Type: Contracts
Authored by Scott Lilliston
Table of Contents:
Abstract
Motivation
Specification
Rationale
Backward Compatibility
Security Considerations
Abstract
Currently the bottom 70 validators (by total staked) on the PoS network control less than %10 of the collective stake. The bottom 40 validators (by total staked) control only %1 voting power. Creating a partially shared staking mechanism, shared by all validators with a mechanism to consistently raise the overall stake of the lower half of the validator set, will disburse voting power throughout the validator set thus reducing risks of centralization.
Additionally, creating a partially shared staking model will allow the entirety of the validator set to receive rewards which will continually offset operational costs and incentivize performance for the entirety of the validator set. This proposal outlines the considerations for such a shared staking model.
Motivation
Motivations for creating a partially-shared staking model within the Polygon PoS network are:
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Work toward a more equitable voting power distribution amongst the validator set and create a rewards model whereby the entirety of the validator set can see a reward share which will guarantee an offset of operational costs.
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Benefit the validators who have successfully amassed large retail stakes and benefit the entirety of the validator group who also contribute to the success of the network.
Incentivize all validators to meet network performance thresholds to participate in the shared stake awards. -
Decrease Stake Centralization: Partial distribution of stake works toward a gradual leveling of voting power and block production.
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Drive Network Performance levels of the validator set by Incentivizing validators in the lower bounds of staking hierarchy via shared stake awards.
Specification
Newly staked MATIC/POL tokens will be staked to the designated validator as chosen by the delegator with %20 of the amount being shared and staked within the validator set in two ways:
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Half of the %20 split will be shared evenly amongst all other validators and applied toward their overall stake.
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Half of the %20 split will be shared evenly amongst the bottom 50 validators (by total stake at the current checkpoint) and applied to their overall stake.
The proposed partial distribution model will be applicable ONLY to newly staked MATIC/POL tokens and to tokens being UNSTAKED and RESTAKED to a different validator within the network.
All Validators will retain all of their current stake at the time of implementation.
To incentivize performance from all validators, only those in top standing will receive shared stake. Even validators within grace periods will not qualify for the shared stake awards.
Once validators return to top performing levels above the benchmark, they may receive their portion of the shared stake.
Rationale
Gradual increase of the total staked amounts of the lower half of the validator set, without changing the current overall stakes of the validators, offers several advantages:
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Does not affect validators current rewards expectations.
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Raises the floor of overall stake for the bottom half of the validator set over time and constantly pushes those validators in the lower half toward the median.
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Gradually evens out voting power amongst the middle of the validator set.
Backwards Compatibility
The shared staking model will not need to be backwards compatible as it is intended to be applicable for newly staked or unstaked and restaked MATIC/POL. Existing validators and network operations should not be affected by the implementation.
Test Cases
To ensure the success of the shared staking model implementation, the following test cases will be conducted:
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Performance Testing: Evaluate the development of smart contracts required to affect the shared staking model and monitor the network’s ability to handle same, focusing on transaction processing times, block generation, and overall output.
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Stability Testing: Monitor the network for any signs of instability or degradation in performance following the implementation of the shared staking model.
Security Considerations
Security remains a top priority during the execution of smart contracts or the staking UI. Security measures will include:
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Enhanced monitoring and alerting systems to detect and respond to any abnormal activity.
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Suggested implementation of best practices for validator operations.
“The best outcome will come from the individuals doing what’s best for themselves and for the group.”