Thank you East for the thorough analysis and proposal refinements.
I believe we need to make changes to the protocol, but I’m not certain I understand the thinking behind limiting stake size. I think limiting stake size to 3M would create incentive for large holders to sell their excess, which would create significant sellpressure. Furthermore, the intent behind the beta staker program expansion (TIP-067 Part 1 & Part 2) was to add highly competent operators with significant amounts of T staked to increase security of the network. I feel like limiting stake size would be opposing this.
Based on data from tbtcscan.com, adjusted for inactive and miss-configured nodes:
| Group | # of nodes | Percentage |
|---|---|---|
| Small (<3M) | 78 | 48% |
| Medium (>3M,<10M) | 25 | 15% |
| Large (>10M) | 61 | 37% |
| Totals | 164 | 100% |
According to the sortition pool contract there are 35 beta stakers, which accounts for over half of the large stakes.
I do like the idea of limiting emissions, however.
Another point I believe should be discussed is the allocation between tBTC and TACo. I think it would make sense to adjust a few levers here: adjust the minimum required to stake tBTC to 3M, hold the min for TACo at 40K. Remove the 75/25 split and replace with reward caps for each application that are distributed pro rata. I envision the share of the monthly rewards to be determined based on a twap calculation of stake size.
I also like @Agoristen’s thought:
Limiting the number of nodes that are eligible to participate in this manner would create a strong incentive to buy T, or at least incentive to NOT sell staking rewards. Distributing bridge fees to tBTC operators in the manner @East proposed above appears adequate to me.
I’m not sure there would be a reason to complete the auto-compounding dev work because half of the current stakers wouldn’t be able to take advantage of this option due to stake size limits. However, I think auto-compounding would be a fantastic way to reduce selling incentives.
Another facet to consider are the bootstrap nodes. They are paid monthly in T, which I imagine gets dumped on the market to cover operating expenses. That’s $30,000 in T per month potentially being sold each month. The bootstrap node IP’s are hard-coded in the tBTC client to enable nodes to discover other nodes on the network - I think we should consider hard-coding the beta staker IP addressees in order to sunset the bootstrap nodes hereby saving the DAO a solid stack per month.