Proposal for Small Change in Block Rewards


(Geoff McCabe) #1

When the Divi team wrote the original whitepaper, we were unable to foresee our exact needs after launch. Some community members have voiced the same concerns, suggesting we slightly change the reward structure. This would allow us to take on more valuable opportunities that will benefit the community as a whole.

Primarily, we would allocate the additional funds transparently to the following:

  1. Exchanges - liquidity and/or entry payment.
  2. Platform - incentivizing developers to create new dapps for the Divi ecosystem

This was the original plan:

  • 45% Masternodes
  • 45% Stakers
  • 8% Governance Treasury
  • 2% Charity

So we are proposing to hold a vote to lower the stakers share, and possibly a bit from the masternodes too, to boost our ability to do more for Divi after launch:

  1. Big Change
  • 43% Masternodes
  • 38% Stakers
  • 8% Exchanges / Platform Rewards
  • 10% Development & Marketing
  • 1% Charity
  1. Stakers Change Only
  • 45% Masternodes
  • 40% Stakers
  • 5% Exchanges / Platform Rewards
  • 9% Development & Marketing
  • 1% Charity
  1. Smaller Changes
  • 45% Masternodes
  • 42% Stakers
  • 4% Exchanges / Platform Rewards
  • 8% Development & Marketing
  • 1% Charity
  1. No Change
  • 45% Masternodes
  • 45% Stakers
  • 8% Development, Marketing, Exchanges, Platform
  • 2% Charity

As before, you can vote using the Ethereum blockchain, by sending a small amount of DIVX to an address:

  • Option #1: 0.01 DIVX to 0x0…
  • Option #2: 0.01 DIVX to 0x1…
  • Option #3: 0.01 DIVX to 0x2…
  • Option #4: 0.01 DIVX to 0x3…

We’re looking for feedback from people on the forum to see what you think of this proposed vote. Anything missing? Any better options for how to adjust the block rewards?

Thanks.


(~ Node of the Realm ~) #2

Hi Geoff. I’m guessing this will be a removal of the see-saw and just straight percentages for things? Once the vote goes through, regardless of the outcome, can things easily be changed again if it is found that some percentages work better than others? i.e. adjusted on the run in future?


(John) #3

I think that if this vote is announced and explained AFTER the community is given some good news on the upcoming launch and what all will be available at that time (i.e. full GUI wallet, MOCCI, etc.), then the discussion will more lubricated with how this can further improve the future, near and far, for the Divi Project project and all of us. The timing will be important. Personally, as far as the vote goes, I’d lean towards #2 or #3.


(Johnny401View) #4

I don’t like all the choices. This is a serious consideration that should be held with the team. I recommend proposing 1 change, outline your justification and then go to the community. You guys are the experts. What do you need to be successful?


(Johnny401View) #6

I’d even lean harder on Exchange rewards.

43% MN
36% Stakers
10% Exchange
10% Team
1% Charity

I also agree with @Reacher about timing around good news (aka most bugs squashed). I recommended 10% for Exchange/Platform, because that also ties in with platform rewards which we can use to help incentivize people to take action to grow the platform with DAPPS.

@geoff You mentioned DAPPS, are you planning on implementing your own VM or tie to an existing like Ethereum or EOS?


(OriZ) #7

While I support adding funds for exchanges, of between 6-10% solely for that purpose, I think we need to know exactly what the distribution of rewards is going to be after seesaw is removed. I personally can’t make an educated decision what to vote for without having all the info.


(Johnny401View) #8

If MN rewards are moved from 45 to 43, that’s about a 4.5% deduction.

With your master calculator you’ve created, I now you have a deep understanding of the math @oriz123, I’m just writing this out for myself to wrap around:

60 sec block time
1440 blocks a day, 10,080 per week
1.8 million DIVI per day, 657,000,000 per yaer

1,800,000 * .43 = 774,000 DIVI reserved for MNs to split.

Does that look right minus the lottery coins ?


(OriZ) #9

So there will be 1200 divi in a block up for grabs ex lottery coins. 43% of that is 516. 516 * 60 * 24 = 743,040. I actually like option 2, because it doesn’t take so much away from stakers. Stakers might be an easier target but the last thing we want is for them to feel that way, too. I was originally in favor/proposed 43/43 for masternodes and stakers, 7% for treasury, 6% for exchanges and 1% for charity. I think if option 2 was changed to:

  • 43% Masternodes
  • 40% Stakers
  • 7% Exchanges / Platform Rewards
  • 9% Development & Marketing
  • 1% Charity

It would be ideal. But like I said we need more info; I’d like to know how often each tier would win what portion of a block, how often stakers would win what portion of a block(is it always the same? is there a cap? absolute lowest?), and how they distribute it among themselves in their own respective queue under the new see-saw less system.


