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)
-
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,:
-
raising commission
-
uptime less than 90%
-
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