While I think that +5% every two months is a really aggressive pace and probably a bit too much, I would also support a move to 15% in the near future.
3 Likes
I do agree with @Chief_Standing_Wolf that the validator gauges are one of Marinade’s best assets and a key differentiation factor, but I’m with @dobby about +5% every two months coming across as a lot, and I’d be hesitant to support that without further study on the impact to help answer the question that @Durden has asked.
While we are at it…
This is an interesting idea. We’ve had a few passing conversations on the Discord about if voting on the gauges should be linear, as it is now, or if it should be on some sort of curve á la quadratic voting. I don’t think the topic of weighing them based on the “Marinade score” had come up before, though.
Would support validator gauge weight increase but think it would be best if “bribe” mechanics were built first so that it can have the best impact.
2 Likes
This is a good one and I agree with this 100%
2 Likes
I think that @Chief_Standing_Wolf is on to something. Increasing the % the gauges control in the pool does have an immediate impact on MNDE’s utility and possibly general appreciation, which to me is connected to the MNDE impact on the validator gauges.
50% feels quite aggressive though and would possibly make Marinade step away from the original mission and ethos of decentralizing and securing Solana, in a permissionless fashion. Entertaining that idea makes me feel more comfy if a majority of the stake in the pool is controlled by the stake bot (permissionless delegation strat).
However, I would love to see how the validator gauges was used with an additional 5% allocated from the total stake, ie.15%.
3 Likes
Keep it simple. Lets get a proposal to move it to 15%. Then we monitor and re-assess.
2 Likes
Hello, welcome to governance week
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I would be up for a one-time +10%. Instead of doing a really small step and waiting, it doubles the ceiling and allows for the “game” to progress faster instead of trying to optimize.
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I would not suggest committing to neither a threshold- nor time-based increases now. The behavior at a certain percentage does not guarantee that it will progress in the same way. The delegation strategy driving the stake is a critical asset (stake is attracted to that plus liquidity unlock in a form of mSOL) and should be treated with care.
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Move like that increases the risk of the delegation going awry, so it should be connected with a more locked MNDE participating in the strategy. The fair expectation would be for participation to increase proportionally (2x). Currently, there are 29M MNDE participating in validator gauges, so 60M would feel good. The next steps can be considered after.
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I would not do quadratic voting or any voting change now (for validator gauges, liquidity might be a different case), but an increase to 20% should provide input if such adjustments are needed.
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All these points together, I would still vote on this increase.
7 Likes
As an MNDE holder and a Marinade gauge staked validator, I fully support raising validator gauges’ control. It will also indirectly pump MNDE (since controlled SOL per MNDE is pumped → more power per MNDE), which leads to increased APY for pools that has MNDE emissions, which could help with TVL.
However, I feel like a one-time +10% may be too drastic, I feel like we should increase in increments so gauge voters have time to adjust their voting strategy for maximum effectiveness. Also increasing gauge control may have some unintended consequences that will only reveal themselves after the increase, therefore I would to propose that we still raise the control, but slowly, and have a set of rules in place that could halt the increase.
What about increasing by 1% per week to start with?
1 Like
There’s an old Sid Meier mechanism design maxim where he said that if you wanted to see if a setting was doing something, you had to either double it or cut it in half.
We have already gotten some feedback from validators that it can be unpredictable how much SOL will a certain amount of MNDE on the gauges get them. I expect that a gradual 1% increase would make the change imperceptible, and would thus lead to no real increased interest.
If there is a general uncertainty about a one-time jump to 20%, then a middle path could be:
- One time jump to 15%;
- Empowering the team to increase it another 5% (let’s say) 4 weeks later without an onchain proposal;
- If after seeing the effects the DAO feels that another bump would cause a problem, then anyone can introduce a proposal before that to stop the second bump.
2 Likes
Why don’t we vote on 20% and then empower the team to drop it to 15% if unforeseen issues come up with regards to performance or APY or decentralization impact.
2 Likes
The main reason I could see is that, from purely a psychological standpoint, going from 20%->15% will feel like taking something away from validators, whereas 15%->20% will be giving them something extra.
I expect people will be more hesitant to the potential negative implications of “taking something away”, and thus more hesitant to pull the trigger than they would to suggest “let’s just say at 15%”.
3 Likes
agree let’s get a vote on chain!
Happy to do a quick write-up for these terms , but before that let’s raise this post on Twitter in case anyone missed it and wants to comment, or maybe bring it up on our validator channel - people’s attention was elsewhere the in the last few weeks.
Increasing it is fine but I reallyyy think votes applied to validators need to be weighted in some way according to things like stake weight, commission, vote credits, etc. I don’t see this being helpful to Marinade or Solana at large if we see poorly performing, high commission, well staked validators buying up MNDE to push stake to their own validator in a parasitic feed forward loop.
3 Likes
I’ve put together this proposal draft so we have something to put onchain in case there’s no further discussion.
Increase MNDE governed stake delegation in validator gauges from 10% to 20%
Problem
Marinade’s TVL has not been growing during the last few months. The most powerful growth tool is Marinade’s delegation strategy over stake. This tool has been underutilised in the growth strategy. Making MNDE more attractive to market improves the chance to incentivise growth.
