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It’s Time to Grow: Phase 3 Staking Proposal


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Hi Adrian,

I was thinking about the current centralization of the validators: 67% are in the Elrond Community Delegation.

I would be interested in running community validator nodes, coming in with 1/8th of the 2500eGld, and having other interested people like Ken coming in with same amounts. Would that be possible to set up via a smart contract?

Since the eGld price is 20x higher than it was, this would enable people with fewer eGlds to participate as validators, and for the Elrond team it would help decentralize the nodes.

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This proposal is focused on expanding the Elrond staking economy. Please read the information below carefully in preparation for our feedback sessions. The changes we are proposing are meant to o

I'm not part of the team, but just my humble opinion. Need to recap a bit the history to understand the present. This blockchain has less than 7 months from the mainnet and is already in top 20 - 25

Hi Milan, 1. If you run a staking service (accept delegations) there is a delegation manager contract that allows you to create your own delegation contract with your preferred configuration (ser

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21 minutes ago, Alt said:

Hi Adrian,

I was thinking about the current centralization of the validators: 67% are in the Elrond Community Delegation.

I would be interested in running community validator nodes, coming in with 1/8th of the 2500eGld, and having other interested people like Ken coming in with same amounts. Would that be possible to set up via a smart contract?

Since the eGld price is 20x higher than it was, this would enable people with fewer eGlds to participate as validators, and for the Elrond team it would help decentralize the nodes.

We are working on next steps in order to decentralize the 67% community nodes, and that will probably be the next update after phase 3 delegation.

For staking, the general direction is towards having a sort of auction (which was referred as phase 4 staking) that will decide the price of a node.

For delegation/staking services, currently it is required to have 1250 egld, as the owner/service provider needs to have some 'skin in the game'.

I think we can discuss also options on having multiple participants for this initial deposit, we could in this case maybe make use of the multisig contract, in order to have the delegation owner actions handled through a sort of voting of the owners. We could also define who has which rights (from the participants to the initial deposit). But there are multiple edge cases that need to be covered with such an option where you have multiple owners and I don't see having this ready for the scheduled update for phase 3 staking.

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11 minutes ago, Adrian Dobrita said:

For delegation/staking services, currently it is required to have 1250 egld, as the owner/service provider needs to have some 'skin in the game'.

Sorry, I didn't understand what you mean by staking services. These are 3rd party staking services running validator nodes? I haven't read about this 1250 requirement before. The customer comes in with 1250 and the staking service with another 1250 per node?

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22 minutes ago, Alt said:

Sorry, I didn't understand what you mean by staking services. These are 3rd party staking services running validator nodes? I haven't read about this 1250 requirement before. The customer comes in with 1250 and the staking service with another 1250 per node?

With staking phase 3, there is a delegation manager smart contract.

You could call that delegation smart contract and "ask" it to generate for you, with some preferred parameters a delegation contract, by depositing 1250 egld (required for the 'skin in the game' and sybil prevention to keep this smart contract active).  The preferred parameters are your service fee, maximum accepted delegation amount, and if you want automatic activation. For example if you would be able to only run 10 machines you would set maximum at e.g 25000 egld (Not considering here any topup). You will then be the owner of this delegation smart contract and be able to accept delegations.

The 1250 egld is per delegation contract, not per node. So if you get more delegation in the same contract, you could run multiple nodes, with just the initial 1250 from your side.

Once the delegation smart contract accumulates at least 2500 egld (1250 in adition to the original 1250 you deposited), the delegation contract will stake one node for your registered keys (if you have chosen to go with automatic activation, otherwise you will need to manually call the stake function). This will happen for every 2500 egld accumulated, so if for example you get 25000 egld from delegations in the smart contract, you could run 10 validators.

You as a service provider in this case need to make sure that when the 2500 (or multiples of 2500) are reached, you have your machines ready to validate in the network.

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These features are activated in the testnet so you can already play with these and see how they work.

You can ask for test tokens (xegld) to play with in the testnet, people preparing to run staking services are already doing this.

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55 minutes ago, Adrian Dobrita said:

With staking phase 3, there is a delegation manager smart contract.

You could call that delegation smart contract and "ask" it to generate for you, with some preferred parameters a delegation contract, by depositing 1250 egld (required for the 'skin in the game' and sybil prevention to keep this smart contract active).  The preferred parameters are your service fee, maximum accepted delegation amount, and if you want automatic activation. For example if you would be able to only run 10 machines you would set maximum at e.g 25000 egld (Not considering here any topup). You will then be the owner of this delegation smart contract and be able to accept delegations.

