Nxt Forum

Please login or register.

Login with username, password and session length
Advanced search  

News:

Latest Nxt Client 1.11.10 - NEW RELEASE: Ardor 2.0.5e TestNet - The Ignis ICO is over!! Ardor genesis snapshots will happen at Nxt block 1,630,000 (expected for 25th December)

Pages: [1]

Author Topic: Proposal: Node Incentive Program  (Read 1859 times)

cobaltskky

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 2346
  • To make more better goodness.
    • View Profile
    • NXT Film Project
  • Karma: +226/-138
Proposal: Node Incentive Program
August 08, 2014, 02:05:35 am

Hello!  I would like to propose the following incentive program, based on discussions in this thread:

https://nxtforum.org/infrastructure-committee/supporting-nsc-with-inffund/

Anybody who has been keeping up with that thread understands that NSC alone is failing to incentivize the maintenance of dedicated nodes.  The price of NSC on the NXT AE has plummeted over the past few weeks.  NSC alone is unable to encourage the running of nodes or establishment of new nodes.  We have remained stagnant at approximately 290 dedicated nodes over the past month.  The NXT infrastructure needs to expand in order create a stable network from which to launch new features and marketing campaigns.  It is the responsibility of this community to provide a robust, resilient infrastructure for new NXT adopters that we invite onto our platform.  Providing such a platform will decrease hesitancy for commercial enterprises to bring their business to NXT.

During the infancy of our platform, InfraComm funded dedicated nodes.  The number of nodes grew.  I believe to around 1000.  When the incentive stopped, the number of nodes drastically decreased until now we're consistently at around 290 nodes.  The incentive program worked, but was unsustainable at the level that InfraComm was funding it.  With the advent of the NXT asset exchange and the Dividends UI, we have new tools at our disposal for creating an incentive program.

We cannot rely on small bagholders to leave their client open and forging.  At current transaction volumes, the reward per block is minuscule.  For small bagholders, time to forge is prohibitively long.  There is very little incentive for them to forge.  I will not be addressing this concern directly.  Rather, I wanted to make it clear that this is not a viable alternative to dedicated nodes until such a time that transaction volumes increase and/or the chance for a small bagholder to forge a block significantly increases.

I propose that InfraComm set aside a fixed amount of NXT for funding of a node incentive program to run for the next six months.  InfraComm will review the program in five months to assess if it has been successful in increasing the size and reach of our infrastructure.  At that point, InfraComm will decide if the program should continue based on the success of the program, it's sustainability, and the current need for facilitating the growth of the network through such an incentive program.  If an undistributed amount of funds remain at the six month mark, InfraComm will have the right to do with the funds in any way they see fit.  If the projected growth of our infrastructure is such that the fund is in danger of running out prior to the five month mark, InfraComm will gather to assess the data and determine the fate of the program at that point rather than wait until the five month mark.

I propose that we use the NSC asset as a token to determine which accounts receive incentive money.  The NSC asset has an existing distribution mechanism in place and a following among several node operators.  This will allow us to quickly begin delivering the incentive, rather than wait for a distribution mechanism to be put into place.  Those node operators who have accumulated NSC will be immediately rewarded for their dedication toward maintaining our infrastructure.  As incentives are paid out, the value of the NSC asset will attain an increased market value.  NSC holders can then choose to hold for the incentive or sell for quick cash.  Individuals who would otherwise not have dabbled in NXT, will be attracted to our community.  Once there, we can show them the value of the NXT platform and encourage them to stay to help us in supporting our community.

NSC is currently distributed under the following schedule:

Distributed weekly on Sunday

Forgers:

1 NSC earned per forge block
A cap of 10 blocks per day per account (***CURRENT*** cap)
A cap of 1 block per day per account (***UNDER THIS PROPOSAL***)
Qualifying forging pools are exempt from the cap (***MAINTAINED***)

Note that allowing large bags to be broken up to multiple accounts, logged in on multiple NRS clients, encourages proliferation of forging nodes.

