Node runners can add both their wallet and their escrow account. So when they redeem galgo the Algo will be in their wallet and the same amount of Algo will be participating.
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But redemption has to occur on a future block, by the user posting a tx, so consensus will dip immediately. In extremis this generates an attack vector.
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so you as the âHead of Market Analytics and Researchâ at AF are ok with a proposal that literally is:
âshould we give 1M ALGOs to FF so they can give it out to gALGO minters on top of the defi boost? and not giving other dapps even a chance to participate in this due to the time constraints + potential technical/centralization issuesâ
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Just jumping in to beat this dead horse. Itâs a hard no from me for all three proposals.
-Measure 5: DeFi governance is already so heavily incentivized that we get people over leveraging on Folks. This wrecks borrow rates in the short term and makes people reliant on the AF to act like our mommies and save us from irrational over leveraging. The only reason to up the rewards is to pay for the DeFi consensus bonus, which I object to for reasons that many others have stated.
Measures 6 & 7: Like others, I am against these proposals. Consensus incentives should be paid for the act of participating in consensus, not because you participate through a particular platform. There is no reason I have seen to limit this to DeFi participants other than a weird fetish for driving Algos into DeFi to pump our TVL numbers. IMO, matters of decentralization/network security should not be dictated by things like TVL growth. This is especially true given that only one platform would seem to offer this.
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Itâs not like you said, please read carefully the Measure: itâs open to every project that meets the requirements. Even AMM could participate in this program with the liquidity in Algo present in the pool, for example. The requirements, in their first iteration, are the ability to efficiently monitor Consensus participation. p.s. Together with Adriana, I am currently also in charge of the Governance 
Thatâs the thing, the wording technically says itâs open to everyone but thatâs practically not the case.
DEXs have one account that holds all the assets of one liquidity pool. So if you put this account online (which is probably not possible as the current SCs wonât allow this) on which node does it go online? Does the dapp have to run a node per liquidity pool and we have to trust them? Doesnât sound really feasible to me
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So your proposal is that the truly immutable DeFi projects should just relaunch their entire contracts and fragment their liquidity between 2 versions of the smartcontract, to be able to themselves bring all those ALGOs online in a centralized manner without any input from their users, and all this to be done in just over a month before the new period launches? If you have a centralized project where you can just update the contracts at a whim itâd be possible to do what you say, but thatâs not the case for the supermajority of this chain. This means that the rewards will defacto only go to Folks Finance users. This is clearly a rushed measure that only rewards a single party, and that party has also been preparing this for probably months without notifying the community, which leaves the rest of the chain with no time to properly react.
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While I agree thatâs important for consensus that more Algo is staked online and incentives are a good way to funnel participation, I donât think that this measure cuts it. There should be a fair period of trial for more dApps to propose a PoC, test it and then proceed with the allocation, while in the meantime consensus incentivization should be done by boosting the normal governance, maybe adding a feature for consensus tracking where nodes that stop validating lose the boosted rewards. For Folks Finance I think that % of boost is a bit too much for the amount of time advantage they are given. Right now normal node runners are already put at a âlower levelâ vs defi governance stakers and with this the risk/reward would just make it too much attractive resulting in more stake moved to the FF escrow system. It should be at that point a MUST that node runners follow this practice:
as otherwise we can imagine that not only the additional runners stake would drop, but also the stake from previous node runners moved to FF would behave the same way and result in a security deficit.
To make this proposal acceptable the measure should lower the reward amount to DeFi and add a measure to boost traditional governance with consensus rewards for node runners.
Once the trial period is over and enough alternatives are provided to reach a decent amount of decentralization then more rewards can be added.
P.S. My opinion is that we should also take delegation into consideration since node running requires a certain attention to how the node operates and even with larger rewards the result obtained might not be the desired one. DeFi participation drove a good amount of participants into DeFi, but not as many new users from outside the chain, just like approaching a new chain higher rewards donât bring as much behavioral change as an easier approach. Iâd go as far to say that delegation might improve %stake online more than higher rewards. A restaurant gets more costumers if itâs built in high traffic zones instead of being hard to reach but gives out big discounts on meals.
I think we are seeing the same topic but from two different angles, so no one is right or wrong. The current online stake is dramatically low, if the urgency is to bring as much as possible online stake in the shortest time, this Measure can address it, with the possible side effect that some projects, which are not prepared for this integration, could temporarily lag behind: I am sorry for this but I truly believe that devoting rewards to incentivize consensus is currently one of the best possible uses.
Yet you have not commented at all on the fact that any amount of ALGO will then be online cyclicly and predictably, since Folks harvests all the ALGO out of the escrows when governance ends. This will lead to all the folks-enabled stake going to 0 at a time an adversary can predict. This is not good for the protocol, and not a single person has addressed this issue yet. This is especially dangerous if consensus participants move from regular consensus to folks consensus to harvest rewards, as we could then see the online stake dip below what it was before this incentive. Consensus is a delicate matter, and gamifying it without regard in a way thatâs extremely predictable like this begging for a disaster. I think we to act with more forethough, which you guys at the foundation is already doing by building a protocol native system for this.
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The proposal by @Gary2 is actually an interesting one that can address the issue: what do you think? p.s. We are here to discuss and find the best solution, not to defend apriori the first iteration, whose real added value is to have sparked a fruitful discussion like this about Consensus incentivization.
