Thank you to those who joined our general AMA and livestream session on January 25th! We had a great time answering your questions and talking about our Delegates Program and we would like to provide a brief summary for those of you who weren’t able to join, as well as, below you will find the questions that were chosen by the team and qualified for bonus points.
Our co-founders Raullen and Jing, and Head of BD Larry hosted the livestream to communicate with our supporters and to let you know more about the IoTeX recent updates!
Recently we have released our Delegates Program and announced the minimum requirements, application and voting process and of course the rewards that our community and members can expect! This session has been focused mostly on explaining this program in more detail and answering specific questions from our supporters.
Why are there minimum requirements and how does it affect security?
At a high level, what these requirements are meant to do is to establish a minimum threshold for our block producers or delegates. That’s necessary for many reasons since the design is trying to balance the security vs. inclusiveness and of course we want to be inclusive and have everyone participate in our network, but at the same time, we want maintainers of the network and all of its participants to be responsible and that’s why we came up with these minimum requirements. So I guess, there are three categories, one of them being the hardware requirements and we have minimized this part to save the hardware cost for you guys and our engineer team has done a lot of work, trying to cut down all the unnecessary functionalities for this blockchain software and trying to stabilize it. Also, there are some very cool features they are working on right now, for example, in EOS, I know, lots of people have the pain of downloading everything and backing up all the blocks every day. The feature that we are trying to implement is this incremental back-up process, basically, every day you will just have to back-up this many portions of the blocks. Also, we wanted to add that in regards to these technical requirements, we know that not all of you have the skills or experience but don’t worry, since we have already set-up our technical support team and in the following weeks, we will look through all of the applications, so you can just apply if you want to be a part of our Delegate Program and we will have our tech support team walk you through and give step-by-step instructions.
PEGS — Participation, Evolution, Growth, and Sustainability
PEGS is an acronym that encompasses all of our guiding principles for the overall design of our Delegates Program. So basically what we are building is an infrastructure, a platform, that we want to be open, so that many people can use it, and that’s why we need to provide a lot of features, such as scalability, privacy and at the same time, we will have to make it developer-friendly, so then people can just build easily on top of IoTeX, that’s kind of our definition of Participation. We will have up to 100 delegates that will be receiving rewards in our ecosystem, so we’re trying to make not only the inclusion part very open but also the rewarding aspect, which we will dive into later. The next one is Evolution, driven by the stakeholders, not just the big players or block producers, but all the members, voters, and general token holders. We feel that this part actually depends on the participation and on all the token holders will have the incentive and benefits of joining this community. In our program, we have different roles, for example, you can be a voter, or, if you vote with more than 1,000 tokens you can be a member, or you can be a delegate and contribute more to the community or you can be a professional network maintainer, so everyone will get their roles to vote for all the delegates participating in this ecosystem. And all of these joined efforts will drive the entire network to evolve through time. So now, the most important thing would be to the bootstrap the network, as we need to make sure that we have designed this system properly so that everything will be executed successfully. Our next guiding principle is Growth, in a form of a stake, so this is basically the concept of not only staking tokens to show your commitment to the network but also staking for different durations and contributing to the network in other meaningful ways. In the future, we will release this feature, whereby referring a certain amount of traffic to the IoTeX network, you will also increase your voting power or staking power, similar to a proof of contribution idea. If everyone’s doing that, especially like developers, or people with decent traffic and ideas, then IoTeX blockchain can become a really useful platform. We want this network to be self-sustainable, which means that we don’t really need external mechanisms but internally, they will drive enough transactions, and those transaction fees can already maintain the entire network to run and operate sustainably. Our community will also help to promote the project and refer more users to the ecosystem, use products, and DApps, and that way they will generate enough transaction fees, gas fees, that will be contributed back to the reward pool so that all the delegates, will have enough rewards to operate, run and maintain the network. So this is the high-level outline and how we designed this system.
