Delegated staking model

[body]

Hi all. probably many have already noticed such a moment that with an increase in the balance of the node, the rewards decrease

I’ll give an example from my experience:
my pool balance is 90,000 tokens, after staking was launched, I launched 6 nodes at 15k each

pool balance 90k tokens 6 nodes launched, average reward 830 tokens per week, or or 830:6=138 tokens per week from 1 node

same pool 90k but running 36 nodes, average reward 2k tokens per week, or 2000:36=55.5 tokens per week from 1 node

1. calculate the price of servers, the average price of a server is 10 dollars a month, with 6 nodes I earn 3320 tokens per month, take the price of a token 0.13, per month I get about 431 dollars, 431-60 (price of servers) = 371 dollars of net profit
2. The average price of the server is $10 per month, with 36 nodes I earn 8000 tokens per month, let’s take the price of the token 0.13, per month I get about $1040, 1040-360 (price of servers)=680 dollars of net profit
   we look at the monthly income of $$$, 6 nodes at 15k earned $371 in a month of net income. 36 nodes at 2.5k earned $680 net income in a month. the difference in income is almost x2

let’s look at another example:

1. there are 2.5k tokens, we launch a 2.5k node and 100% commission, (as an example) the node earns 50 tokens per week (50x4=200 per month)
   we take the price 0.13, 200х0.13=26 dollars
2. there are 2.5k tokens, we launch a 2.5k node and 15% commission (as an example) people delegate tokens to the node up to a full node (2.5k + 12.5k = 15k) and our node starts earning 135 tokens per week (per month 135x4=540)
   we take the price 0.13, 540х0.13=70.2 dollars
   but since 12.5k are delegated tokens to our node, our share of the pool is only 1/6 (15k:2.5k=6 )
   we calculate our income in dollars ( 70.2:6=11.7 dollars is our income from the total stake on the node)
   we have 15% commission ( 70.2 total income - 11.7 our total staking income = 58.5 delegate income) (58.5 : 100 x 15 = $8.77 our 15% commission)
   we balance our income for the month ( 11.7 dollars our income from the total balance of the node + 8.77 dollars our 15% = 20.47 dollars our total income from the node to which we can delegate
   node 2.5k and 100% commission income per month = 26 dollars
   node 2.5k and commission 15% (which was delegated to a full node of 15k) income per month = 20.47 dollars
   almost 20% difference

I really want to see user comments, how they think this staking model is correct and what should be changed in it, and I also want to hear the opinion of the team on what they based on choosing such a staking model

[And31]

fully agree with the author, the token is falling, its price, the movements of the staking and reward team are stupid. I’m going to shut down the nodes and sell the token. disappointed.

[sawa]

Claim rewards - Forta Docs

Please check the formula. Alpha = 3 and Beta = 0.5.

The team is encouraging nodes operator to add more scan nodes instead of staking more.

Calculation detail:

Moreover, about the commission, you’d better set commission over 50% to ensure your profit as owner.

[sawa]

Just sell your token

[sawa]

Just leave! YOU STUPID.

[eozdemirok]

hello friend good day I believe there should be a new regulation on Forta. There is already a discussion started by the forta team for this. I don’t agree with you on this. Someone running a node shouldn’t get little rewards.

Node running = Cost, maintenance and time consuming.
Stakink = No liability whatsoever. You just lock and get reward.

So what could be the suggestion? The goal was to reduce the number of nodes. Different structures can be produced for this. It would be nice if running a node requires 15K stakes.

[thonguyen]

you are right , my reward was /2 when i switched from 2500fort stake nodes to 15000fort stake nodes . so sad !

[body]

developers and team representatives, and you read the forum, I don’t notice any of your messages about the situation discussed in this thread

[Dani]

Hi @body , I thought I could chime in here and share my thoughts too.

The question here is what is best for the network, and then whether the incentive structure, and in this case the node rewards formula, is incentivizing that behavior or not.

I believe that the goal of this and what the network should optimize for, is: (a) to have large and enough capacity to run all the bots that users may demand; as well as (b) high economic security that incentivizes node operators to act honestly and do good work.

Do you agree that these should be the main goals of the network in terms of node running?

