Forta Proposal on Delegated Staking (FP-4)

Governance Process Proposals
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Forta Delegated Staking

The Forta Governance Council is seeking community feedback and approval of this “FP-4” proposal relating to delegated staking. FP-4 incorporates the community feedback on FP-3 and proposes the following actions that are designed to further increase the security and reliability of the Forta network:

1. Delegated staking: modify the Forta staking smart contracts to add support for delegators to delegate stakes to node owners, and give node owners the ability to assign delegated stakes to nodes within the limits of an increased max stake allowed.

2. Prioritized bot assignment: raise the max stake allowed on bots and modify bot assignment so that bots with higher stakes will be prioritized to nodes according to their SLA and stake.

3. Modification to rewards: modify the scan node rewards distribution so that rewards will be distributed based on the SLA of each scan node, and to a lesser extent on the amount staked, and with rewards shared among node owners and delegators with node owners having the option to keep a commission percentage from the delegator rewards.

4. Support in the Forta App: add support in the Forta App for scan node owners and delegators related to the new delegated staking options, including the ability for delegators to search and discover nodes seeking delegation.

The 4 items proposed in FP-4 are described in more detail below under the corresponding numbered heading. Voting on FP-4 will be determined by a majority approval vote of FORT token holders on Snapshot beginning on September 27th, 2022 and ending on September 30th, 2022 (exact times to be announced through official Forta channels).

1. Delegated staking

Add support in the Forta staking smart contracts for delegators to assign delegated stake to node owners, and allow node owners to distribute the delegated stakes to their nodes for increased security within the limits of the maximum stake allowed per node. The maximum stake allowed per node will be raised to 15,000 FORT and staking parameters may be adjusted further in the future based on community decisions with approval of the Forta Council. Node owners will be required to supply the minimum node stake themselves, and delegation will not be allowed on nodes for which the node owner has not supplied the minimum stake.

Node rewards will be shared among node owners and delegators according to the percentage of stake supplied. Node owners will be able to specify a commission percentage that they will keep from delegator rewards (see more in section 3 below). Changes in the commission will go through a timelock. Delegated stakes will be subject to slashing and will be subject to waiting periods for withdrawals, unless the node owner fails to maintain the minimum stake required on a node in which case delegators will not be required to wait for withdrawal.

All smart contract changes will undergo a thorough security audit and the upgrade of the smart contracts must ultimately be approved by the Forta Governance Council (via the multi-sig wallet which maintains upgrade privileges on the smart contracts).

2. Prioritized bot assignment

The max stake allowed per bot will be raised to 10,000 FORT. The Forta bot assignment algorithm will be modified so that bots with higher stakes will be prioritized for assignment to scan nodes according to their SLA and stakes.

3. Modification to rewards

Scan node rewards will be modified so that they will be distributed to node owners based on the SLA of each scan node, and to a lesser extent to the amount staked.

The node owners will have control to specify a commission percentage they will keep from the delegator rewards. Any changes that node owners make to the commission percentage will go through a timelock.

4. Support in the Forta App

In coordination with the above changes, the Forta App will be extended to allow:

  • node owners to set the % commission they will keep from delegator rewards;
  • delegators to delegate and withdraw stakes;
  • track rewards for node owners and delegators;
  • node owners to manage stakes delegated to them; and
  • delegators to search and discover nodes that seek delegation.
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Who has concerns? Or any questions?

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So, what’s the difference from the previous version of the proposal?

I see that the maximum stake for a node changed from 25000 to 15000.
Also, I see that there is a difference in the blurry statement: “Scan node rewards will be modified so that they will be distributed to node owners based on the SLA of each scan node, and to a lesser extent to the amount staked.”
I’d like to know more details about what “and to a lesser extent to the amount staked” means. So the amount staked will still affect rewards, but how much? Any details please?

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Welcome changes in FP-4 taking into account community feedback. Max Bot staking is also very welcome step as it will be crucial to make the system self sustainable in future when Foundation support will be removed. Now clear formula/weightage of SLA vs Stake would have been great. Also Request some kind of support like foundation staking on FORTIFICATION Phase Node Runners Nodes.

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Can you make some of the proposals more specific? Especially the part about the distribution of rewards. For example, the percentage of SLA and STAKE, we would prefer to see a description like ‘STAKE up to xx%’. Because this will directly affect our strategy of setting up nodes based on cost, benefit, management complexity, etc.

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The offer is right, can you elaborate on the distribution of rewards?

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Thank you everyone for your comments!

The formula will be worked out if and after FP-4 is approved and shared in the future. The guideline that FP-4 states is that SLA will be more important than stake in this calculation.

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Looks like snapshot has overwhelming approved. What’s the timeline to spec and implementation of FP-4?

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There is a general smart contract audit booked for November, so the code associated with FP-4 can be reviewed at that moment, and implemented after that, considering any feedback from that audit.

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Governance Update :warning:

FP-4 on Delegated Staking has been approved by an overwhelming majority :100:

Check all the details here

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Forta Rewards Formula

Following the approval of FP-4, the Forta Foundation is sharing the updated reward formulas that were developed for node runners and delegators based on community feedback received during FP-3 and FP-4. Please feel free to comment below and share your thoughts! These formulas seek to:

1. Encourage node runners to have scan nodes with the highest possible SLA to ensure the reliability and performance of the Forta network.
2. Encourage node runners and delegators to stake and increase the economic security of the network.

The approach involves distributing rewards to participants as a function of their proportional SLA and stake on the network, using the Cobb-Douglas production function.

The score of scan node j during an epoch is:

1264×496 31.7 KB

Consequently, the total score of a scanner pool i during an epoch is:

1238×452 23.4 KB

And the share of the rewards scanner pool i receives during an epoch is:

Consequently, the total amount of rewards allocated to scanner pool i, during an epoch is:

where:

  • F is the total amount of FORT rewards to scan nodes during the epoch.

Finally, that total amount of rewards allocated to scanner pool i is divided between the node runner of that pool and all the delegators to it:

Node runner rewards on scanner pool i:

Delegators rewards on scanner pool i:

1278×462 33.2 KB

The initial values of parameters α and β will be set to 3 and 0.5 respectively.

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The full audit of the Forta Network smart contracts is available here :point_down:

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The Governance Council was informed that some issues can arise when calculating the time-weighted average stake for nodes with a long history using the formulas above. Because of that the Governance Council has determined to upgrade the relevant smart contracts to use the stake at the beginning of the epoch instead of using the time-weighted average stake during an epoch for calculating FORT reward distribution.

The only exception will be new pools during their first week, where the formulas will still be calculated using the time-weighted average stake during that epoch.
You can find the updated formulas in the documentation.

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“the stake at the beginning of the epoch instead of using the time-weighted average stake”

Does this mean that the reward of a pool will be prior to the stake regardless the node number? It must be. Because its meaningless to have a pool at the current situation. Also minimum stake for a pool must be higher to save the staking system imo.

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Hi @vikanren
Rewards are still calculated on a node-level and then distributed to the pool (sum of all nodes). The pool concept helps node operators manage their group of nodes, and delegators manage their delegations, but rewards are still for each node (based on its uptime, SLA, stake). What changed is that, for each node, before the formula considered the time-weighted average stake, and now the formula considers the stake at the beginning of the epoch.
Regarding changes in minimum and maximum stake, this seems like a great topic for the community to discuss in the forum, which could become a proposal.

2 Likes