Node operators:

Earnings depend on the amount of NXT in the account associated with the hallmark:
- less than 1000 NXT: 0.02 NSC per day per node (for the small stake holders/node operators)
- 1000 - 9999 NXT: 0.5 NSC per day per node (normal)
- greater than 9999 NXT: 3.5 NSC per day per node (more trusted nodes)

Note that staggering the NSC earnings encourages people to invest and hold in NXT.  The proposed incentive program will encourage node operators to do so.

Also note that the above fee structure can be changed with the advent of this program.  Once the incentive program begins, the fee structure will be fixed for the duration of the program.

Proposed distribution schedule for the incentive program:

Distributed every week, one day after the NSC distribution for the week
A set fractional amount of NXT is distributed per NSC
Any NSC account holder (except for the NSC distribution account and asset issuer account) is eligible to receive incentive money

I have put together a spreadsheet at the below link that covers projected node growth, NSC distribution, and incentive distribution.  I projected NSC distribution/node growth at 5% over the previous week.  I think this is as accurate as I can get without any historical data on such an incentive program.  If anybody can offer a more accurate growth curve, I'd be happy to update the spreadsheet. :)  I've included a cell to quickly adjust the growth percentage if you want to see how different growth rates affect the distribution amount.  I've included several columns that represent different options for the fractional amount of NXT.  I started at .025 NXT/NSC as the minimum at which we can encourage node operation, as I feel this the bare minimum that will still provide an ROI that encourages node maintenance.  I think the amounts chosen give a good spread from which InfraComm can select.

Further down in the spreadsheet, I included projections on the payout for a node operator coming in fresh to the community, and for a new forger who receives the cap of 1 NSC per day.  These numbers are my basis for feeling that .025 NXT/NSC is the floor for the payout.

https://docs.google.com/spreadsheets/d/1MCiYdp7ghN-1SlXlU9kks8dJ6RqWWz1Ug7oReeIj0Qk/edit?usp=sharing

I understand that the spreadsheet represents a simplified mathematical model to represent the proliferation of nodes and number of node operators as word of the incentive program spreads.  I think it's "good enough" from which to make a decision, especially due to the lack of historical data on which to base a more accurate model.

Please share your thoughts and feelings on this matter. :)  Consider this OP a draft for the interim:  I can update this OP with added/different verbiage as the discussion progresses, until we have a finalized proposal to present to InfraComm.
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬  ▄▀▀▀▀▀▀▀▀▄  ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬●  nimirum  ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬ ◖ENDING CENSHORSIP ONLINE◗  ◖ ICO OPEN NOW◗ ▬▬▬

abctc

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 1353
    • View Profile
  • Karma: +147/-13
Re: Proposal: Node Incentive Program
August 08, 2014, 08:13:02 am

First of all, many thanks for your hard work, cobaltskky !
I propose InfraTech committee to award cobaltskky for this efforts (have sent a small tip too).

Back to NIP (Node Incentive Program).

1) I think with Nxt POS model we need to stop paying NSC for blocks. Why rich account would became richer?  Even 10k account forges almost zero blocks per month.

2) Lets make rough estimation (for new participants). Each node for VPS leasing needs at least 5$ / 0.04$/NXT = 125 NXT per month => 4.08 NXT/day . This number is close to current 3.5 NSC/day => ~ 1 NXT/NSC of dividends (incentive money). It is not even near to proposed .025 NXT/NSC or 0.2 NXT/NSC.

3) 4.08 NXT per day per node equals to "only" 8`280 NXT per week for all 290 nodes. But if you want to pay the incentive money in the form of dividends (as proposed in NIP), you need to pay 8`280 + 62'664 (NSC in circulation) = 70`964 NXT every week. It is too expensive.

4) The current NSC asset is a donational asset. It is backed by donors. The only reward for NSC holders that was promised by ebby was his RasPi thing. So why this donors (big NSC holders) would receive dividents for their NSC ?  It is wasting of Infra fund.

5) Paying NSC first, and incentive money next day means double commission. Not good.

6) So I propose to issue new network securing asset (say, NSI - network securing incentive), to distribute it weekly to hallmarket nodes at 4 NSI per day, and simply put 8`280 NXT/NSI buy wall every week. 8289 is a subject of correction if number of nodes grows to a upper cup, say 1000 hallmarked nodes.

