Long term staking should be implemented with "subnode" to unambiguously yield 1.5x (5y) & 2x (10y) returns

[uzyn]

What would you like to be added:

Related: #546, #562 & #619

Introduction of "subnode", where each of the following masternodes will mine at subnode level.

• Normal masternodes mines using 2 subnodes.
• 5-year lockup masternode mines using 3 subnodes.
• 10-year lockup masternode mines using 4 subnodes.

Each of the subnodes not only allows for multiple hashes, but also accumulates coinage independently. This unambiguously yields the desired effect of 10-year lockup masternode effectively running double the number of subnodes of 1 normal masternode – thereby generating 2x more returns.

Why is this needed:

See #619

Previous attempts at implementing coinage adjustment for long-term staking does not consistently yield the desired outcome of 1.5x more return for 5-year lockup and 2x more return for 10-year lockup when difficulty changes.

Subnode brings about the desired outcome unambiguously.

This has also been tested on Monte Carlo simulation:

$ node freeze-staking-montecarlo.js 
CYCLES 100000
NODES [ 1000, 1000, 1000 ]
TARGET 0.0012
COINAGE_EVERY [ 24, 24, 24 ]

Findings: [ 1206911, 1810558, 2413457 ]
Type 0: 1.207% success rate. (1.000x)
Type 1: 1.811% success rate. (1.500x)
Type 2: 2.413% success rate. (2.000x)

Simulation code: https://gist.github.com/uzyn/f9766cfd69ff6a586a0877b6cbae11c0

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@uzyn: Thanks for opening an issue, it is currently awaiting triage.

The triage/accepted label can be added by foundation members by writing /triage accepted in a comment.

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[uzyn]

/triage accepted

[Sebz84]

I think this way of distribution only works, if only a small percentage of masternodes locks their collateral for 5/10 years. The more masternodes lock their collateral long term, the lower the yield gets for them. If for example "worst case" 100% of all masternodes lock their collateral for 10 years, their yield will decrease back to 1x. I think a constant multiplier of 1.5x (5y) & 2x (10y) can not be achieved, because its depending on how many masternodes are locking their coins. Is this fact considered / accepted?

Please correct me if Im wrong :-)

[uzyn]

@Sebz84 The 1.5x and 2x is in relative to non-longterm staking. What you mentioned is a fact, if it's all 10-year node, then effectively it's 1x as everyone is 2x.

However, if there's 1 node that's non-longterm even in a pool of 1 million 10-year nodes, than that 1 node is expected to be getting half the reward of a 10-year node, regardless of the number of nodes overall.

This implementation adheres to that better.