TIP-35 Limiting the number of paid block producers with votes threshold
A proposal to motivate Block Producers to actively engage with the Telos community
Call To Action:
We would like to request Telos token holders to vote for TIP-35 proposal here: https://app.telos.net/trails/ballots/tip35.voting/1596650292303
- Open the link above.
- Sign-in using the wallet of your choice.
- Vote for the proposal.
Abstract
This proposal is aimed to create a competitive environment for existing and new Telos Block Producers. It aims to encourage more proactive participation by new Block Producers joining the Telos ecosystem. In Telos Blockchain, we can have 51 BPs (21 Active BPs + 30 Standby BPs), and every month these BPs get TLOS tokens for producing the blocks. Since the launch of Telos Mainnet, we have seen a decrease in active participation from the newly joining BPs, and the total number of BPs competing for the 51 positions is almost the same as the availability of positions. The current model is not encouraging new BPs to be more proactive. The proposal is to create a competitive environment by adding a minimum votes threshold requirement for a Block Producer to be eligible for rewards. The minimum votes threshold has to be modular and managed by the active BPs with a multi-sig action. This new addition can create more proactive participation from existing and new BPs due to its competitive nature and potentially encourage BPs to HODL their tokens.
Motivation
We are in a critical phase currently which defines the future of Telos Blockchain Network. In recent months, we have seen an increase in the flow of dApps joining Telos Blockchain Network and also increased participation from the community in regards to governance and token price. The proactive discussions and participation from community members encouraged the members to propose TEDP 2.0 which is focused on the long-term sustainability of Telos. As we are all working towards the long-term sustainability of Telos, we have to make some important changes to the way things work and encourage proactive participation from all the stakeholders in the Telos Blockchain ecosystem.
The motivation for this proposal is to encourage active participation from BPs and to create a competitive environment where all the value creators are incentivized fairly.
Rationale
We have minimum BP requirements in Telos today and we are at a critical phase that will determine the long-term success. There are two important rationales behind this proposal as listed below:
- Encouraging new BPs to be more proactive
- Creating a competitive environment among existing BPs
- Effect on Token Price: Since the success of the TEDP 1.0 proposal, there is an increase in the effective tokens paid to ABPs and SBPs, the rationale at that time was the low token price but this has actually affected the token price in a negative way. Also, we are seeing an increased number of instances where new BP registers and starts collecting rewards to make a quick buck without actually contributing to the growth of the Telos ecosystem.
Specifications
Proposal-1: To have a minimum votes threshold for a BP to get paid, the threshold should be adjusted by the active BPs in accordance with the total staked TLOS.
The preliminary proposal for the threshold is to set at 25% of staked TLOS. This could be discussed and adjusted by the active BPs. This proposal will have an impact on the standby BPs who have votes less than the set threshold.
Upon the implementation of the threshold requirement, the bp pool fund will only draw funds needed to pay the bps who satisfy the requirements. This means that bps will not get any additional pay though there are less than 51BPs who satisfy the requirements.
Actions to be taken
- Identifying the votes threshold logic based on the staked TLOS. It should be configurable. Preliminary suggestion 25% of staked TLOS.
- Updating article-10 of TBNOA to reflect the new changes.