On the validator’s side, due to SOL price, breaking even has become the hardest it ever was. Algorithmic strategy, while not picking favourites, leaves validators competing over differences in performance and commission (and geolocation). MNDE delegation incentivises them to go beyond performance and commission and build a presence in the ecosystem as a scaleable way to break beyond even.
Proposal
- increase the stake delegation governed via validator gauges from 10% to 15% immediately
- increase the stake delegation from 15% to 20% after a an observation period of 10 epochs (~ 1 month)
Rationale
Established by the Proposal 12, voting on stake delegation connects Marinade’s delegation strategy to MNDE token with an aim to raise the number of profitable validators, and by doing so raising the Nakamoto coefficient over long term. The initial slice of of the governable delegation was 10%.
Since then 37,341,079.27 MNDE (on 04/10/22) has participated in governing the stake, 69 validators got some stake delegated and out of those, 22 validators getting a delegation of more than 10000 SOL via gauges. The distribution has become very visible in gauges UI .
Increasing the governable amount of stake from 10% to 20% brings several effects to Marinade and validators:
PROS
- Improve validator’s way to monetize social capital and participation in the ecosystem beyond performance.
- Make Marinade economy more appealing to the ecosystem with the increased MNDE utility (and ROI), in relation with upcoming vote delegation and buying votes (bribes). This increased MNDE value can be used in incentivising new growth.
CONS
- Plutocracy: validators with a surplus of funds can use their increased risk tolerance to buy MNDE and gain even more stake
- Marinade’s delegation approach is its unique selling point over other stake pools. The initial experiment with 10% of governable delegation have not reduced the stakers confidence.
- MNDE liquidity is currently small for large operations like this.
- 1.5% stake cap per validator remains in place with 5 validators nearing this max cap. This change opens up an economical space for other validators to align their incentives with Marinade.
- APY: low performing validators can use their MNDE and social capital to get stake disproportional to the algorithmic delegation
- This is real: currently 31% governable stake is directed to validators who would otherwise not get a stake from Marinade, mostly thanks to their 10% commission.
- Additional changes to voting gauges can be proposed to address this, ie: to cap votes per validator’s performance. The author’s opinion is that this change should be a separate proposal.
Validator stake data used to make observations available in spreadsheet or on github.
To mitigate the delegation risks, voting issues and unknown risks, the increase is proposed in two steps:
- Immediate increase by 5% from 10 to 15% of stake governed if this proposal passes
- Additional increase of 5% from 15 to 20% after 10+ epochs (~ 1 month) of observation, executed by the team and announced via official channels (Twitter, Discord).
Should any harmful behaviour emerge, the analysis and a plan of mitigation will be presented including the plan of executing the additional 5% increase of forgoing the power back to the voters.
What is the expected positive impact of this change?
- MNDE will have twice the impact on steering stake, increasing the ROI for validators and increasing their economical alignment with Marinade.
- Increased governable % stake allows better social coordination over the validators segment.
- Increased MNDE utility should attract more MNDE entering the validator gauges, and by the second effect more MNDE being locked in governance - increasing the MNDE ROI.
8 Likes
Yup I agree with this.
I support increasing the stake up to 20%.
Bit also has to be implemented changes in voting system
Today the voting in gauges system is unpredictable:
- your stake share in the stake can change at any second;
- voting results are counted in addition to the Marinade score, and are not a separate “under fund”
- rebalancing, which is carried out every epoch;
- not being able to get the stake right away.
Validators can’t build the proper business plan due to high volatility of the gauges.
I would suggest adding predictability in gauges in the next way!
- Creation of a “sub-pool” - SOLs, which will distributed according to the voting results into a separate pool and allocation algorithm and
- Do not take into account marinade score.
- Define minimum acceptable criteria for delegation (like in Solana Delegation program):
- max commission 10%;
- uptime.
Exclude DC concentration.
4. Changing the voting algorithm and stake distribution. In particular:
- Determination of the period during which it is possible to vote.
- Determination of the period for which voting results are fixed.
Example,
from 01,10.2022 to 15.10.2022 there is a vote for the stake, which validators will receive for the next 10 epochs (approximately 1 month)
from 16.10.2022 to 15.11.2022 (the distribution of the stake takes place, regardless of the results of the Marinade score)
from 01.11.2022 to 15.11.2022 there is a vote for a stake, which validators will receive for the next 10 epochs (approximately 1 month)
from 16.11.2022 to 15.12.2022 (the distribution of the stake takes place, regardless of the results of the Marinade score)
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Definition in the delegation strategy criteria for immediate unstake during the period of fixation of results (in the example, it is from 16.10.2022 to15. 11./2022). Example,:
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raising commission
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uptime less than 90%
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inclusion of a node in the superminority group.
Cherry, ser, could you please move this to a new thread and use the proposal template?
It should help the readers understand not only what you a proposing but why you are proposing in the way you do, as connected to a problem.
For example,
- why a new pool is needed and not just delaying the vote results application by a number of epochs.
- why should Data Centre concentration be removed? It’s likely the most predictable state.
- why 10 epochs? how does it help make validators react quickly to network incidents and not hurt staker’s APY.
This proposal was moved to an on-chain vote.
ok!
Will do!
Happy to continue the discussion