Because thatâs not how the folks protocol works. Itâs not Folks redeeming your gALGOs to those ALGOs automatically, no matter what you do they will still empty the escrows and you will still manually have to burn gALGOs. This will leave a time delta where any minted ALGO in folks escrows goes offline. Having 2 accounts participating doesnât fix this. Itâs an inherent issue with their model, with regard to participation.
If youâre still not convinced, imagine you mint 1000 gALGO, and participate with them. But you sold the gALGO. When the period ends, your stake will instantly go offline. Even if you kept the gALGO you still need to burn them, get new algos, and move those algos to an account that is participating. This will create the cyclical dependency that I have said since my first post in this thread (and a lot of others have brought up too).
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I see a huge risk that you guys want to put a proposal to a vote in what, 6 days now, that is clearly not thought through from a security perspective. We can NEVER afford to gamble when it comes to consensus, if a large stake of consensus is disappearing in a cyclical manner it could straight up kill the entire chain. This needs to be thoroughly discussed before this goes to a vote, yet no one has even attempted to give an informed opionion about why this wont be an issue (as I explained above Gary2 does not hold a solution).
I really canât fathom how you can not be more alarmed about the issue being raised.
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incentivization of consensus is the key problem to solve, so letâs not blend it in with the âprovide liquidityâ problem. Consensus stake can be incentivized through traditional governance.
DeFi/ FF node runners are already incentivized by the fact that they can earn double the rewards through gAlgo vs the trad gov node runners
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the one problem here is:
< if we add rewards to trad governance the rewards wonât be as attractive as DeFi rewards>
So if the intention is to drive users into consensus with rewards they wonât take the smaller rewards if they get more by just minting gAlgoâŚbut if the goal is to make the most people participate then delegation HAS to be taken into consideration, one click nodes donât address the physical problem, not everyone has a mini pc they can operate and know how to set up, also they probably wonât even understand how the whole process works and the security implications. Thinking that most of the stake is in the hands of users who understand this much about Algorand can be understandable now that the adopters are few, but long term if the stake has to spread to everyday users we canât expect them to know all this stuff or operate them without creating a security issue.
I understand that this decision is almost forced towards FF and it makes sense to go that way, but the way it was presented without allowing for more opportunities to compete with that is forcing the decision.
My suggestion is. Let Algorand Foundation allocate 1M algos for consensus incentivization for next quarter.
100k Algos will be given to public nodes where people can create their participation keys for free⌠In fair system⌠each node gets 1 point for each minute online. if node is not updated to latest version of algod, it will not get any point. if node is producing false blocks it gets blacklisted in current period. Payout period will be one hour, where all points are calculated and hour distribution is distributed to all nodes in proportion of their points.
900k Algos will be given to users who make their stake online. If node they selected is online they will get each minute 1 point for 1 algo they stake. Payout period will be one hour, where all points are calculated and hour distribution is distributed to all nodes in proportion of their points.
This system includes also the Folks escrow online accounts.
@trekianov, @JohnWoods, or @Adri ⌠i can create this system open source, in two working days for free if you are interested to use it
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What needs to happen so that we can put incentivization of any online account as measure 8 of GP8?
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overall itâs important to pass a measure to incentivize consensus, considering the important subject at hand I think that it wouldnât be too unwise to delay the voting for this one.
@trekianov Iâd suggest (and I think it would be greatly appreciated by the community) if this measure could be turned to a bounty system, have builders from the community come up with ad hoc solution. Then incentivize the ones that are delivering a solution. Folks would already have one ready. Other platforms and projects will be incentivized to deliver a new working product.
Also give more time to the community to come up with solutions to reward traditional runners outside of DeFi
Sure, i would like to see the hackathon for this oneâŚ
I was winner at these hacks:
GovId Hack, EUVsVirus, Encode Algorand Hackathon, Swiss blockchain hackathon, Bitcoin bankathon, Encode DAO hack, Algo Hackjam, Algorand Greenhouse Hack III, Mega ace hack, and recently ETH Prague Hack
I am probably the only participant who won eth hackathon with algorand project
I would love to get badge from â10 billion online algos hackâ âŚ
@benedettobio couldnt attend the space unfortunately but apparently you dont know how your own protocol works so heres why your answer to the âparticipation stakes vanishes problemâ is wrong:
after the period ends FF gathers all the ALGOs to allow redeeming which means at this point all the nodes loose potentially their whole online stake. even if they register their normal wallet that wont help since they need to manually redeem their gALGO to get their ALGOs back to increase their online stake again. so even in this case there will be a sudden drop in online stake
@trekianov tagging so you know that this isnt a solution at all
heres such a group tx where FF gathers the ALGOs and apparently opt this escrow account out of the g7 app and then opt it in to the g8 app. at this point that account has like no voting power anymore:
https://algoexplorer.io/tx/group/F0glh%2BEKjPriRW%2BanmoxM0MX92RKs2cDtzBzkk4fTKk%3D
and in general i would have expected you to argue against some of the problems brought up in here instead of just saying that some community members are against it and then marketing this forum to add comments in favor of that measure. at the very least this should have been your job @trekianov imo as more of a neutral person working at AF