The 1250 egld is per delegation contract, not per node. So if you get more delegation in the same contract, you could run multiple nodes, with just the initial 1250 from your side.

Once the delegation smart contract accumulates at least 2500 egld (1250 in adition to the original 1250 you deposited), the delegation contract will stake one node for your registered keys (if you have chosen to go with automatic activation, otherwise you will need to manually call the stake function). This will happen for every 2500 egld accumulated, so if for example you get 25000 egld from delegations in the smart contract, you could run 10 validators.

You as a service provider in this case need to make sure that when the 2500 (or multiples of 2500) are reached, you have your machines ready to validate in the network.

Makes sense. Thank you.

Will the Elrond wallet or Maiar show the list of Staking Providers to end-users for them to choose based on fees and returns? Or are the Staking Providers required to do their marketing outside?

My area of expertise is technical, so I would be interested in the part of running the nodes and competing with others on the fees on an open market.

To be fully transparent I only own 300 eGld, so would need 950 more, which at the moment is priced at almost $200.000. And like I said, I'm an engineer not a wall street investor 🙂

 

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26 minutes ago, Alt said:

Makes sense. Thank you.

Will the Elrond wallet or Maiar show the list of Staking Providers to end-users for them to choose based on fees and returns? Or are the Staking Providers required to do their marketing outside?

My area of expertise is technical, so I would be interested in the part of running the nodes and competing with others on the fees on an open market.

To be fully transparent I only own 300 eGld, so would need 950 more, which at the moment is priced at almost $200.000. And like I said, I'm an engineer not a wall street investor 🙂

 

Yes the plan is to list all staking providers in explorer, and with some extra validation in wallet, and in maiar as well (we want to, but not sure if we will manage to have it ready for maiar when we do the update... but it will become available there eventually as well)

We need to do some extra validation before listing staking providers in wallet or maiar (here not sure if we have decided yet on the process) to prove that they have their setup ready, as if we list them in wallet and maiar it also looks like some sort of endorsement.

We have prepared a delegation dashboard, which is getting the final touches and will be ready for testing. This can be integrated and adapted by staking providers in their websites for their own marketing and provides data related to the APR, current staked amount, number of nodes, service fees, etc.

We will have this sort of information also in explorer.

Regarding the price of one validator, as I mentioned above there is the soft auction prepared for staking phase 4, and we do have some internal discussions to see if we can have some changes that would allow a lower entry but without affecting the security or having a too big impact on the rewards such that it becomes unattractive for professional validators. And if we find a good solution, this kind of change cannot be done in a short time and needs to be discussed with community and current validators and probably pass through voting (first implementation for governance mechanism is almost ready as well).

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5 minutes ago, Adrian Dobrita said:

Yes the plan is to list all staking providers in explorer, and with some extra validation in wallet, and in maiar as well (we want to, but not sure if we will manage to have it ready for maiar when we do the update... but it will become available there eventually as well)

We need to do some extra validation before listing staking providers in wallet or maiar (here not sure if we have decided yet on the process) to prove that they have their setup ready, as if we list them in wallet and maiar it also looks like some sort of endorsement.

We have prepared a delegation dashboard, which is getting the final touches and will be ready for testing. This can be integrated and adapted by staking providers in their websites for their own marketing and provides data related to the APR, current staked amount, number of nodes, service fees, etc.

We will have this sort of information also in explorer.

Regarding the price of one validator, as I mentioned above there is the soft auction prepared for staking phase 4, and we do have some internal discussions to see if we can have some changes that would allow a lower entry but without affecting the security or having a too big impact on the rewards such that it becomes unattractive for professional validators. And if we find a good solution, this kind of change cannot be done in a short time and needs to be discussed with community and current validators and probably pass through voting (first implementation for governance mechanism is almost ready as well).

Understood. I can only give you my perspective. The price barrier is a problem for people that want to participate, and are forced to look (invest) elsewhere. (32 ETH staking).

Suggestion: At least lower the 1250eGld necessary for a staking service to 500eGld. And perhaps the validator node to 1000eGld.

Like you, I can only see eGld going up. And as it goes up, you're sailing further and further away from the crypto/tech people that participated in the genesis.

 

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Hi,

First of all congrats for all the hard work.  I have some eGLD in the delegation waiting list right now. My position is only around 4500 since i forgot to delegate at the beginning of phase 2. My question is: After phase 3 launch, will the waiting list still be relevant or we should be ready from second one to grab a seat with a smart contract from a staking provider? Also, what will the risks be for me as a delegator to collaborate with a staking provider? Thanks!

