Well, then we’re leaving this red flag be left here for posterity if it’s not up for discussion. Since Polkadot has gone for the appeal of authority road, apparently even Gavin mentions in a recent interview that approximately 2k alone should be left for operations of the 3-5 machines for a single future node which is still extremely optimistic in our experience as that usually means the cheapest and highest populated data centers (Hetzner DE, FI, etc.). And that without any mention of real world inflation i.e. increase in operation costs which are now rampant.
We have already many solid companies that have even transcended Polkadot to other chains and and to other non blockchain services that have already mentioned operational costs, hopefully you get to listen to them too. Hopefully there are still ears out there for further consultation.
Just a small addition that as well as being deployed as additional collateral, a big advantage of eagerly minting the remainder of the issuance is as an additional source of liquidity between DOT and network stables in extremis.
If some black swan event were to cause mass liquidation of a stable backed by DOT, the positions would be liquidated and corresponding value of stables bought and burnt, potentially making the stable illiquid and having a knock on effect of the valuation of the stable (depegging). This reserve could be deployed as collateral to mint the stable to provide as liquidity and avoid a death spiral.
With overcollateralised stables you always just choose the guarantees/risk. Eagerly minting could mean that the collateral required for the stable could be lower with the same peg guarantees, or that the guarantees are better at a given required collateral.
This obviously isn’t without cost, and would be need to be investigated and simulated. This equally obviously is not a replacement for a well designed stable, and a healthy DeFi ecosystem with market makers/arbitrage
Well reasoned breakdown of the pros & cons here. Definitely seeing the merits to this idea @joepetrowski. I’d be most concerned about the optics as you both are mentioning. Is “marketcap” ultimately decided by only the circulating supply? Or is that not standard?
Not sure if issuance of bonds on future issuance as collateral would work to the same end if insta-mint doesn’t turn out to be popular?
I see, so does this essentially mean that the self-stake could be “crowdfunded”? and if so would it be up to the validator and its external stakeholders to determine arrangements between themselves regarding the distribution of the incentive rewards the validator would receive for the combined self-stake?
Alternatively, could we envision this being done in a trustless way such as the current nomination rewards payouts? (and assuming this last scenario, from the point of view of the external stakeholder who trusts their dot to the validator, how would it differ from the current nominator role and slashing risk?)
The only aspect I see the unbonding queue being important to validators, is for validators that don’t make it to the active set. Contrary to now where you can validate with just 1 DOT self-stake, having even the minimum of 10k DOT sitting idle is a big opportunity cost and dormant capital. This becomes exaggerated for validators that bond the optimal 30k or more.
Basically this is needed not for validators that choose to stop validating but as recuperation method for those who do but are not selected.
The idea behind this is that any form of crowdsourcing is between people that have an arrangement between them and self-organise the management of the self-stake through a single account, e.g. a multisig, which is also why the validator whitelists the specific account that can place the self-stake.
Theoretically it could be done trustlessly, but then you’re right, it’s not that different from nominations. But as with nominations, this removes the validator’s skin-in-the-game. So, you want trust and a relationship between the validator and the person(s) placing the self-stake in order to consider it skin-in-the-game and ensure it contributes to the network’s resilience, i.e. the validator cares if it’s slashed.
So, if we consider that the self-stake is not placed by a virtual staker, I think it would be technically too complicated (if at all possible) to do the rewards payouts trustless. And it’d be pointless too. If 2-3 people trust each other to place the self-stake, they should trust each other to split the rewards too. And if I’m not mistaken, the proposal suggests that the rewards for the self-stake go to the account that placed it, not to the validator (unless of course it’s the validator who placed it).