Phala Network Will Activate the Budget Balancer Reward Distribution Module on Khala and Phala

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Phala Network

4 min readJun 3, 2023

Dear Phamily,

Gemini Tokenomics is about to enter its second halving cycle on the Khala network. At the same time, we are going to launch the Gemini Tokenomics on Phala, therefore a decentralized contract Budget Balancer will be activated to provide guarantees for the fair distribution of rewards on the Khala and Phala networks. The activation of this feature module has been approved by Phala&Khala Governance. For more details, please refer to the Phala motion and Khala motion.

Budget Balancer Operating Conditions and Methods

1. Halving Cycle

To ensure the smooth operation of Budget Balancer, the halving cycles of the two chains need to be consistent. Because the two chains share an economic model, different block speeds can easily lead to inconsistent halving cycles. This can result in uneven profits between different chains, which does not align with the shared economic model. Therefore, starting from June 12th, 2023 (the beginning of a new halving cycle), halving will occur every 180 days.

2. Budget Reward Strategy

Based on the same halving cycle, there is a preset initial total reward budget per unit time P (in minutes), and for the first halving period, we allocated a budget of 720K PHA per day:

720K / 24 / 60 * P = 500P

Based on the above, the total reward budget for Phala and Khala chains follows the following rules per unit of time P:

Phala total reward budget (per block) = Khala total reward share/ total reward share of both chains/ Phala real block number * 500P * real-time halving coefficient.
Khala total reward budget (per block) = Phala total reward share/ total reward share of both chains/ Khala real block number * 500P * real-time halving coefficient.
Phala total reward budget = Phala total reward budget(per block) * Phala unit time block number (Khala chain is the same).
Phala total reward budget: Phala total reward share = Khala total reward budget / Khala total reward share.

In other words, if two workers on the Phala and Khala chains have the same qualifications, they will receive the same reward amount within a given time period.

Note: The real-time halving coefficient = 0.75*(n — 1), where n is the halving cycle and the initial value is 1. n = 3+ roundup[(day(now) — the preset halving time of this cycle) / 180day]

3. Budget Balancer Constituent Modules

Budget Balancer will ensure the above logic is executed through the following three modules:

SubSquid Query Service: Regularly query information on the dual-chain network, store snapshots, generate databases, and output APIs for Budget Balancer contract calls;
Budget Balancer Contract: Deployed in Phat Contract. The main functions are as follows:

Logical calculation: Calculate the reward budget to be supplied for each cycle based on the on-chain information results;
Execute operation: Based on the results of logical calculation, determine whether transactions (reward distribution) have been successfully executed during a single cycle. If there are no relevant records, it will be responsible for completing the reward budget distribution.

3. On-chain Budget Strategy Adjustment Function and Whitelist: Specific accounts in the whitelist can send new strategies, generate new Budget Balancer contract addresses, or directly adjust the budget through a motion, thus realizing on-chain budget strategy updates. The replacement of whitelist accounts and permission configuration must be decided by on-chain governance motion.

FAQ

1. Are there any restrictions on adjusting the budget strategy?

Yes, in order to avoid over-disbursement of rewards due to extremely rare situations caused by excessively high budgets, the maximum reward budget for a single block on a single chain can be adjusted to twice the total standard budget of the dual-chain under normal circumstances.

At the same time, to avoid the problem of insufficient reward distribution within a single cycle due to slow block generation, the Budget Balancer will make up for the rewards not distributed in the old cycle in the new cycle after the block generation speed is restored. A maximum reward budget of twice the total standard budget is good enough to help re-issue the rewards after the block generation speed is restored.

2. How often is the reward budget updated?

The current setting is once a day, with updates based on the block speed of the previous day and the real-time network computing power distribution snapshot to calculate the reward budget for the day.

3. Is the Budget Balancer contract secure?

The contract is deployed on Phat Contract, which is naturally highly secure and can avoid human manipulation. At the same time, the strategy is completely open source and can be supervised by the public.

To learn more about the technical details of Budget Balancer, see here.

About Phala

Phala Network is a decentralized off-chain compute infrastructure like no other. Phat contract, an off-chain programming model running on Phala Network, enables developers to build Dapps with omnichain compatibility, internet connectivity, and verifiable computation. These benefits will make your smart contracts even smarter and can be simply integrated via no-code or low-code developer experiences.

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