From cc1484885c633465f9549551c8510ff412dc524e Mon Sep 17 00:00:00 2001 From: shawnim Date: Sun, 8 Aug 2021 20:53:09 -0700 Subject: [PATCH 1/3] Prepay Fixed Fee --- CIP-PrepayFixedFee/CIP-PrepayFixedFee.md | 50 ++++++++++++++++++++++++ 1 file changed, 50 insertions(+) create mode 100644 CIP-PrepayFixedFee/CIP-PrepayFixedFee.md diff --git a/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md b/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md new file mode 100644 index 0000000000..a7772605b5 --- /dev/null +++ b/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md @@ -0,0 +1,50 @@ +--- +CIP: ? +Title: Prepay Fixed Fee +Authors: Odin Stark , Shawn McMurdo +Comments-URI: https://forum.cardano.org/t/prepay-fixed-fee-cip/????? +Status: Draft +Type: Standards +Created: 2021-08-08 +License: CC-BY-4.0 +--- + +## Simple Summary + +Create a more fair marketplace for stakepools by paying the minimum fixed pool fee to qualifying pools before calculating pool and delegator rewards. + +## Abstract + +The current minimum fixed pool fee places a large and unfair burden on delegators to pools with smaller amounts of stake. +This incentivizes people to delegate to pools with higher stake causing centralization and creating an unequal playing field for stakepool operators. +Paying the minimum fixed pool fee before calculating pool and delegator rewards eliminates the imbalance between stakepools with less or more stake allowing for fair competition between stakepools and more fair rewards for delegators to stakepools with less stake. + +## Motivation + +Paying the minimum fixed pool fee before calculating pool and delegator rewards creates a more fair marketplace for all stakepool operators, gives delegators to pools with less stake more fair rewards, and increases decentralization, which is a goal of Cardano. + +## Specification + +TODO Need to look at specs and see what relevant changes need to be made. + +## Rationale + +TODO Need to add detailed explanation. +In summary, the proposed parameter changes would create a more fair marketplace for stakepools, provide more fair rewards for delegators to smaller pools and would reduce incentives for centralization providing a more resilient network. + +## Backward Compatibility + +TODO Need a statement about compatability. + +## Test Cases + +TODO Need a statement about test cases. + +## Implementations + +This would require changes in the way cardano-node calculates pool and delegator rewards. + +## Copyright + +This CIP is licensed under [CC-BY-4.0](https://creativecommons.org/licenses/by/4.0/legalcode) + From 5c5e430dba79288017b87bde6018ed6f83f058c3 Mon Sep 17 00:00:00 2001 From: shawnim Date: Tue, 11 Jan 2022 00:14:24 -0800 Subject: [PATCH 2/3] Prepay Min Fixed Fee --- CIP-PrepayFixedFee/CIP-PrepayFixedFee.md | 50 ----------- CIP-PrepayMinFixedFee/README.md | 102 +++++++++++++++++++++++ 2 files changed, 102 insertions(+), 50 deletions(-) delete mode 100644 CIP-PrepayFixedFee/CIP-PrepayFixedFee.md create mode 100644 CIP-PrepayMinFixedFee/README.md diff --git a/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md b/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md deleted file mode 100644 index a7772605b5..0000000000 --- a/CIP-PrepayFixedFee/CIP-PrepayFixedFee.md +++ /dev/null @@ -1,50 +0,0 @@ ---- -CIP: ? -Title: Prepay Fixed Fee -Authors: Odin Stark , Shawn McMurdo -Comments-URI: https://forum.cardano.org/t/prepay-fixed-fee-cip/????? -Status: Draft -Type: Standards -Created: 2021-08-08 -License: CC-BY-4.0 ---- - -## Simple Summary - -Create a more fair marketplace for stakepools by paying the minimum fixed pool fee to qualifying pools before calculating pool and delegator rewards. - -## Abstract - -The current minimum fixed pool fee places a large and unfair burden on delegators to pools with smaller amounts of stake. -This incentivizes people to delegate to pools with higher stake causing centralization and creating an unequal playing field for stakepool operators. -Paying the minimum fixed pool fee before calculating pool and delegator rewards eliminates the imbalance between stakepools with less or more stake allowing for fair competition between stakepools and more fair rewards for delegators to stakepools with less stake. - -## Motivation - -Paying the minimum fixed pool fee before calculating pool and delegator rewards creates a more fair marketplace for all stakepool