On hardware requirements
We really thought about these four guiding principles in our design and that translates to the requirements that we have set. As Raullen, mentioned earlier, here are some of our hardware requirements: server and backup server both running IoTeX software, 16 GB of RAM (32 preferred), 4TB of local storage, 64 bit CPU, 8 core processor (2.4 GHz each), 100MB network and on the software side, running Debian Stretch Linux, Golang v1.10.x and your own monitoring and alerting tool, such as the network Explorer. So you have two choices to do this, you can set-up your own hardware or you can use the cloud, such as Amazon Web Services, the estimate we have given if you want to go with the cloud provider is around $5,000/year. Some projects, not to be named, charge their block producers $150,000 of hardware costs per year, which goes back to the lack of sustainability. During the design phase of the blockchain, we thought about reducing the load that has been put onto the machine, so we simplified lots of internal data structures designs to make it performant and also cost-effective.
Operation of the network
Something that we don’t falter on is the operational side, we need people to be on call, supporting nodes and maintaining a good reputation in the network. In terms of the operation, if you really chose to be a consensus delegate, you need to have some technical people on your team that really understand how to operate and maintain the network, but don’t worry if in the beginning you don’t have anyone, because we can connect you with some really professional technical members, that already have experience in running nodes and can provide instructions or become your technical partner, and our internal technical support team can also help you to go through all these things. But what we need from the first batch of delegates, especially during the bootstrap stage, is a lot of response, there’s a lot of sync up to be done, so we will set up channels to make sure we are available for you 24/7 and also we want you to be responsive during this period.
Design of the Delegates Program: Staking & Voting
The governance side of the blockchains is very differentiating and I really think we created something great here. First, let’s briefly re-introduce the roles of the network. So we talked about a voter — anyone who stakes IoTeX tokens and votes for a delegate. We also have a concept of a member, which is not really something that’s built into the protocol, but this is something more on the marketing side. If you’re a member, you stake at least 1,000 IoTeX tokens, that give you certain member-only benefits. Very soon we are going to be running a really big marketing campaign to incentivize people to vote and educate them on why it’s important and profitable. So the membership is something that we will release more details on in the future. A delegate is any token holder, who stakes at least 1.2 million IoTeX tokens by themselves and also has a total of 2 million total votes, so that can be 2 million self-staked tokens or that can be 1.2 million self-staked tokens plus 800,000 votes from others. And finally, consensus delegates are the top 36 delegates, that have the most votes and those are the ones that are exclusively responsible for verifying transactions and producing new blocks. We also have two different rewards, there’s a fixed block reward, that’s reserved only for consensus delegates and there’s also a shared variable reward, that is shared by the top 100 delegates. Our rewards are definitely spread out, and depending on how you want to contribute to the network, whether its becoming a delegate and representing the network, or being a consensus delegate and running and producing blocks, there’s a lot of ways to participate.
Campaigning to become a Delegate
A lot of the times, the block producers will not just take all the rewards for themselves, that’s selfish and maybe that’s the reason why they aren’t voted in. For this bootstrapping stage, this is really a joined effort, from the foundation perspective, we also will host huge marketing campaigns. During this network bootstrapping phase, we want all of the token holders to become users of this ecosystem, that’s why we have a role of a “member”, as long as you stake 1,000 IOTX, then you will become an IoTeX member. During the launch stage, you have a chance to become a Mainnet founding member and we have already designed a mechanism and we will issue the founding member badges to each of you along with the member-only benefits, coming from our launching and affiliated partners. We also want to re-emphasize the importance of voting in the network. It’s not just about getting these potential rewards redistributed from block producers/delegates, its more about asserting your influence onto the network and participating in the governance of IoTeX’s pretty much digital democracy, where everyone’s voice is heard. So we really want to encourage our community to vote and we will have campaigns to share the details about the voting process and develop a lot of interesting tools to make the voting process very easy.
We ask each candidate to come up with your own voting page so that you showcase your team, capabilities, and your vision of making the IoTeX ecosystem grow and also maybe you can showcase some of the tools for your voters, a calculator can be one of them. From the Foundation, we will come out with some standard tools for you to use, but if you can develop something better or improve the existing versions, it would be great!
