Block Reward And Fee Split

Discussion in 'Governance' started by Kandiru, Apr 1, 2016.

  1. 2017/12/15 - Decred v1.1.2 released! → Release Notes  → Downloads
  1. Myagui

    Myagui Jr. Member
    Pool Operator (PoS)

    Jan 5, 2016
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    I feel strongly against having PoS voters earning a portion of the transaction fees for each block. The reason is quite simple; it is that it introduces an economical incentive for voters to take a certain voting direction. As it works out today, voters have no economical incentive to vote 0 or 1. The only incentive is to express some vote.

    On the other hand, I completely agree with the understanding that eventually, block rewards will be too low to justify/incentivize voting (as rewards might approach, or even be ?lower? than the ticket purchase fee). This is definitely an issue.

    My preferred solution would be something of a tail emission such as some other currencies have defined. This addresses the long term incentive to vote, but also long term incentive to mine (which I feel is inadequately expressed if miners are only earning transaction fees).
    Perhaps some future voting round could be presented with a few options to decide on this matter? With Decred, we have the ideal platform to deal with these issues ;)
     
  2. Kandiru

    Kandiru Member

    Feb 21, 2016
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    I don't follow your logic. You vote on the previous block's transactions. You would gain fee from the current block, which you are unlikely to vote on. How does getting a share of the fees affect your vote on the previous block?
     
  3. Myagui

    Myagui Jr. Member
    Pool Operator (PoS)

    Jan 5, 2016
    46
    45
    Male
    Oh ... I don't think I had wrapped around my head yet on the sequencing of the vote issue and fee distribution (vote concerns block X-1, fees are earned from block X). If a voting direction does not have a direct impact on that voter's earnings from fees, it does make a lot more sense, though I'm not quite confident that this does not introduce some evil thinking/voting opportunities.

    All things considered, I continue to prefer a tail emission (for how it addresses long term incentives for both PoW & PoS), but perhaps that's not a popular approach here, I really don't know. In effect, a tail emission might perhaps be an independent matter of discussion, since fee splitting has its own merits and reasoning, regardless of the former.
     
  4. Kandiru

    Kandiru Member

    Feb 21, 2016
    207
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    Yeah, I would also be in favour of tail emission system. We will be losing a lot of DCR for blocks with only 3/4 votes. If you add in dead airdrop acounts, we'll end up short of the 21million DCR. Having the minimum stake vote reward be say, 0.1 DCR we would only be inflating the DCR by 0.5 DCR / block or 6000 DCR / year. The main people who lose out to inflation are people who hold DCR, and those are the people who would get the stake rewards, so it would cancel out.

    As long as there is a long-term incentive to PoS to secure the network, I don't really mind if it takes the form of transaction fee sharing or a fixed lower reward, or the elimination of the minimum 0.01 DCR / KB fee for PoS ticket purchases.

    That makes me think of another issue actually, when the block reward is negligable, will PoW miners be penalised a share of the transaction fees for only including 3 or 4 votes? If so, then there will be perpetual leak of DCR to lost fees, and if not, then there is no disincentive for miners to manipulate votes by omission.
     
  5. sambiohazard

    sambiohazard Sr. Member

    Jan 21, 2016
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    If and when we reach a stage where PoS/PoW rewards in DCR are small enough, price wouldn't be $2 and technology might have moved forward so much that i am sure PoS will only depend on if you have decred in your wallet or not, i.e. there won't be a cost to do it. It will purely depend on whether you want to be involved in voting & deciding things. Internet & devices needed for PoS are quite cheap even now and it will be even more so in future IMO. PoW rewards and incentive to mine would be what i will worry about as its not as trivial as PoS, which also has support of stakepools. PoW requires certain infrastructure and regular expenditure to keep going and so we need incentives for people to keep doing that. For the starting phase of say 5 years, price should do the trick if development keeps chugging along. Beyond that we will see how the scene changes.
     
  6. develCuy

    develCuy New Member

    Jan 4, 2016
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    This problem requires more math and hardwork, solution is not easy and we don't have much time left (if we are thinking long term). With no incentive people will keep selling DCR. Also, exchange price of DCR has nothing to do with this. It is all about fees and rewards, how to ensure reward pays the PoS fee + Maintenance costs and lets a profit margin. PoW is out of discussion here because even BTC is sometimes unprofitable for miners, yet big players keep mining it because they managed to get cheap electricity, cheap infrastructure and low maintenance costs, that is their business so they will figure it out. PoS is instead a business for everyone, it democratizes mining by lowering entry barrier, this is the reason why many people bid for DCR including me.

    If we are thinking long term let's include PoS pools in this discussion, they will become the big players anytime soon, that will lower maintenance costs and will easy PoS mining even more. Cloud hosting gets cheaper and cheaper so we can let PoS pools figure out how to stay competitive.

    The thing is should we care about low capital solo-miners? PoS pools will always have more capital so ticket price will keep increasing, that means less people with chance to buy tickets, and less number of tickets out there. Guess you get the rest of this. Let's talk in these terms five years in the future, current times are yet boring ;)
     
  7. rustynail

    rustynail New Member

    Jan 31, 2016
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    How about a flag that would be required in case the fee was higher than the set limit? Users should be allowed to do anything they want.
     
  8. Myagui

    Myagui Jr. Member
    Pool Operator (PoS)

    Jan 5, 2016
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    This is already built into the last release or two @rustynail ;)
     

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