(Johnny401View) #10

(Edit: I see, it’s 1250 - 50 for the lottery. I missed that in the WP 2)

“I’d like to know how often each tier would win what portion of a block, how often stakers would win what portion of a block(is it always the same? is there a cap? absolute lowest?), and how they distribute it among themselves in their own respective queue under the new see-saw less system.”

I see what you are asking, makes sense.

As for the ratios, I know plenty of coins in my portfolio that have everything from a scaling 80/20 split and then work it’s way down to a 55/45 to everything in-between. So I do appreciate your thought about staking, I just have much less concern. I feel a slightly higher percentage on the MN just reinforces the benefits on interacting in the 5 tier approach.

Your percentages aren’t far off from mine. If 40% was the magic number for staking, I wouldn’t mind seeing MNs lose a percent and add it to Exchange/Platform.


(Sam L.) #11

I like the option for Stakers change only. It makes sense to me to increase the funding for an ever increasing expense for listing on Large exchanges.

Having less than 1 Billion total tokens in the next 6 months or so and listing on Binance for instance would be a great use of the saved up percentage of rewards.


(Geoff McCabe) #12

Currently the masternode calculator has the MNs at 45% so I’ve been in favor of keeping it that way, to have minimal impact on the community. People have been looking at the calculator and mostly thinking about what masternode they’re going to have. I haven’t seen anyone saying how excited they are to set up a staking wallet.

So getting rid of the see-saw just leaves it like it is in the masternode calculator and this too has minimal impact.

I think we might at first see too much DIVI in masternodes, which will mean that stakers will be getting overpaid, but that will sort itself out really fast once that becomes apparent. People will move some coins to staking, plus their MN rewards too. It will easily balance itself out.

One of my personal motivations for wanting to do all this is that Smart Cash allocates a much larger amount of block awards to be able to fund people who want to build on their platform. That gives them so much ability to grow their ecosystem. If I was able to do it all over, I’d have even more than is proposed here, but also with the governance system, we would be able to ramp that down over time.

As far as being able to change these amounts, we could make the governance system be able to do it, but I’d be worried that masternode holders would vote themselves a raise. I don’t think that would happen with this particular community we have going… I think the level of consciousness is much higher in Divi than the average coin, especially among the larger holders. But, it’s still a concern. However, the numbers can always be changed in the code even if we ultimately don’t make it an easy governance-based method to dial in new numbers.

Also, this needs to be decided very soon, before launch, because it will be much harder to change this afterwards.


(OriZ) #13

If what I understand from you is correct, then I have my answer. However, I’m not sure if anything else was changed when removing see-saw, or if it simply leaves things at 45%. Basically then, it’s just less “progressive”(if I create an analogy with income tax) than it was before, because even if masternodes are 70% of total coins, it’s still 45-45(as opposed to the seesaw that would have seen it at 32% for masternodes and 58% for stakers), but also same with masternodes being 20% of coins which is unlikely of course. I don’t mind this, as the queue in each will take care of itself(if there are that many more masternodes, queue will be longer, so stakers will still earn more, etc). However, I’m still seeking clarification from one of the devs that that’s actually the case.

Regarding governance, I’m an advocate for true and transparent democratic governance. As you say the level of consciousness is high and I don’t see anyone shooting themselves in the foot, however I am personally in favor of allowing stakers to vote on matters that have an affect on either stakers or masternodes(but not other matters, as they need motivation, apart from the extra earnings, to run a masternode…there’s gotta be some perks to it). We can set it so that these issues need a 2/3 majority, and give the team certain limited power to veto certain proposals if they can hurt the project. Each proposal should also cost, not much but something, to prevent people from spamming, and each person should only be allowed to make a proposal every so often. We can work out the finer details in a different thread of course, but that’s my thinking on it.


#14

One of my personal motivations for wanting to do all this is that Smart Cash allocates a much larger amount of block awards to be able to fund people who want to build on their platform. That gives them so much ability to grow their ecosystem. If I was able to do it all over, I’d have even more than is proposed here, but also with the governance system, we would be able to ramp that down over time.