7) What to do with old NSC asset? I propose to buy it back partially with Infra fund at 1 NXT/NSC rate. Just put, say, 5000 NXT buy wall several weeks in a row, until only donors would be left (who won't sell their NSC).

8) It is also possible not to issue new asset, but simply put 8280 + 5000 NXT/NSC buy walls several  weeks in a row, and then put only 8280 walls.
Welcome to the Nxt generation of crypto!   Magis quam Moneta (More than a Coin)
"Do not worry, it is an attack" (c) Jean-Luc

Vyazhan

  • Full Member
  • ***
  • Offline Offline
  • Posts: 110
    • View Profile
  • Karma: +20/-0
Re: Proposal: Node Incentive Program
August 08, 2014, 12:04:07 pm


Back to NIP (Node Incentive Program).

1) I think with Nxt POS model we need to stop paying NSC for blocks. Why rich account would became richer?  Even 10k account forges almost zero blocks per month.

2) Lets make rough estimation (for new participants). Each node for VPS leasing needs at least 5$ / 0.04$/NXT = 125 NXT per month => 4.08 NXT/day . This number is close to current 3.5 NSC/day => ~ 1 NXT/NSC of dividends (incentive money). It is not even near to proposed .025 NXT/NSC or 0.2 NXT/NSC.

3) 4.08 NXT per day per node equals to "only" 8`280 NXT per week for all 290 nodes. But if you want to pay the incentive money in the form of dividends (as proposed in NIP), you need to pay 8`280 + 62'664 (NSC in circulation) = 70`964 NXT every week. It is too expensive.

4) The current NSC asset is a donational asset. It is backed by donors. The only reward for NSC holders that was promised by ebby was his RasPi thing. So why this donors (big NSC holders) would receive dividents for their NSC ?  It is wasting of Infra fund.

5) Paying NSC first, and incentive money next day means double commission. Not good.

6) So I propose to issue new network securing asset (say, NSI - network securing incentive), to distribute it weekly to hallmarket nodes at 4 NSI per day, and simply put 8`280 NXT/NSI buy wall every week. 8289 is a subject of correction if number of nodes grows to a upper cup, say 1000 hallmarked nodes.

7) What to do with old NSC asset? I propose to buy it back partially with Infra fund at 1 NXT/NSC rate. Just put, say, 5000 NXT buy wall several weeks in a row, until only donors would be left (who won't sell their NSC).

8) It is also possible not to issue new asset, but simply put 8280 + 5000 NXT/NSC buy walls several  weeks in a row, and then put only 8280 walls.

I want to thank cobalt as well for having put up a very well written and formulated program and everyone that is invested in NSC should consider doing the same as abctc :)

Now, about the program and the comments already given about it:

1.) I must agree with abctc on this one. I do not see the reason for rewarding forgers that already receive an incentive in the form of NXT. Actually I honestly believe the reason why people start nodes is because they realize that unless they have around 100k NXT to start with, no forging will ever yield any substantial reward. Besides, having strong 24/7 nodes on the network is much more rewarding than a 5 hour, port-forwarded 30kb upstream forging PC :D

2.) I disagree here. I think we do not need to change the actual value of the NXT/NSC. I think it is fine that people can sell NXT or NSC and get rewarded for smart trading and try to keep the value stable in relation to NSC, keeping in mind it would probably adapt to the new program and be worth much more than the current value.

The proposal takes into account that you get EITHER a direct reward for selling your NSC in form of NXT directly or a longer, over-time reward for holding your NSC to get a weekly dividend of your NSC in possession (correct me if I understood this proposal wrong)
The funds would not be directly released to the market on the AE but instead would be given to the asset holders in form of a dividend. The entire reason for this proposal is to disengage from NSC being dumped and then dump-bought by the committee for 1NXT each.

3.) See 2.)

4.) The entire reason for the proposal is to change it away from a donational asset towards an asset with real backing in order to incentivize more people to participate as we have seen that by donations alone, this asset will not survive as it is just being dumped in a ratio not sustainable by the small donor-circle of NXTers.

5.) See 2.)

6.) This way, why do we need the NSI in the first place then? We can just keep the NSC and have the committee buy it off us every week and have the same problem that NSC have no value at all and are just tokens of exchange for the committee to see that someone did a Proof of Node.

7.) See 6.)