operators, gives delegators to pools with less stake more fair rewards, and increases decentralization, which is a goal of Cardano. - -## Specification - -TODO Need to look at specs and see what relevant changes need to be made. - -## Rationale - -TODO Need to add detailed explanation. -In summary, the proposed parameter changes would create a more fair marketplace for stakepools, provide more fair rewards for delegators to smaller pools and would reduce incentives for centralization providing a more resilient network. - -## Backward Compatibility - -TODO Need a statement about compatability. - -## Test Cases - -TODO Need a statement about test cases. - -## Implementations - -This would require changes in the way cardano-node calculates pool and delegator rewards. - -## Copyright - -This CIP is licensed under [CC-BY-4.0](https://creativecommons.org/licenses/by/4.0/legalcode) - diff --git a/CIP-PrepayMinFixedFee/README.md b/CIP-PrepayMinFixedFee/README.md new file mode 100644 index 0000000000..22f0a15257 --- /dev/null +++ b/CIP-PrepayMinFixedFee/README.md @@ -0,0 +1,102 @@ +--- +CIP: ? +Title: Prepay Min Fixed Fee +Authors: Odin Stark , Shawn McMurdo +Comments-URI: https://forum.cardano.org/t/prepay-min-fixed-fee-cip/81605 +Status: Draft +Type: Standards +Created: 2021-08-08 +License: CC-BY-4.0 +--- + +## Simple Summary + +Create a more fair marketplace for stakepools by paying the minimum fixed pool fee to qualifying pools before calculating pool and delegator rewards. + +## Abstract + +The current minimum fixed pool fee places a large and unfair burden on delegators to pools with smaller amounts of stake. +This incentivizes people to delegate to pools with higher stake causing centralization and creating an unequal playing field for stakepool operators. +Paying the minimum fixed pool fee before calculating pool and delegator rewards eliminates the imbalance between stakepools with less or more stake allowing for fair competition between stakepools and more fair rewards for delegators to stakepools with less stake. + +## Motivation + +Paying the minimum fixed pool fee before calculating pool and delegator rewards creates a more fair marketplace for all stakepool operators, gives delegators to pools with less stake more fair rewards, and increases decentralization, which is a goal of Cardano. + +## Specification + +The minimum fixed pool fee, minPoolCost, will be paid to each pool making at least one block in the epoch out of the total rewards for the epoch before the normal payment of rewards to pools and delegators. +Only the minimum fixed fee is prepaid. Any difference between the minPoolCost and the pool's declared fixed fee would still be paid out of the pool rewards as is done now. +This proposal does not change the process for payment of the pool variable fee. +This proposal does not change the amount of ADA coming from the reserve or going to the treasury. +It adjusts the payment of rewards to pools and delegators only. + +We introduce a cap on the prepaid fees of 2 * minPoolCost * stakePoolTargetNum (aka k or nOpt). +We will call this the prepaidFeeCap. +If there are more than 2 * stakePoolTargetNum block producing pools in an epoch then the prepaidFeeCap is divided equally among all pools making blocks. In this case, each pool will receive somewhat less than the minimum fixed fee as the prepaid part of the pool rewards. The difference between the prepaid amount and the pool’s declared fixed fee would be paid out of the pool rewards as is done currently. + + +## Rationale + +To clarify the rationale and better understand the impact that this change would have, we present the following examples. + +Given: +* 4 pools (A, B, C, and D) having total stake of 1m, 5m, 10m, and 50m ADA respectively. +* Each pool has a pledge of 100k ADA, fixed fee of 340 ADA and variable fee of 1%. +* Each pool has an example delegator who stakes 100k ADA. +* In an epoch, the pools have equal luck and perform equally well, making blocks proportional to their stake (A = 1, B = 5, C = 10, and D = 50). +* The total rewards available after treasury contribution is 21m ADA. +* The total number of blocks minted is 21k. + +This gives us: +* 21m ADA / 21k blocks = 1000 ADA per block (current) +* (21m ADA - (1000 pools * 340 ADA)) / 21k blocks = 983.8 ADA per block (proposed) +* Current Pool A rewards after fees = 1000 - 340 - (660 * 0.01) = 