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6 hours ago, Mihai Iordache said:

Hi,

First of all congrats for all the hard work.  I have some eGLD in the delegation waiting list right now. My position is only around 4500 since i forgot to delegate at the beginning of phase 2. My question is: After phase 3 launch, will the waiting list still be relevant or we should be ready from second one to grab a seat with a smart contract from a staking provider? Also, what will the risks be for me as a delegator to collaborate with a staking provider? Thanks!

Thanks Mihai!

Well the queues will still be in place for easy swap, but no longer incentivized.

Yes you should follow the announcements and move to a staking provider when it becomes available.

If the staking provider uses our delegation manager to create their delegation Smart Contract, then the probability of loss of funds is low, as we have run multiple tests, we are still running tests to validate everything, we had several audits, which should minimize the risk of bugs.

You can also start testing out the process in the testnet (the features are already activated there) and report any bugs you may find. This is the purpose of having it activated first in testnet, to iron out any remaining bugs and get feedback from community/validators on what we can improve.

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12 hours ago, Adrian Dobrita said:

Thanks Mihai!

Well the queues will still be in place for easy swap, but no longer incentivized.

Yes you should follow the announcements and move to a staking provider when it becomes available.

If the staking provider uses our delegation manager to create their delegation Smart Contract, then the probability of loss of funds is low, as we have run multiple tests, we are still running tests to validate everything, we had several audits, which should minimize the risk of bugs.

You can also start testing out the process in the testnet (the features are already activated there) and report any bugs you may find. This is the purpose of having it activated first in testnet, to iron out any remaining bugs and get feedback from community/validators on what we can improve.

Thank you!

In this case, when the time will come, will you flag the staking providers who use your delegation manager so that we will know who are the safest ones to collaborate with? I would be much interested in delegating my eGLD to one who is safer than to one who gives bigger rewards. I will also stick my nose in the testnet for a better understanding. Do you have a date established for the delegation dashboard update on the testnet?

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Hello Adrian. 

I have a question related to "the queues will still be in place for easy swap" and "Yes you should follow the announcements and move to a staking provider when it becomes available".
Currently, I'm on the waiting list, this means that starting with the ones from the top of the waiting list will be assigned automatically to a validator until the seats will be full again or also the ones that we are on the waiting list we should do something special in order to be assigned to a provider?

What about the ones that are already in the delegation, those will remain there until they will want to leave, right?

Thanks,
Dragos 🙂

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4 hours ago, Mihai Iordache said:

Thank you!

In this case, when the time will come, will you flag the staking providers who use your delegation manager so that we will know who are the safest ones to collaborate with? I would be much interested in delegating my eGLD to one who is safer than to one who gives bigger rewards. I will also stick my nose in the testnet for a better understanding. Do you have a date established for the delegation dashboard update on the testnet?

Yes, we are trying to get the dashboard out for testing this week.

For the staking providers that are using our provided delegation manager we will make it visible.

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2 hours ago, Dragos said:

Hello Adrian. 

I have a question related to "the queues will still be in place for easy swap" and "Yes you should follow the announcements and move to a staking provider when it becomes available".
Currently, I'm on the waiting list, this means that starting with the ones from the top of the waiting list will be assigned automatically to a validator until the seats will be full again or also the ones that we are on the waiting list we should do something special in order to be assigned to a provider?

What about the ones that are already in the delegation, those will remain there until they will want to leave, right?

Thanks,
Dragos 🙂

There will be no automatic assignments, the owner of the funds (you) will have to withdraw from the waiting list and choose a service provider (we cannot decide for you the service provider and we can not move your funds)

The ones in the active delegation are not affected. They can remain in active delegation, or if they so choose they can undelegate and move to service providers.

The active delegation receives rewards from the protocol so they will continue to receive rewards after the update as well.

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16 minutes ago, Adrian Dobrita said:

There will be no automatic assignments, the owner of the funds (you) will have to withdraw from the waiting list and choose a service provider (we cannot decide for you the service provider and we can not move your funds)

The ones in the active delegation are not affected. They can remain in active delegation, or if they so choose they can undelegate and move to service providers.

The active delegation receives rewards from the protocol so they will continue to receive rewards after the update as well.

Hi,

So what will the waiting list`s purpose be in phase 3? If we don`t want to go with the service providers we will have the option to remain in the queue for delegating with you, or am i missing something?

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4 hours ago, Mihai Iordache said:

Hi,

So what will the waiting list`s purpose be in phase 3? If we don`t want to go with the service providers we will have the option to remain in the queue for delegating with you, or am i missing something?

There is a waiting list for both delegation and staking.

