Announcing the Moonbeam Collator Delegation Fund

CertHum
CertHum
Published in
8 min readJun 17, 2022

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Moonbeam Collator Delegation Fund Founding Members

Today, CertHum in collaboration with the 9 other Moonbeam collators shown in the above image, is happy to announce the launch of the Moonbeam Collator Delegation Fund for the Moonbeam chain.

What is the Collator Delegation Fund (CDF)?

The Moonbeam CDF (which is not affiliated with the Moonbeam Foundation) is a strategic GLMR reserve funded by CDF member collators. The reserve will be used for staking to CDF member collators if and when they are at risk of falling from the active set to the collator waiting list.

It was created by a group of like-minded, independent operators running collators on the Moonbeam network.

Each CDF member has committed a substantial amount of GLMR from their own private reserves and has put that GLMR aside in CDF designated wallets.

The new pool of CDF GLMR will be delegated to CDF member collators if a member of the group is at a significant risk in any given round. The reserve will provide CDF members with an extra layer of defense against relegation to the collator waiting set and will also give our delegators additional assurance of our determination to stay active and generate rewards for them.

Why a CDF?

The Moonbeam active collator set which at the time of writing is limited to 64 collators, includes operators with access to varying degrees of resources — from large enterprises operating with billion-dollar budgets to small companies that operate with a fraction of that kind of budget.

It is a highly competitive set, and you’ll find organizations such as Binance, and Blockdaemon that have secured their place with seemingly little effort, as well as individually funded, anonymous whale operators with few community delegations, constantly topping up their self-stake to make sure they don’t fall to the waiting list.

The active set also includes small, self-funded startups like CertHum and other similarly sized community collators. Some of us go back to early 2021, running collators during or close to the time of the Moonbase Alpha launch. Community collators primarily rely on community (from small to whale-sized) delegations to stay active.

Since the Moonbeam chain launched at the end of last year, and building off what was learned with the Moonriver chain launch, a few things about the active set have become apparent:

- As Moonbeam continues to deliver on its promises and the acclaim of the Moonbeam network grows, the active collator set will become increasingly competitive with more collator operators from large organizations and private individuals buying their way into the active set.

- Independent, single-node collators typically don’t have the GLMR resources to outcompete these new collator entrants. This is evidenced by the fact that these new better funded entrants have mostly evicted small, community collators that have limited resources.

- At the current rate of replacement of collators in the active set, after 1–1.5 years it appears that there will be no room in the active collator set for smaller start-up community collators outside of the Orbiters program.

Based on the observations, many of the community collators are likely running on borrowed time in the active set. However, smaller community collators may be able to prevent or at least delay this outcome by working together. By collaborating instead of actively competing with each other, we give ourselves a better chance of success.

By relying on community delegations that favor more engaged community collators, combined with independent community collators supporting each other, we may be able to change what seems inevitable.

The CDF aims to do just that.

We are also aware that many of our delegators, from small retail participants to larger whale backers, would like to support the common good and diversify their stake against community collators, but would prefer not to actively manage their delegations — they prefer to set it and forget it.

By creating the CDF we hope to provide greater stability (in terms of remaining active) for CDF collators and delegators, making us more attractive to stake with. If this proves true, it will create a positive feedback effect, further ensuring success for everyone involved.

Wait, does the CDF have a problem with highly financed organizations and individuals taking spots from community collators?

No, not really.

First, it’s an open network, so anyone can throw a collator in if they have the backing.

Our hope is that delegators will see value in community collators and what we bring to the network. It’s also understood that community collators aren’t the only ones that bring value.

Companies like Binance bring liquidity and user interest to the network in the form of new participants, some VC operated nodes provided the seed and strategic capital that helped initially fund the work to create this great network, and I’m sure there are some ‘anonymous’ collators that do more than we realize.

But we believe a diverse set brings the most value to the network, and that should also include smaller community collators. Smaller collators bring innovative ideas, we can move quickly, we look to solve problems without bureaucracy, and most of us truly enjoy interacting with delegators and the wider community. A co-existence seems like the optimal solution, and by working together, the CDF aims to ensure that.

What about the Orbiters program? Why don’t you just move to that?

The Orbiters program is a great innovation created by the Moonbeam Foundation to provide smaller operators and community members with an opportunity to participate in collating and get involved with all the great aspects and responsibilities that come with node operating. We believe this will lead to wider community participation, and we are aware that some of the community collators that have been knocked out of the active set are lining up to participate in the Orbiters program.

