DFIP: Collective Staking

[ThanatosOsomiak]

Collective Staking

Overview

At the moment one DeFiChain masternode is worth approx. $ 70,000. For lots of people, willing to stake, it’s not possible to gather such a huge amount. Therefore they use centralized third party organizations to gain rewards from their DFI. This leads to a huge centralization of the DeFiChain network. At the moment approx. 99% of all masternodes are under control of such centralized third parties. Due to this, not only the chain is centralized, also the individual DFI owner doesn't hold the keys.

Proposal

tl;dr: Masternodes based on locked DFI in a smart contract from different wallets. To enable parties holding way less than 20000 DFI to participate in the decentralization.

To prevent the network from spamming with reward transactions a masternode can be co-funded by a maximum number of wallets. 5 seem to be appropriate.

Funding

The masternode funding can take place privately (under known parties) or publicly (anonymously). During the masternode creation process the owner defines a public or private funding.

PRIVATE

• For a private funding the owner either funds the whole node by himself or he/she shares some secret information with known parties. Only DFI owners knowing the secret information are able to co-fund a masternode.

PUBLIC

• Public funding is published by the blockchain / blockchain explorer. During the creation process the masternode automatically publishes the information to the mempool. Interested co-funders can see open masternode contracts at the blockchain/GUI explorer and participate by locking their DFI to a smart contract. Using a smart contract also allows implementing within a graphical user interface, such as the existing Defi Wallet app, which enables users to collaborate without any deeper technical knowledge.

Each participant must contribute at least 50% of the remaining minimal locked DFI to gain the masternode status, except the last participant must spend the remaining amount of DFI.

This gives everybody the chance to lock large and small amounts of DFI.

Examples

Example	1st/min	2nd	3rd	4th	5th
A	10000	5000	2500	1250	1250
B	10000	8000	1500	485	15
C	10000	10000	-	-	-
D	20000	-	-	-	-

Operational Costs

The masternode owner can define a specific percentage to collect from the co-funders to maintain and run the masternode. These costs can be set between 0 and 5%.

Unlocking Funds

Unlocking the funds by one of the funders leads to the decommissioning of the masternode. To guarantee network stability view DFIP12 (#26) . After Unlocking DFI it takes 14 days to decommission the masternode and unlock the funds. So the masternode owner has enough time to find a new co-funder and the Co-Founders do not unsakte due to any panic reaction. This process could be improved by buying out the old funder with the new one. A suitable graphical user interface provided by the Defi Wallet app or any third party will help a lot with that, too.

Voting

Voting will be possible through the smart contract. The masternodes voice will vote in the same way as the majority of the co-funder votes. Each co-funder has the voting power in relation to his share of the masternode funding. Co-funder not voting do count as not relevant and will increase the voting power of the existing votes.

This will also increase the network decentralization, due to the fact that more masternodes will provide their votes.

In most cases the Masternode owner will own >50% so he has the power to vote. Only if he owns 50% and/or he is not taking part in the voting the masternodes voting relies on the co-founders.

Interim solution:

As long as there is no change in the voting system and the voting takes place by signed GitHub comments, the MN Owner has the power to vote.

[Alibaas]

I believe that the current system is fully adequate.

[dell1503]

Great idea!

[mmhpt]

great idea, that would help to get more non-cake MNs...

[AndiyNW]

I think with the latest discussion on lowering the collateral needed for MNs, this would be the perfect approach to bring in more MN owners with lower collateral requirements and help decentralise the project and distribute the MNs international and provide more independence from Cake! This would clearly provide a boost!

[uzyn]

Closing this in the mean time to prepare for the next round of DFIP. Please re-open if it should be part of the next DFIP.

[m1k1-ma]

@ThanatosOsomiak I think it would make sense to reopen/ajust that again accordingly. And to impelent the freezing option. Or at least think about it. 🚀

[DerFuchs]

Spontaneous idea: What about not demanding a higher collateral like described in #26 but using the target multiplier instead.

Example: When a collectively staked masternode runs on 20,000 DFI, the TM keeps raising by 1 every 6 hours. If the collateral drops down to, let's say, 15,000 DFI because someone rejected his/her collateral, the TM will be raised not after 6 hours but 7.5 instead. This will lead to a proportionally lowered minting activity. Additionally, the chain should be able to add up these missing 5,000 DFI as soon as someone wants to add a similar amount. This can be propagated through a kind of explorer which lists masternodes waiting for funding.

This will make #26 obsolete.