For staking we have capped number of seats (with update will be 3200) so having a node in the waiting list when all seats are taken will allow you to replace a validator when it becomes jailed (if you are next in queue) or replace it when it unstakes.

Same will be for active delegation with the community delegation smart contract. There will always be some that will want to undelegate at some point, so first in queue will take their place.

Of course if you are able to delegate with a staking provider that still accepts delegations and get into active delegation faster this way, it would be a better option, otherwise there will still be the option of waiting in this list until someone undelegates.

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On 11/20/2020 at 12:15 PM, Lucian Mincu said:

increasing

To have a decentralized blockchain, the goal is to have many validator node as possible ? So why limit the number of validator node ? 

And so why the minimum amount of stack is so high (2500 egld ) ?   With a lower value, much people could try to run a validator node.

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6 minutes ago, ChrisKris said:

To have a decentralized blockchain, the goal is to have many validator node as possible ? So why limit the number of validator node ? 

And so why the minimum amount of stack is so high (2500 egld ) ?   With a lower value, much people could try to run a validator node.

I'm not part of the team, but just my humble opinion. Need to recap a bit the history to understand the present.
This blockchain has less than 7 months from the mainnet and is already in top 20 - 25 by marketcap. Inevitably the node price increased a lot.

From technical perspective the project is rock solid (and this is reflected in the eGLD price as well), the validators community is also very strong, the same team with long term vision. You cannot change the rules during the game and need to let some time to digest the new economic environment and the current validators expectations. Growing organically is the key in a fully distributed environment if want to keep both security and safety.

In this point, is very risky to change the node min amount, there are lot of validators which already made the setup for phase 3 with all the economic context in place. Starting with phase 4, the auction mechanism will be enabled, let's see what's happening after the voting.

Also, from scalability point of view and taking in consideration the current overloading, 3 shards with one metachain with 3200 nodes is more than enough for running any kind of project. Elrond is one of the most distributed PoS project from the community from both the nodes distribution and from hw requirements perspectives. 

I understand your point, but need to wait at least to phase 4 or when the network will naturally request more nodes.

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On 11/30/2020 at 9:42 PM, ken crowley said:

small fish

hi all, well im a small fish here and i only run one validator node, at the moment i dont want to go into becoming  staking as a service provider untill i could become more comfortable with the smartcontracts etc so untill then im quite happy running my node, if i could i would had run more nodes but i do not have the funds for this, so im just going to put this out their, i understand the proposal to increase the stake per node but putting the amount up too much may price even more people out and a few people/comapanies could end up running a majority of the nodes, this to me is not decentaliaztion as you might as well stay with the Elrond bootnodes, this is just me speaking up for the small single node operators, i would also like  to say that any increase should not be more than 500egld per year and this figure is purely based on the fact i only have 3000 egld :) so if the price does go above i hope one of you staking providers will give me a good deal to delegate hehe!, as for josefcoap proposal i also agree that their needs to be a secure lock in period like he mentioned to create continuity for the validators and staking providers.

all the best

ken.

Good point Ken. I also do think this is not the right way towards decentralization and I see a big wave coming in on social media about not being decentralized ( when to become a validator you'll need to purchase at least 2500 ELGD) and if this is not addressed correctly I don't see it going anywhere good on long-term. I love Elrond! All the best! 

Thanks,

Lucian

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hello everyone - I apologise in case my question is too basic but there is something I can't seem to get my head around, maybe because I do not understand the technicalities of smart contracts.

I'm currently in the waiting list with my coins and as everyone here, I want to support the network and get some rewards in the process. Once phase 3 begins and I will have to choose a SaaS Provider, how do I know which one is safe? They can just walk away with my coins at any time, no? 

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14 hours ago, Alexandru Cumpanici said:

hello everyone - I apologise in case my question is too basic but there is something I can't seem to get my head around, maybe because I do not understand the technicalities of smart contracts.

I'm currently in the waiting list with my coins and as everyone here, I want to support the network and get some rewards in the process. Once phase 3 begins and I will have to choose a SaaS Provider, how do I know which one is safe? They can just walk away with my coins at any time, no? 

Hi Alexandru,

The DelegationManager SC was verified and strongly tested by the team Elrond team. As you maybe already know, they use also formal verification on those for the safety part.

Most of the staking agencies were very active on our Elrond Validators Telegram group, very technical guys and good professionals. 

Basically 2 things can happen:
1. If the staking agency will not maintain properly the nodes (shut down, doesn't upgrade etc): these will get jailed and stop earning rewards. Everyone on those nodes stops earning rewards.
2. If the staking agency will use the nodes to attack the network or by mistake will make double signing (using the same BLS key for 2 different nodes) or just they loose control of the nodes (and others will use them to attack the network). The protocol notices is and the entire pool gets slashed - (some of) the funds are lost.