653.4 ADA +* Proposed Pool A rewards after fees = 983.8 - (983.8 * 0.01) = 974.0 ADA +* Current Pool B rewards after fees = 5000 - 340 - (4660 * 0.01) = 4613.4 ADA +* Proposed Pool B rewards after fees = 4919 - (4919 * 0.01) = 4869.8 ADA +* Current Pool C rewards after fees = 10000 - 340 - (9660 * 0.01) = 9563.4 ADA +* Proposed Pool C rewards after fees = 9838 - (9838 * 0.01) = 9739.6 ADA +* Current Pool D rewards after fees = 50000 - 340 - (49660 * 0.01) = 49163.4 ADA +* Proposed Pool D rewards after fees = 49190 - (49190 * 0.01) = 48698.1 ADA + +The chart below shows the amount of fees earned by the SPO, the amount of rewards earned by the delegator and the effective fee percent paid by the delegator for each of the 4 pools in the current and proposed models. + +Who Current Proposed +--- ------- -------- +SPO A 346.6 ADA 349.8 ADA +Del A 65.3 ADA 97.4 ADA +Fee A 34.7% 2.6% + +SPO B 386.6 ADA 389.2 ADA +Del B 92.3 ADA 97.4 ADA +Fee B 7.7% 2.6% + +SPO C 436.6 ADA 438.4 ADA +Del C 95.6 ADA 97.4 ADA +Fee C 4.4% 2.6% + +SPO D 836.6 ADA 831.9 ADA +Del D 98.3 ADA 97.4 ADA +Fee D 1.7% 2.6% + +As you can see from this example, a delegator delegating to a pool with 50m ADA total stake receives over 50% more rewards (98.3 / 65.3) than if they delegated to a pool with 1m total stake, even though the pools are performing equally well. +This is a flaw in the current design that causes centralization to popular pools rather than better performing pools. +The proposal creates a much more fair marketplace for stakepools, removes the unfair fee burden placed on delegators to small pools and incentivizes a more performant network while maintaining similar payouts to stakepool operators as they currently receive. + +## Backward Compatibility + +No backwards compatability is needed. + +## Test Cases + +Any existing test cases that compare real and expected reward amounts would need to be updated. + +## Implementations + +This would require changes in the way cardano-node calculates pool and delegator rewards. + +## Copyright + +This CIP is licensed under [CC-BY-4.0](https://creativecommons.org/licenses/by/4.0/legalcode) + From b52d0f5a28f8ea978ade26744109169276bcce6c Mon Sep 17 00:00:00 2001 From: shawnim Date: Tue, 11 Jan 2022 10:12:26 -0800 Subject: [PATCH 3/3] better table display --- CIP-PrepayMinFixedFee/README.md | 38 ++++++++++++++++----------------- 1 file changed, 19 insertions(+), 19 deletions(-) diff --git a/CIP-PrepayMinFixedFee/README.md b/CIP-PrepayMinFixedFee/README.md index 22f0a15257..4b9c86ee55 100644 --- a/CIP-PrepayMinFixedFee/README.md +++ b/CIP-PrepayMinFixedFee/README.md @@ -60,25 +60,25 @@ This gives us: * Current Pool D rewards after fees = 50000 - 340 - (49660 * 0.01) = 49163.4 ADA * Proposed Pool D rewards after fees = 49190 - (49190 * 0.01) = 48698.1 ADA -The chart below shows the amount of fees earned by the SPO, the amount of rewards earned by the delegator and the effective fee percent paid by the delegator for each of the 4 pools in the current and proposed models. - -Who Current Proposed ---- ------- -------- -SPO A 346.6 ADA 349.8 ADA -Del A 65.3 ADA 97.4 ADA -Fee A 34.7% 2.6% - -SPO B 386.6 ADA 389.2 ADA -Del B 92.3 ADA 97.4 ADA -Fee B 7.7% 2.6% - -SPO C 436.6 ADA 438.4 ADA -Del C 95.6 ADA 97.4 ADA -Fee C 4.4% 2.6% - -SPO D 836.6 ADA 831.9 ADA -Del D 98.3 ADA 97.4 ADA -Fee D 1.7% 2.6% +The table below shows the amount of fees earned by the SPO, the amount of rewards earned by the delegator and the effective fee percent paid by the delegator for each of the 4 pools in the current and proposed models. + +| Who | Current | Proposed | +|-------|-----------|-----------| +| SPO A | 346.6 ADA | 349.8 ADA | +| Del A | 65.3 ADA | 97.4 ADA | +| Fee A | 34.7% | 2.6% | +| | | | +| SPO B | 386.6 ADA | 389.2 ADA | +| Del B | 92.3 ADA | 97.4 ADA | +| Fee B | 7.7% | 2.6% | +| | | | +| SPO C | 436.6 ADA | 438.4 ADA | +| Del C | 95.6 ADA | 97.4 ADA | +| Fee C | 4.4% | 2.6% | +| | | | +| SPO D | 836.6 ADA | 831.9 ADA | +| Del D | 98.3 ADA | 97.4 ADA | +| Fee D | 1.7% | 2.6% | As you can see from this example, a delegator delegating to a pool with 50m ADA total stake receives over 50% more rewards (98.3 / 65.3) than if they delegated to a pool with 1m total stake, even though the pools are performing equally well. This is a flaw in the current design that causes centralization to popular pools rather than better performing pools.