8.) See 2.) and 6.)



« Last Edit: August 08, 2014, 12:06:26 pm by Vyazhan »

colin012

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 851
  • NXTOrganization Marketing
    • View Profile
  • Karma: +65/-17
Re: Proposal: Node Incentive Program
August 08, 2014, 04:37:49 pm

There is an additional node incentive program I want to build as part of Project Sentinel. This program would not only reward people for running nodes, but also for how resilient their node is. This would motivate people to secure their nodes as best as possible.

I have been informed by lyaffe that there are already existing APIs to run these kinds of tests with Java. One such API is the Apache JMeter. I haven't had time to look much into JMeter yet, but to my best understanding, it requires a pretty powerful machine to run effectively. That is something I cannot provide on my own but that I think would greatly benefit the NXT network.

Perhaps a dedicated server for testing NXT Nodes for resilience to DoS would be something that could be part of the NIP rather than part of Project Sentinel? We not only need more nodes, but also stronger nodes. One very strong node in much better than 20 weak nodes.

I am willing to swallow my pride a bit here and admit that I don't have the resources to pay for a server like this or to pay NXT to holders of SentinelC. In fact, I am even willing to give the Project Sentinel account over to Infra Com if they could make better use of it than I could.

However, Project Sentinel doesn't just aim to provide incentives for improving the NXT Infrastructure, but to provide incentives for anything that improves NXT Security, because, having written the paper on NXT security, I see a need for it.

Just another suggestion, but what if Infra Com paid out NXT to people who hold SentinelC? This would encourage a number of NXT Security related improvements such as development of new security features, securing nodes, providing articles on NXT Security (both network and personal security), and white hat hacking of those who want it done (and ONLY those who want it done!)...

If Infra Com did this, I would be more than happy to share control of the Project Sentinel NXT account with Infra Com! However, I also have to consider that NXT Organization might do the same thing more efficiently...
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬  ▄▀▀▀▀▀▀▀▀▄  ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬●  nimirum  ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬ ◖ENDING CENSORSHIP ONLINE◗  ◖ ICO OPEN NOW◗ ▬▬▬

chanc3r

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 1019
  • NXTInspect
    • View Profile
  • Karma: +124/-50
Re: Proposal: Node Incentive Program
August 08, 2014, 09:43:53 pm

Cobalt, I like the updated OP - until this bit... Then I disagree..

Quote
I propose that InfraComm set aside a fixed amount of NXT for funding of a node incentive program to run for the next six months.

As per my notes in the other thread, with the transactions levels at the moment, the uncertainty in block speed reliability (core change needed) and lack of understanding of TF needs I think funding of this initiative with community funds is too soon...

We need to stimulate the community to get behind it - by all means run it, by all means distribute NSC and encourage ASSET ISSUERS to donate assets, people are running nodes then to support the business vested in NXT success and eventually those assets will start to pay out (some of them anyway) and you can pay dividends from the proceeds, this will make a more self sustaining proposition.

Later when we really need to boost the infrastructure because of the network utilisation and TF we can then enhance direct fundraising for NSC as it will then be an established way to support the network.
NXT: 29996814460165 (NXT-JTA7-B2QR-8BFC-2V222)
@imrimr @NXTinspect

EvilDave

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 1791
    • View Profile
    • NXT Foundation
  • Karma: +341/-40
Re: Proposal: Node Incentive Program
August 09, 2014, 10:29:30 am

Hmmmm......much information for my little brain.

I think that a combination of the CobaltSkyy and chanc3r approaches would work best.

The NXTwork needs to be encouraged to grow, and it should be funded/supported by the people that gain the most benefit from it: ie asset issuers/NXT based businesses.

@Cobalt: do you have the time to approach Asset issuers to get them on board with this?
Like to have an in-depth chat with you on this, could you catch me on Skype:
evildave1967 (at) gmaildotcom.



Nulli Dei, nulli Reges, solum NXT
NXT Donations: NXT-BNZB-9V8M-XRPW-3S3WD
We will ride eternal, shiny and chrome!

cobaltskky

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 2346
  • To make more better goodness.
    • View Profile
    • NXT Film Project
  • Karma: +226/-138
Re: Proposal: Node Incentive Program
August 18, 2014, 11:15:59 am

After speaking with EvilDave yesterday, I would like to make the following changes to my initial proposal:

- Decrease initial program time to three months(13 weeks).  Infracom will review the program at the ten week mark for a decision on continuation, termination, or adjustment-continuation.