As far I know the slashing mechanism is not yet enabled. 

But taking in consideration the staking agency need to make the heavy lifting and come with 1250eGLD per DelegationManager SC to enable the stake function, for sure his own interest is to make things going reliable. 

Best regards,

Marius

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1 hour ago, Marius Grigoras said:

Hi Alexandru,

The DelegationManager SC was verified and strongly tested by the team Elrond team. As you maybe already know, they use also formal verification on those for the safety part.

Most of the staking agencies were very active on our Elrond Validators Telegram group, very technical guys and good professionals. 

Basically 2 things can happen:
1. If the staking agency will not maintain properly the nodes (shut down, doesn't upgrade etc): these will get jailed and stop earning rewards. Everyone on those nodes stops earning rewards.
2. If the staking agency will use the nodes to attack the network or by mistake will make double signing (using the same BLS key for 2 different nodes) or just they loose control of the nodes (and others will use them to attack the network). The protocol notices is and the entire pool gets slashed - (some of) the funds are lost.

As far I know the slashing mechanism is not yet enabled. 

But taking in consideration the staking agency need to make the heavy lifting and come with 1250eGLD per DelegationManager SC to enable the stake function, for sure his own interest is to make things going reliable. 

Best regards,

Marius

Hi,

Was there not a mention the other days that one validator can come with a skin in the game move of 1250 eGLD and can run up to 10 nodes with only that? Beside that, they are the ones who get the big chunk of the rewards for running the nodes and also they are free to establish the rewards for the delegators from what I understand. About the last part, is there something that can prevent the validators from creating a price cartel in order to all give the minimum rewards to the delegators? This system seems to create small whales. With all the benefits, at some point they won`t even care about the "skin in the game" they leave behind if they mess up. On the other hand, us delegators will have "the chance" to remain with the fingers in our mouths. Is this scenario possible or am I missing some details?

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2 hours ago, Marius Grigoras said:

Hi Alexandru,

The DelegationManager SC was verified and strongly tested by the team Elrond team. As you maybe already know, they use also formal verification on those for the safety part.

Most of the staking agencies were very active on our Elrond Validators Telegram group, very technical guys and good professionals. 

Basically 2 things can happen:
1. If the staking agency will not maintain properly the nodes (shut down, doesn't upgrade etc): these will get jailed and stop earning rewards. Everyone on those nodes stops earning rewards.
2. If the staking agency will use the nodes to attack the network or by mistake will make double signing (using the same BLS key for 2 different nodes) or just they loose control of the nodes (and others will use them to attack the network). The protocol notices is and the entire pool gets slashed - (some of) the funds are lost.

As far I know the slashing mechanism is not yet enabled. 

But taking in consideration the staking agency need to make the heavy lifting and come with 1250eGLD per DelegationManager SC to enable the stake function, for sure his own interest is to make things going reliable. 

Best regards,

Marius

Thank you Marius for the explanation! In order for me to withdraw my coins, can I initiate this action at any time? What is the Saas Agency control over my coins?

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39 minutes ago, Alexandru Cumpanici said:

Thank you Marius for the explanation! In order for me to withdraw my coins, can I initiate this action at any time? What is the Saas Agency control over my coins?

Yes, you can unstake anytime. You need to follow up the specifics with the staking agency (duration period, min stake size etc).

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On 2/11/2021 at 11:02 PM, Adrian Dobrita said:

There is a waiting list for both delegation and staking.

For staking we have capped number of seats (with update will be 3200) so having a node in the waiting list when all seats are taken will allow you to replace a validator when it becomes jailed (if you are next in queue) or replace it when it unstakes.

Same will be for active delegation with the community delegation smart contract. There will always be some that will want to undelegate at some point, so first in queue will take their place.

Of course if you are able to delegate with a staking provider that still accepts delegations and get into active delegation faster this way, it would be a better option, otherwise there will still be the option of waiting in this list until someone undelegates.

With respect to the ones in the delegation waiting list, will they be automatically allocated from that waiting list to the newly staking service providers or do we have to withdraw from the waiting list manually and opt-in for the staking provider manually as well?  

If the later, in the case where you have multiple ranks in the waiting list (say 10 in 5.000, 10 in 10,000 and 10 in 15,000) and you decide to withdraw only part of them (10), will the tokens move out in a FIFO matter (those 10 will go out of rank 5,000) or in LIFO matter (those 10 will got out from 15,000)? 

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