I’m a big fan of SmartCash as well as a SmartCash holder, I’m also a top 50 DIVX holder

I like the approaches of Both projects but smartcash is growing at the speed of light. This is in great measure because the SmartHive (which is basically a block reward pool that fund development, Outreach, Marketing etc…) has 70% of the bock reward, although 70% seems excessive it is working for them very well. Now i think they have a big flaw because none of this money is used to list smartcash in exchanges or at least i haven’t seen a proposal for this in smartcash and smartcash is kinda low in liquidity. Now i’m not saying we should have a 70% bock reward for this:

  • 8% Exchanges / Platform Rewards
  • 10% Development & Marketing
  • 1% Charity

19% in total is acceptable but i would even like that number to be raised to 25%. 9.5% for exchanges/rewards, 14% for development/marketing and 1.5% charity. I actually think is a really good idea to allocate a % of the block to exchanges, that is something new that smartcash doesn’t have. And this 9.5% allocation for exchanges can be lowered via governance once divi is well established in the market.

But i really believe this raise in % allocation to fund progress is crucial for the future of DIVI and its quest to achieve Mainstream. This is what DIVI is all about… I know some masternode holders will not agree with me and will like to keep their control over the block rewards… But please think about it, in the long term this will allow us to succeed and keep going and not just stall in coinmarketcap page 5.


(Baldy) #15

I am totally for changes that end up helping the entire Divi community. However, I signed on with the idea that a lot of thought went into the original tokenomics. I am fully aware that things change, but the staking rewards was very attractive to me. So, may I propose:

The change has a sunset, and if its not helping it reverts to the original percentages. It would take a new vote to keep the change after X months.

Possible?


(Baldy) #16

I think that we have shown that we want what is best for the entire divi community. Further, I dont think we care about earning a specific number of coins. We would like the value of each coin earned to be maximized. I’m pretty sure we all realize that things change and that extra funds for running the project will help improve the value of the coin.

Question: must it be fixed?

maybe it must be now until governance is implemented, but it seems that these percentages could be live and modified by stakeholder voting, any time, any place. Why does there have to be a fixed day, or fixed system?


#17

Question: must it be fixed?

maybe it must be now until governance is implemented, but it seems that these percentages could be live and modified by stakeholder voting, any time, any place. Why does there have to be a fixed day, or fixed system?

No, it should be modified anytime via governance, i wouldn’t like it to be fixed. We need this versatility. But it would be nice to start kicking ass by funding development, marketing, outreach, charity, exchanges listing… from the very beginning of MainNet.

Then maybe in the future this allocation could be lowered once we achieve certain goals or milestones… and then staking and masternodes block reward % allocation increased to attract investors…


(Johnny401View) #18

For a deep dive into possible governance approaches, please check out my 21 questions to consider:


(Johnny) #19

Yeah this is a difficult one. On one hand you want Faster adoption and liquidity which means higher percentages for team/marketing and exchanges on the other you have to consider how will that impact with downward pressure on the price as both pots will generally have to be sold and converted to BTC/ETH or USD.

This definitely need to happen though. I agree that there should be less choices and the team really need to discuss what will be best for the quickest expansion to their goals without crushing the price.


#20

you have to consider how will that impact with downward pressure on the price as both pots will generally have to be sold and converted to BTC/ETH or USD.

Yes, both will be sold but i feel like there will be more downward pressure from masternodes and staking vs the development/rewards/charity/exchange pool.

But, for example the charity pool… i think we should postpone that pool until there’s enough liquidity so people who participate in charity activities can easily find buyers… I consider more importantly to temporally move that 1% charity block reward allocation to the exchanges allocation.


(Geoff McCabe) #21

Based on the feedback here, I’m thinking about just removing the middle option and keeping the Big change and Small change. As well as the “do nothing” option.

I would also write something to make it very clear that WE the founders would like to see the Big change, explain clearly why, and ask people to support us. But, we also don’t want to force this change on the community, because we are trying to take community governance seriously.

The “sunset” option is always an option. We can always change this if for some reason we see it’s not working. And yes, it could be built into the governance system to do automatically by vote, so the numbers could be whatever we want in the future. There are many ways to do this but it does add complexity.

I like also the idea to have people volunteer to add a portion of their masternode/stake rewards to the fund, with a switch to turn it on and off. I’m thinking about some way to reward people for doing that in a way that doesn’t involve coins.

About the charity coins, our aim is not to give away coins that then get dumped on the market, but instead to strategically give away masternodes, to be used as funding sources for people. Perhaps even vaulted, so they can’t be dumped, but provide a continual source of revenue for the receiver.