DISCLAIMER: I’m not always on top with the most recent news about Lisk and the anticipated steps for the near future. Forgive me if some assumptions are wrong or numbers are slightly off. This is just me thinking loudly about a system i believe is greatly flawed and making an appeal to the community to rethink it, hoping that personal greed can be objectively set aside for a moment to discuss the greater good of the currency as a whole
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With the recent surges in price… is the current system with 101 active delegates being paid a fixed amount of LSK for every block still reasonable?
Most people who are active delegates now have been there for a long time and probably have earned a good amount of LSK so far. They probably already own a huge bunch of LSK for being lucky enough to stumble over it when prices were still low and having the faith or pocket money to buy.
With LSK rising in price, it’s less likely for new people to invest even a small amount of LSK for voting. Its also less possible for people to reach the balances required by some of the pools.
So apart from the fact that its fine that some really clever people a long with some lucky first day youtubers get their chunk of wealth, isn’t this just creating an elite circle which is more manifesting daily by the system itself?
As of now ~9.1Mio LSK have been generated via forging. At 7.20USD right now this already sums up to 65Mio USD. Prices are expected to rise. Transaction amounts are expected to rise. The planned reduction of forging rewards seems to be insignificant.
Having just 101 active delegates seems just too little when looking at the rewards these people get and makes me hope, that these 101 spots will be taken over by low-fee pools so that everyone in the community can have their PoS-share and not just the elite.
Sadly this completely contradicts the idea of the AD-system itself, which inherently is great, just flawed in its current execution as it creates the wrong incentive to be part of it. Will people actually do whats in the best interest of the currency or just what’s best for their wallet? I would argue that the current system encourages the latter.
With the current system, the best thing that can happen would be 101 pools taking 101 spots and each of them sharing 100% of the remaining earned LSK after maintenance costs. Let’s hope for that as i seriously doubt that people that already own tens or hundreds of thousands of LSK seriously need/deserve to get additional amounts. They’ll be handsomely rewarded for just owning this coins in the first place.
I believe fees should always be in the interest of the network and not so much for the individuals. The fees should cover the costs of maintaining the infrastructure with a mild bonus for faith/time of the individuals.
I would ask of the developers and the community to rethink the AD approach and adjust the system so it’s in the best interest of the currency. Everyone who started early will by now have a big chunk of LSK and will profit nicely from the current rises and can expect another factor 10–100 in the foreseeable future.
As for the currency’s future and reputation itself i would hope for the following:
- severely reduce the forging rewards. They should finance/maintain the network.
- rewards should not provide a fixed amount per block.
- reduce all fees greatly.
- increase the number of active delegates.
- Find a different way to determine/payout sponsorship of important individuals/institutions.
Have a look at XEM:
- After the prices rose, they have reduced all fees by ~99%. The community wholeheartedly agreed on that to benefit the currency! There’s no “battle” for votes.
- They also “forge” rewards, but they equally share a fixed amount of XEM/day to all nodes that met quality standards (which are tough) ultimately rewarding people/institutions who contribute to the stability of the network. The amount distributed is reasonable as there are currently ~950 supernodes at work sharing i think 150.000 XEM/day (roughly 150XEM per eligible supernode per day, 4500XEM/month at 0.27USD/XEM coming to around 1200USD/month. That’s easily enough to host a decent server or two and gain a little bonus.
Right now for LSK there seems to be a forged block slot for every of the 101 active delegates every 25 minutes or so. Currently rewarded with 5 LSK. That’s 0.2 LSK/minute or 288 LSK/day or 8640 LSK/month. At current market price of 7.20 USD that totals to: 62,000 USD/month. Is that reasonable? Is that really in ecosystems and communities best interest?
Even worse: If the amount of transactions double — which they will — the forging rewards will double. If the coins value doubles — which it will (again and again) — so will the rewards. Reducing these rewards to 4/3/2/1 over the next years seems ridiculous in comparison.
Now that wouldn’t be much of the problem if there wasn’t this limit of 101 delegates, or if the rewards weren’t based on the amount of blocks. Or if the fees (including voting/delegating) would be much much lower. Or better yet none of these. Then there would be a chance for the system to even itself out over time. Just like other systems do.
My 2 cents in the morning.