In this sense, the number of nodes in the network enables (a), this is to say capacity, while the amount of FORT staked enables (b), this is to say security. Of course, the network should also consider the quality of node operator’s work, and that is where SLA also comes into the equation.

Then, the rewards formula should incentivize a balanced growth of both the number of nodes, as well as the amount staked, as well as good SLA. The rewards formula can be judged as good if it contributes to encouraging participants in the permissionless network to make individual decisions that end up resulting in these goals.

If we think about the case of an individual node operator, who to simplify let’s say holds 10,000 FORT and wants to stake it, one could think whether they should run 1, 2, 3 or 4 nodes. For the moment we can think that delegations are not in the picture (eg. commission = 100%). As you correctly calculated, rewards would be highest if they decide to run 4 nodes with 2,500 FORT of stake each. However, the cost of running 4 nodes may be higher than running 1 node (this would depend on the operational costs of each operator). Therefore, under this trade-off, node runners with very low costs may choose to run 4 nodes, while those with higher costs may prefer to run 1, 2 or 3.

When delegations come into place, another variable becomes important which is the commission. As @sawa correctly pointed out above when sharing the rewards formula, when a node pool receives delegation (more stake), the pool earns higher total rewards (since more stake brings more rewards, although marginally decreasing). However, these rewards are shared between the node operator and the delegators. Then, there are two effects, one which increases rewards to the node operator, while the other diminishes them. For the node operator, each FORT they receive in delegations makes them earn more rewards because they charge a commission over higher rewards, but at the same time lower rewards because their share of the pool is smaller. If the node operator wants to maximize rewards, it is important to consider what commission to set, because that will determine which effect prevails, and if receiving delegation makes them receive more or less rewards in the end.

As an example, as an extreme case, if the commission was set to 0%, the node operator would be worse off when receiving delegations. However, if the commission was 99%, they would be earning more rewards. Therefore, each node operator needs to determine what is the optimal commission for them. As you said, some may choose to set a very high commission and receive few or no delegations, while others may prefer to set a smaller commission and get more delegation.

What do you think about this? Curious to hear your thoughts.

[body]

hi. glad to hear your opinion
but I can’t agree with you
a) at the moment the total number of bots is 1,085 (some bots work in several networks) so let’s take a reduced figure of 1k bots
nodes currently running 3,964 (some nodes have more than one bot, I saw a node with 11 bots)
at the moment there are 4 nodes per bot (but since the bot cannot work on 4 nodes, it turns out that 3 nodes work in vain, there are no bots on them)
from a personal example, I have 35 nodes running in November and during this time not a single node had a bot
at the moment, this number of nodes is not required 75% of the nodes work without bots
b) regarding economic security: I have a pool of 90k tokens, for maximum rewards I need to run 36 nodes, of course I will look for servers cheaper than 2/8/40 for $10
and if I received a reward in the ratio of the balance of my node, and the larger the balance of my node, the higher the chance that bots will connect to it, then I would have to run 6 nodes and of course I would take better and more expensive servers (for example 8/16/ 100 because I would have known that bots would connect to my servers and I would need more resources to work well). thus, my nodes in terms of iron quality would be much better (I saw nodes on which there were several bots and their weak was less than 0.9)
I agree with you that the main goal of a quality response of bots is the quality work of the nodes to which these bots are connected, but now there are such nodes in the networks that have several bots and the quality of the sl is below 0.9.
How do you think the bots on such nodes perform their functions qualitatively?

regarding the basic staking model:
people came to the project not for technology, they don’t give a damn about them, people came to earn money
and while the project provides good conditions for earning, everyone is happy with everything, but as soon as earnings become less than expenses, people begin to leave
in forta, so far, earnings exceed expenses, (but nevertheless, some people sell and leave the project)
in my opinion, this is due to the fact that the project is not transparent, there is no understanding of how the team sees the development of the project for 1-2 years ahead
almost no dialogue with the team
marketing is completely absent, no one knows about the project
I don’t understand the staking model at all, 75% of the nodes work in vain, there are no bots on them and the team comes up with a staking model that creates even more empty nodes
in my opinion, this model is beneficial only to those people / wallets who are early followers of the project and some of these wallets send 100-200k per stake, so they benefit from such a mechanism (when 30 nodes are launched in the pool at 2.5k each, they can send 337,500 tokens to this pool), but if they had to scatter over 10-15-20 pools, then they might not have delegated
but that’s my conclusion, maybe i’m wrong
can I ask you a question?
you have 2.5k tokens, what will you do with them, will you launch your node or send them to staking, knowing that the larger the balance of the node you send to, the less rewards this node will receive (including you) ???

