way to look at it.

Unloyal MNOs would over time end up with a lower yield than loyal MNOs.

If everybody is loyal, there is no benefit to anyone and your pay remains exactly the same.
 
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