Pre-HIP : Max keys + max keys per node + max keys per validator per shard + dynamic keys limitation

Governance Validator DAO
62

Correct me if I am wrong but rather than being Harmonious and working together, it sounds like your idea of Harmony is for you to have 200 Million ONE, and the smallest of the 1000 validators to have less than a million.

Those in the middle will have to fight you tooth and nail putting in work day and night to try to take your delegates away, otherwise, too bad for them and who cares if in a short while later when people realize the situation, or if there is a price drop, they start dropping their validators due to no profits. Who cares if it goes down to just a few validators?

I was under the impression that Harmony cared, when they asked us to get to 1000 validators. That is the only reason I am asking you to work with us and understand what I am saying. Or tell me that my math is wrong and correct it so we know how the future will play out.

4 Likes
63

My idea of Harmony is a secure blockchain with equal participation and perfect competition that’s designed to last indefinitely.

1 Like
64

That would work great on a blockchain with a large supply of tokens, but Harmony just doesn’t seem to be that blockchain with only 7.5 Billion able to be staked.

If Harmony decides they want only 200 validators total or say only 50, then we can base the math off of that number or it may not even be a concern at all due to the supply to validator ratio.

Currently they want 1000 validators which leaves my math there for everyone to review and correct.

2 Likes
65

There are many ways to reach 1,000 validators and that is where a matter of opinion comes into play. Our opinion is if the goal is 1,000 validators, it should be 1 key per validator, but it’s unlikely that would pass. Good discussion nonetheless and I look forward to reading more suggestions from you going forward.

2 Likes
66

Just a reminder, limiting the number of bls keys doesn’t prevent a delegator to delegate his ones on your validator.
If a delegator feel safer to delegate on a large validator and accept to have a bit less rewards, it is fine.

4 Likes
67

No disagreement there, but that’s not much of a free market, is it?

1 Like
68

Trust me, when I started validating Harmony in 2019, it was proof of work and validators were rewarded for each block they produced regardless of stake size, and it was much easier not worrying about keeping delegates or the risk of losing election if I didn’t maintain uptime. Is Harmony’s intent to migrate back towards a proof of work network or are we sticking with proof of stake?

2 Likes
69

Thank you for the discussion @ValidatorONE,

I look forward to more talks as well. Please just keep an open mind and heart as we navigate these rough times and try to get to wherever Harmony Teams vision may take us.

Thanks @ONE4All for that info. It definitely is not guaranteed that the delegations will spread even if we limit keys or give rewards in a different way to delegate to smaller validators. The only way is to force delegates to move but I don’t think that has been a part of any of our discussions as far as I know. The key is to try to entice the spread of the delegations with the support of the big validators instead of working against them.

With that said we do not want the ones who work with us to be the only ones to lose delegates. We do need to talk about how to entice the whale accounts on the exchange validators to move around possibly before this would all work?

3 Likes
70

Just like you @AffinityShard , I am doing the math.

With no limit in number of keys and a free market (without any rules), we have the risk to see only a few super validators controlling the whole stake at the end of the day.

I feel like the EPoS system was designed initially to have one key per validator. In that situation, yes, the protocol would balance the validators.
But currently a validator can have almost unlimited keys which makes the EPoS quite deficient imho.

3 Likes
71

@ONE4All, we are not opposed to security measures like a key cap per shard to limit a single validators ability to takeover a shard. What we’re opposed to is using BLS key limits as a means of controlling where delegators stake their ONE. In our opinion, there’s a distinct difference between the two.