How long have you been in the crypto space? can you tell me some project where there is staking and where there is such a model where the larger the balance of a node/pool/validator, the less rewards it receives???
This is the first time I’ve seen this in 8 years.

how do you think a node with such a sla can provide good work for 2 bots ? and a node with 0.97-0.98 sla stands without a bot. How do you think this should work?

[sawa]

I would like to reply this.

a) at the moment the total number of bots is 1,085 (some bots work in several networks) so let’s take a reduced figure of 1k bots
nodes currently running 3,964 (some nodes have more than one bot, I saw a node with 11 bots)
at the moment there are 4 nodes per bot (but since the bot cannot work on 4 nodes, it turns out that 3 nodes work in vain, there are no bots on them)
from a personal example, I have 35 nodes running in November and during this time not a single node had a bot
at the moment, this number of nodes is not required 75% of the nodes work without bots

As I mentioned on Discord, the team has to consider redundancy. Enough (or over) nodes preparation is necessary for bots increasing in the future. It is hard, uneasy and panicked to increase nodes in hurry faced with bots increasing in sudden.
So, although many nodes are free at the moment, which causes some degree of waste, redundancy is necessary. Take a step back and say, the total reward for nodes operation is fixed (200k per week) so the cost is controllable.

[Dani]

@body , I agree with you that there seems to be plenty of capacity in the network and there are more nodes than needed. However, being permissionless, anyone can spin up a new node if they decide to do so, so it is just a matter of incentives. Maybe weekly rewards are too high at the moment, and that is why node operators are creating new nodes. Maybe it is because the network is really powerful and nodes are really efficient at running bots and a couple of hundred of nodes can run 1,000+ bots that scan 7 chains.

Regarding what you mention about transparency, I definitely don’t agree. There is an active community of node operators in Discord and conversations are happening in the open there. The same happens with bot developers and security researchers in different spaces like Discord, Twitter and Telegram. In addition, the Twitter account, blog and newsletter summarize the developments in the network and provide an easy way of accessing this. On a governance level, Governance Council meeting minutes are posted in the forum, and the Forta Proposal Process happens in the forum and in Snapshot (latest has been FP-4 for delegated staking, and now discusssions around the introduction of fees).

Then, from what you say about what to do with 2.5k FORT, I think it depends on each’s costs, preferences, etc. Based on the calculations you shared before, it looks like 5-15% commission is low for you, and maybe you should be setting it at a higher range.

Finally, regarding the relationship between staking and rewards, I think that there is a misunderstanding between rewards to the pool and rewards to the node operator. As @sawa stated above, and as the formula clearly shows, rewards for the pool increase with stake, but have marginally diminishing returns. More stake = more rewards for the pool. Then, regarding the node operator, more stake will bring more rewards if the commission is high enough. Maybe the problem is not at the rewards formula, but at the range at which commissions are set.

[body]

Hello. if I set a high commission of 30-40-50%, then no one will simply delegate to my pool, who will agree to give 30-40-40% of their income? it is much more profitable for a person to launch his node and get 2 times more profit,
I believe that the staking model that exists now does not contribute to the development of the project, but rather brings great harm to the project

[jininja]

More fundamentally, we need to create demand for tokens. Token prices are low and liquidity is significantly lower because the market has little demand for $FORT tokens.

Can we trade 100,000 FORT tokens without slippage right now? Impossible.

When demand for tokens is created, there is a sense of stability in token prices and liquidity. And also increase compensation to node runner to 400,000 per week as before.

[sawa]

Hi, maybe you should not assume that “no one” or “who will”, it totally depends on the market.
Take a step back and say, you can absolutely set 100% commission now because the market has not reacted to this model and considered the commission enough. Believe me, just set 100% commission, it will not do much harm to your owner rewards.

[Haky]

What vps service do you use at $10 a month please ?