We did some in-house simulation and based on the results for the first 12 BP’s we estimated ROI (return on investment) per year could range from 35 % — 25 %. It can go higher if there are fewer people staking and voting and it could be lower, of course, if many people are participating and also putting lots of tokens and staking. Anyway, if we look at this from a long-term perspective, it will be a very good kind of investment, both for the IoTeX ecosystem and also from a financial perspective. Another thing we will be releasing soon is the simple profit calculator spreadsheet, that will provide you with some estimates on staking and what it translates to in regards to votes. Also, we encourage, whoever can help us to build a fancier looking calculator, that would be very appreciated.
For our staking process, we use the concept of the number of votes you receive is the result of the number of tokens you stake but also the amount of commitment that you show by choosing a longer staking duration. So for those of you that haven’t taken a look at the graph in the blog post, we recommend, that you take a look. Basically, the concept is that by staking a specific number of tokens and choosing a specific stake duration, whether it’s 14 days — 15% bonus and if up to 350 days, you’ll get a 30% bonus on your votes. So in effect by getting 15% bonus you’re also increasing the rewards by 15% as well. We encourage people to play around with a lot of different combinations of token amounts and stake durations and soon we will also issue a tool for this.
1 token= 1 vote model
We chose this model for a few reasons. One of them is because some people are willing to stake longer, that means he will actually increase his own risks, in terms of the price fluctuations, hence, he should get more rewards. And from another perspective, if a person has a long-term belief in IoTeX, he should be getting more rewards, compared to other folks. So that’s why we have this bonus curve here.
If the minimum staking is 0, you can just stake and take out, no bonus votes for that, but if you want to stake for 7 days, which comes to 7 epochs, you will get a 15% bonus, roughly, and if you are willing to stake longer, you will get even more. I think a lot of things work in this way in the real world. You will see that we use different parameters and try to engage holders with a long-term commitment to the community and give them more power to vote. We feel that if they believe in us long-term, they will represent the entire ecosystem and can help to drive the right decision. And at the same time, we don’t encourage staking for very long periods, for example, 10 years, the max duration we have right now is 1 year. We think that our design provides a lot of optionality for a lot of different profiles, for someone who’s an active trader, they can choose to not specify the stake duration, meaning they can unstake and withdraw the tokens at any time. But if you’re a holder and you plan on holding IoTeX tokens for a long time, one thing we encourage you to do is rather than having them sit in your Binance or Ledger and collect dust, you can put those tokens to use by staking them or voting and receive rewards, at the same time influencing the IoTeX network with your tokens. So whether you’re a trader, hodler or a long term investor, there a lot of ways and a lot of good reasons for you to stake and vote.
Why 20% circulating supply to bootstrap the network?
The network-wide requirement is that 20% of the circulating supply must be staked and voted for, in order for us to securely bootstrap the Mainnet. The main reason for having such a requirement is that we don’t want to start the network with few tokens getting voted and staked because this will increase the security risk a lot. For example, a whale will come and join the network, he has lots of tokens, so he can just do whatever he wants in the network. That’s why we want to reach at least 20% of circulating supply to be staked and voted, mostly this is for the common good of everyone and we really need everyone’s help and participation!
There’s going to be multiple phases of the Mainnet, after we can really securely bootstrap the network, over the next month or so, we are going to be working with a smaller set of delegates that have a lot of experience running nodes and we have this concept called Mainnet Rehearsal its basically producing blocks in the Testnet in preparation for the Mainnet. Around March is the expected go-live date of the IoTeX Mainnet, after that, there will be 3 phases, where we will use robot delegates which are algorithmically driven to work alongside elected delegates.
Quick glimpse of our roadmap — what’s coming up
For the 1st quarter, up until the end of March, we will exclusively be working on the Mainnet launch and our Delegates program, so we will launch the network in a very secure, reliable and also efficient way for everyone. After that, in Q2, we will focus on the privacy-preserving computation, first of our subchains, as we already have a working prototype in progress, so we will make it into a working product and probably will ship at the end of Q2 or Q3. Also, there are more product development ongoing, we have a team in Singapore working on something that I cannot tell, which we also launch in Q2-Q3. And for the rest of the year, we will have product launches, so you can expect lots of things being built on IoTeX and very soon you’ll have an opportunity to use our products.