2 Likes
72

Great discussion! I like to figure everything out with math too. It was my understanding that harmony doesn’t have a max supply to be scalable though, so it makes it tougher to do the math thinking in the future. I’ve personally watched validators go from not-elected to having close to 100 million staked. What I notice the most is the ones that are succeeding are the ones putting the most into it and being active. Us small validators should be looking at them as examples of what works and how to succeed being a node operator for harmony. These validators have also been actively helping new validators because they care about harmony protocol and are just genuinely nice people and it’s in their nature.
When I first came into this discussion and voted on capping bls keys I admit that I didn’t really understand and I wasn’t looking into the future scope of resharding and all the other factors that will change.
There is so many things to learn becoming a validator and it’s very time consuming to be successful. I’m going to keep reading all these bls key discussions, I’m always hesitant to put my input in because I know that I need to know more about the impacts each option mat cause. I’m glad we have a mostly harmonious group of diverse people here to get input from.
Shoutout to Fortune.ONE, Strongmindshold, and EasyNode you guys rock! I wouldn’t be here if it wasn’t for you! Thank you for doing all you do. Also a huge thank you to the entire harmony community for being so helpful and harmonious :blue_heart:
I believe if security is the main focus of everything, we’ll be fine. Opportunity is there for new validators, it just takes a lot of effort. lowering the self stake and being able to combine stake with a bigger validator to get rewards for delegators would be the best catalyst for more validators in my opinion.

3 Likes
73

These are numbers I pulled from other peoples quotes online so correct any mistakes but here is the data you need.

“It also has a circulating supply of 8.75 billion ONE coins and a max supply of 12.6 billion.”

"The 12.6bn max supply contains all the coins that were minted at inception of the chain and are being released over time, like IEO, Private Sale, Team-allocation, foundation, etc. More than 2bn of them are still locked and will be released until 2025.

On top of that there’s a 442m a year issuance in block rewards that are paid to delegators & stakers. Those are minted on as needed for just over a year now.

12.6bn (initial issuance) + ~600m block reward (so far)= 13.2bn Total supply"

"Some might be a miscalculation on CoinMarketCap, but another explanation can be the tokenomics, specifically the annual issuance for validator rewards. There’s an amount of ONE generated annually specifically and only to be used as validator fees. The tokenomics model has this value reduce as transaction volume increases on the network. As transactions increase, validator fees are more taken from transaction fees and less from annual issuance. Over time, this leads to zero issuance and 100% reliance on transactions.

It’s not different from many other Proof-of-Stake tokenomics, and the model has the network reduce issuance to zero. Check out the article here:

===================

Adding additional info - an excerpt from the article:

Transaction fees
One of the potential problems of Bitcoin’s economic model is that it is unclear if or when transaction fees will be able to compensate for the decreasing block reward issuance. This presents a potential time bomb within the protocol. For any protocol to survive in the long term, it will need to bring in enough transaction fees to at least sustain the cost of operating and securing the network. However, it’s nearly impossible to predict when transaction fees will be adequate to sustain a network in place of issuance.

Our model solves this problem by allowing transaction fees to offset issuance. Thus as network usage increases, issuance decreases by the same amount. When the network is fully mature and can sustain itself on transaction fees alone, issuance will naturally fall to zero. *** Rather than trying to predict the future, we structure our model so that it adjusts automatically when the timing is right. This way we get the benefit of a stable source of funding to secure the network while also maintaining the potential to have a finite supply of ONE tokens like Bitcoin. ***"

==================

If this is all true then Harmony does have a finite supply and will only generate new tokens as block rewards until the transaction fees can support the network without the need to generate new tokens. It also means that around 442 Million tokens would be generated a year for possibly only a couple years, but could be longer, I don’t know.

If this is all true it looks like the math won’t change too drastically anytime soon as the amount of Harmony able to be staked will only grow a small amount each year in comparison to the amount of validators who would be looking to get to 200+ Million stake. Plus how much out of that 442 Million each year will actually get staked with a small validator? Relying on newly generated tokens to have enough to spread out to everyone does not seem like a reliable plan for success. Especially since that generated supply could end at any time permanently.

If the generated supply kept going for years it is possible that enough could be generated for 1000 validators to be online with no caps, but this would take years and there is no guarantee that is how it would work out.

3 Likes
74

I absolutely agree that they are active and helpful and nice and I haven’t had one problem with anyone here. This is a great group of people. Thank you all for being here for each other.

