Nimiq 2.0 Staking Idea to make and keep it decentralized

Hi Nimiq Community! :fire:

This is a mindset and idea that was conceived by the community. I have developed this idea further as a community member.

Current situation: Currently the Nimiq network is still running on the Nimiq 1.0 network. In an undetermined amount of time, the transition will come from Nimiq 1.0 (mining) to Nimiq 2.0 (strake).

Current problem: Mining Nimiq is accessible to everyone. There are a number of pools where you can mine Nimiq. The more Hashrate you have the faster you find a block and thus earn rewards. The largest pool has a greater chance of mining a block.

You can see that each individual miner participates in the largest pool of mining Nimiq. ICEMINING currently manages 66.23% of the total hashrate. This is anything but decentralized and dangerous for a double spending attack.

Community idea: From the Nimiq community came the idea of adding a limit to the straking pools for the Nimiq network 2.0. This is to prevent all the stakers from staking in the largest pool and eventually becoming a centralized network. Something you see now with the Mining of Nimiq 1.0.

Staking rate


An example of a limit per staking pool.

Supply details

  • Total supply 21,000,000,000 NIM.
  • The limit of a stake pool is 100,000,000 NIM.
  • This means that there can be 2100 pools of 100,000,000 NIM maximum.

Frame 5

Validator 1

  • Charges 5% pool fee. He donates 1% of his fees received each month to a charity for medical research.

Validator 2

  • Charges 5% pool fee. He does not donate anything to charity.

Validator 3

  • Charges 5% Pool fee. He donates 0.5% of the fees he receives each month to a climate change charity.

Validator 4

  • Charges 6% Pool fee. He donates 2% of the fees she receives each month to a Nimiq event she wants to host.

Other Validators

  • Pools with good and creative ideas.

Ideas are endless

As you could see above in this topic, each validator has found their own idea/motivation to recruit Nimiq stakers. Think about this… there are endless ideas you can implement.

  • The people who care about charity with the topic of special medical research will stake their NIM with Validator 1 pool.

  • The people who have none of the interest and just want to stake their Nimiq will stake their NIM with Validator 2 pool.

  • .The people who care about chartiy with the topic of climate change will stake their NIM with Validator 3 pool.

  • The people who care about a party with the topic of Nimiq event will stake their NIM with Validator 4 pool

Frame 6

Bad Behavior Validators

Requirements of a good validator:

  • A validator with a stable NIM pool. And he keeps his appointments. (If these are made)

Example of the consequences of a bad validator:

  • Suppose Validator 1 does not pay the monthly amount of fees (1%) he receives to the charity medical research OR it isnt a stable p.a. pool. Then stakers can decide to choose another pool that are more to be trusted.

Frame 7

Conclusion:
With this community proposal, the Nimiq network can become very decentralized and creative.

Below are some visualizations of what it would look like if this idea were implemented. Keep in mind this is not official graphic, its just an idea :).

  1. Here I added a search bar so users can easily find their favorite validator. Or the validator they’ve read about. As you can see I will choose Just stake NIM.

  2. Here you see a brief description of what the validator has as an idea why join his pool.
    -

  3. Here you can see a brief description of what the Fee entails. Also I added page numbers below the exit button, right above corner.

  4. If you click on the button ‘‘USE THIS VALIDATOR’’ (see number 2) you will go to the last page 3/3. Here you can set how many nimiq you want to add to this validator staking pool.

  5. Below I have created an additional visualization of a charity validator. This is to show that the ideas are endless. Especially if the price of Nimiq will increase in the future.


End word: Above you have seen 2 ideas.

  • Limiting a pool.
  • And being creative of recruiting strikers.

I hope it has been explained clearly and concisely. If not, please ask your question.

Now that I’ve posted this. Let’s start discsussion !!! :smiley: :beers:

4 Likes

Some people suggested of spliting the staked nim from one address to different pools and that would be cool to change it up by having one pool with rewards payout and another pool restaking some of the staked rewards all in one address. But i believe right now they suggest adding an address and spliting the Nims to each address having different staking pools. Any word on the slashing the rewards for bad actors validator? Or if they get some of the Nims being giving to other good actor Validators?.

I would like to get involved in the discussion, but I don’t have enough expertise. I think this is happening to many community members like me. To all tech-savvy folks, please join the discussion :+1:

True you cannot use the same Nimiq address to distribute your stakes among different validators. But you can create multiple addresses in that same nimiq wallet. And with these addresses you can stake at different validators that you want, from the same wallet.

Hi @FonsL,

thank you very much for your detailed description of the idea and the mockups of the interface!

While we understand the motivation behind limiting validators in their size, so the network does not become centralized on one or a few validators, we also had these discussions internally for a while.

Your proposal to limit a validator with an absolute amount (limit in NIM) does not prevent one actor from running more than one validator, even from the same node (no additional cost). We could have Icestaking1, Icestaking2, Icestaking3, etc… unlimited.

Our current plan is to rely on a “TrustScore” assigned to each pool, that will be calculated from various properties. Most importantly their stake dominance, but also from their uptime, payout reliability, maybe charitable function. We are planning to publish more details about this when we get closer to the Albatross mainnet upgrade.

Until then, we of course welcome community participation and are reading this thread with great interest!

Love the ideas of having auto donations of staking rewards to charities.

Instead of a hard cap on the amount of NIM in a staking pool, I think there should be a saturation limit, where if a pool hits a soft cap, the staking rewards gets lowered. People can still delegate to the pool because it’s not a hard cap, but they just won’t get the best rates possible.
This allows some freedom (no hard limits) and incentivizes a more even distribution once the users see they are not getting higher rewards and shift their NIM around to other pools.

Yes, the problem of a pool operator making multiple pools to circumvent this will always exist, but at least this will prevent extremely large pools.
To add on to this, allowing validator node as a service would also help in term of decentralization. More users can choose to run their validator nodes and not rely on a pool.

I never liked the idea of slashing validators as it’s way too harsh and can discourage new validators.

1 Like

I appreciate everyone’s efforts towards a better Nimiq ecosystem :clap::handshake:

Well how other chains solve this problem is that validator need a LOT of self stake instead of only a few tokens, so you are bound to amount to the funds you have 10k Nim is way to small with current price.

In most top protocols they don’t really have pools, but they regulate it on chain which makes total sense because there is no trust needed which makes sense in blockchain.

Avax for example only allow delegation x times your self stake to prevent it from getting to large, so the validator owner holds the most risk so incentivized to keep it running as good as possible.