For those of us community collators that are still in the active set, this is also seen as somewhere we can land and keep bringing our expertise in collator operations if we are knocked out of the active set and accepted into the program.

However, this isn’t a target for any of us. Each community collator has delegator communities that we have worked with and come to know fondly over the past year. To say to them “we quit, unstake now, lose your rewards during the unstaking period, we know you put in your time in becoming a part of our collator community, but it won’t work out”, simply isn’t an option. It may end that way, but we won’t encourage that outcome.

More importantly, many of us community collators have heard those that are delegating to our nodes say that they understand the value of what we bring to the community and wouldn’t permit us to roll over.

They demand we fight because they see it as important to the network and its future growth that we remain active, and we are committed to them.

So, is this your Cloak of Invincibility +10? Is it safe to delegate with you and not worry about any CDF collators dropping out?

Sadly, no.

If you see from the list of public group members, one of them isn’t even in the active set. While we were funding our wallets during the formation of the CDF, one member, Polkadotters, had a 600k GLMR revoke. Even with our combined resources, we can’t always protect from that large of a whale revocation, and the CDF was unable to save them. The CDF is a layer of defense, but if you like what the CDF is about, it’s critical that CDF members receive community delegations.

We are working together to help ourselves and ensure that you receive consistent rewards and a lower risk of us leaving the active set, but we can’t be successful without the help from community delegations.

There’s also the chance that a whale could use a last second delegation to pump one or more collators high enough to overtake one of the member collators, but the way we deploy the reserve attempts to prevent that from occurring.

Our hope is that delegators like the idea of community collators working together, and that leads to greater support from the community.

Based on what you said about not being able to prevent a 600k GLMR revoke, you really aren’t safe, huh?

There are limits to everything.

This includes how many GLMR an individual community collator working alone can commit for staking to their own collator, and how many GLMR the CDF has available to pump a member collator. It also includes how many GLMR (non-community collator) holders will want to buy for the use of pumping their anonymous collator.

In other words, everyone, community collator or not, has their limits.

Our limits are just a little more transparent. This also leaves us a bit more exposed, but we have circuit breakers and rules in place so that one CDF member can’t exhaust the whole fund due to a directed attack. It’s not ideal, but it’s still better than working alone, competing against each other. Additionally, each CDF member has their own reserve of GLMR, and it’s expected that participating CDF members deploy those reserves to supplement the CDF delegations.

Looking at the whole, we believe we are safer working together than we would be by working alone.

So you are forming a cartel? Are you going to muscle out other collators?

Nope. The CDF is used for defensive purposes only, for delegations to CDF members at risk, and each member still maintains their own operations, strategic direction, and focus. To be clear, the CDF GLMR is not used to gain more collator spots or for any other purpose which is not described in this blog.

In fact, CDF members are foregoing tens of thousands of GLMR in staking rewards per year (in sum across all members) by keeping these GLMR unstaked for most of the time.

By aligning resources in this one area, we will be able to compete with larger organizations that have a competitive advantage when it comes to GLMR reserves. It may end up that CDF members collaborate on other projects, but everything we do will keep transparency and good will at the top of mind.

This sounds great, I run a collator, can I join?

Absolutely.

There are some requirements, such as committing to only run one node. There are also guidelines you’ll need to informally agree to follow such as setting aside the required GLMR (and being okay with earning no staking rewards on them for the most part), but we want to be inclusive, not exclusive, and the group votes on everything. Drop a DM to any of the public members and we can give you the full breakdown of the group and how to become a part of the CDF.

I would like to help. What can I do?

The biggest thing that anyone can do to help the CDF is to delegate to CDF members.

The CDF is meant to provide support in times of higher risk, but it is not and cannot be a replacement for delegations. In fact, the best thing that could happen to the CDF is that we never need to activate the fund, and we disband, but that can only happen with your delegations.

If you are already delegating with us, spreading the word about the CDF will help us attract more delegations, and help to create the positive feedback effect previously discussed in this article.

Is that it?

CDF members love being a part of the Moonbeam Network, and we know that you do, too. If you are already delegating with us, thank you! If you are considering it, but still have questions, please reach out to any member collators and we will be happy to chat with you.

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