My only concern here is that, correct me if I am wrong, but most of the big validators have been here a long time. How hard is it to grow that big when there are only 20 or 50, or even 100 validators total online? Now there are 150+ going on 200, then 1000. Think about the ONE stake to validator ratio then compared to later, when there are 1000. As that number grows the competition gets stiffer and stiffer, the amount of ONE not already staked gets lower and lower and lower. If we had all started at the same exact time I could 100% agree with your statement. The reality though is that they may have had a much easier time getting delegates because there were a lot of delegates actively looking for somewhere to stake with and not a lot of options to do so.

Using the math for Stake available to Total validator ratio. The more validators that come online, the exponentially harder it becomes for each new validator to succeed the same way the validator before them did. If all 1000 of us came online at the same time and some worked harder and grew bigger than others, that would be considered a fair comparison of how working hard nets you greater rewards. It feels like we are comparing apples to oranges when we talk about getting delegates then vs getting delegates now as a small validator.

5 Likes
75

Total supply is different than max supply. I can’t seem to find a max supply anywhere. The big picture of being open consensus for 10 billion would leave one to believe that the max supply could get higher. I’ll have to do some more digging on it.

The fact that the big validators have been around the longest also means that they have delegators that have been holding the longest. That means a higher chance of losing that delegation for profits. In time it should even out to more validators reaching those higher levels the longer they put the effort in.

I just think everything takes time and patience and a lot of critical thinking, so the more we have these conversations the better. I can tell that you are a critical thinker with a good mind that likes to solve problems. You and your brother I are great assets added to this community that I’m proud to be a part of. I wish you the best of luck on this journey :blue_heart:

3 Likes
76

I agree with @AffinityShard , it’s hard to compare the situation of the first validators with the new ones.
It is pretty clear that it is more complicated right now to reach a high stake (price is higher, more validators, etc.) and I think it should not be an objective for a validator to reach 50M or more.

If you are here for the success of the protocol, you need more validators, not more large validators imho.
If we only had 50M+ validators, their number will be maximum 87.

Back in June, 9 validators had the control of 1/3 of the total stake. This number dropped to 7.

7 Likes
77

I don’t think a validator should have any objectives besides doing what’s best for the protocol and their delegates. Reaching at certain total stake should be organically grown from doing your best in my opinion. I agree things are different now but there is still free choice.
The objective now is to get new Validators up to medium stake and signing. We’ve had record numbers of Validators elected over and over so it’s gaining just not as fast as we’d like it to. I appreciate all your efforts in helping us get to a resolution. I’m not trying to disagree with anything you say. I’m just trying to participate more in the discussion :slightly_smiling_face::blue_heart:

4 Likes
78

This is exactly what’s happening.

3 Likes
79

Lots of great points and discussions here. I do appreciate thinking so far into the future. It’s one thing that I always do about nearly everything in life. Think of every possible outcome, think far into the future, and act now accordingly. The fact that one day Harmony plans to have 1000+ validators is a very important thing to consider. Although we do have to remember that right now our focus is getting 200 elected validators by EOY and getting the validator part of Harmony fully decentralized. A very very very important step for us to achieve ASAP. Also, remember that we can add more shards as time goes on and therefore more BLS keys. 250 per shard. Let’s focus on our current goals and reach them first, and then we can focus on the rest as needed. Remember we can always bring up proposals later and change things as needed as well. The changes that we make now do not necessarily have to be permanent.

1 Like
80

If you are saying you’d agree to 1,000 keys and 1,000 validators, let’s create a new “pre-HIP” discussion

I think your support - being one of the largest validators on Harmony - would carry a lot of weight

For reference: On the front page of Harmony’s website it literally states “1,000 Validators” as one of the protocol’s features. That is currently an impossibility given how the protocol is at present

2 Likes
81

Everyone,

We didn’t speak much about the other proposals I made into this pre-hip and I would like to have your opinion on the dynamic key limitation :

@RoboValidator @ValidatorONE, since you guys were participating in this thread, do you have an opinion on this one?

2 Likes