The estimates are here:  https://docs.google.com/spreadsheets/d/1MCiYdp7ghN-1SlXlU9kks8dJ6RqWWz1Ug7oReeIj0Qk/edit?usp=sharing

 - Transfer fees were not included in the total payout estimates, as it's difficult to estimate how dispersed the NSC distribution will become over time.  Right now, 533 accounts hold NSC.  If this holds steady, we're looking at ~7000 NXT needed to perform the distribution over 13 weeks.

- The payout amount will be .1 NXT/NSC, to be distributed on a weekly basis prior to the distribution for NSC.

- The funds for payout will be supplied by InfraComm and businesses that operate on the NXT platform, at a ratio of 1:1.  72.5k for InfraComm, 72.5k for businesses.  I will begin asking businesses this week if they are willing to contribute to the program.

- The initial funding needed is set at 145,000 NXT.  Any funds remaining at the end of the program will be returned - half to InfraComm, half divided among the businesses that contributed, proportional to the amount that they contributed.

- I will manage the fund and distribution, unless a trusted member of the community would be kind enough to step up to fill this role.

To all those who voiced certain concerns over my original proposal, do these changes address your concerns?
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬  ▄▀▀▀▀▀▀▀▀▄  ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬●  nimirum  ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬ ◖ENDING CENSHORSIP ONLINE◗  ◖ ICO OPEN NOW◗ ▬▬▬

farl4bit

  • Global Moderator
  • Hero Member
  • *****
  • Offline Offline
  • Posts: 3439
  • Go Nxt!
    • View Profile
    • Blockchain Startpagina
  • Karma: +210/-45
Re: Proposal: Node Incentive Program
August 18, 2014, 11:34:51 am

In my opinion NSC does not need to reward forgers who find a block, they already receive the fee. That's how Nxt is build. As a result NSC becomes a bit more scarce.  It's not enough to raise the price, but al small things can help.

abctc

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 1353
    • View Profile
  • Karma: +147/-13
Re: Proposal: Node Incentive Program
August 18, 2014, 01:00:08 pm

...
- The payout amount will be .1 NXT/NSC
...
To all those who voiced certain concerns over my original proposal, do these changes address your concerns?
- so you propose to pay a weekly dividends to all NSC stakeholders. There are more then 60`000 NSC in holdings.

But there are only 3`047 NSC in all sell orders.

Could you answer my questions:

a]
Quote
4) The current NSC asset is a donational asset. It is backed by donors.  So why this donors (big NSC holders) would receive dividents for their NSC ?
Personally I own a LOT of NSC.
But I think it is wasting of Infra fund to pay dividends.

b]
You propose to pay more than 6`000 NXT worth of dividends weekly.
How much of NXT per week will receive a fresh node-owner ? Per month?  We do want to grow from 290 nodes to 1000 nodes, don't we? So we need a lot of new node-owners...
Quote
2) Lets make rough estimation (for new participants). Each node for VPS leasing needs at least 5$ / 0.04$/NXT = 125 NXT per month => 4.08 NXT/day
Welcome to the Nxt generation of crypto!   Magis quam Moneta (More than a Coin)
"Do not worry, it is an attack" (c) Jean-Luc

cobaltskky

  • Hero Member
  • *****
  • Offline Offline
  • Posts: 2346
  • To make more better goodness.
    • View Profile
    • NXT Film Project
  • Karma: +226/-138
Re: Proposal: Node Incentive Program
August 18, 2014, 02:49:27 pm

Your using current market value in your calculations. The price is expected to rise in the next three months. Check he spreadsheet for how much a fresh node operator staking 10k Nxt will receive over the he course of the three month program. I believe it's a little over 200 nxt.
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬  ▄▀▀▀▀▀▀▀▀▄  ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬●  nimirum  ●▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
▬▬▬ ◖ENDING CENSHORSIP ONLINE◗  ◖ ICO OPEN NOW◗ ▬▬▬
Pages: [1]