Tokenomics 3.50

Table of Contents

Introduction

The TFGrid will be compatible with two tokenomics policies. The new tokenomics policy will be 100% backward compatible with the currently used farming reward model. This means that farmers would keep on earning the exact same amount of tokens if they choose not to upgrade to the variable model.

Fixed Farming Policy

Farming

  • For all existing farms, the rewards are the same as today. We call this the Fixed Farming reward.
  • For every node in the farm, we calculate the amount of CU and SU.
  • We also check the amount of NU (public network traffic) and IP (public IPv4) used on the nodes by workloads.
  • The uptime over the period is calculated based on the uptime reports in the chain.
  • The farming parameters get fetched from the chain. These parameters depend on the certification of the node (certified or not) and the certification of the farm (gold or regular), and are then used to calculate the total maximum payout for the period.
  • If the farm is a gold certified farm, the node gets tokens from minting if it has at least 99.80% uptime in the period. For non gold certified farms, the payout is scaled proportional to the node uptime percentage (e.g. 50% uptime -> 50% of the total payout).

Utilization CU/SU

  • 10% goes to the stakers on validators.
  • 40% goes to the TF treasury.
  • 50% goes to burning. This is more than in version 3.11 and it should largely compensate for minting.

Utilization Extras

  • Utilization extras will not be possible.

Variable Farming Policy (NEW)

Farms can decide to upgrade to Variable Policy, we highly recommend farmers do so.

Farming

  • New tokens (TFT or CHI for v4.0) are only the result of CU/SU farming.
  • Rewards are always variable in line to parameters as specified on TFChain.
  • Rewards are automatically staked on the 3Node.
  • There is a Farmer Staking lockup period of 1 year or 30% utilization, whichever comes first.

Utilization CU/SU

  • 20% goes to farmers for SU/CU utilization.
  • 10% goes to the stakers on validators.
  • 10% goes to the stakers on farms (for utilization of that farm).
  • 10% goes to the TF treasury.
  • 50% goes to burning. This is more than in 3.11 and should largely compensate for minting.

Utilization Extras

As can be defined by the farmers, this represents an extra source of income:

  • 70% goes to the farmer for the utilization extras
    • Extra rewards for CU/SU (per node)
    • Extra rewards for Dedicated Nodes (per node)
    • Define prices for NU and IP Addresses (per farm)
  • 10% goes to stakers on validators.
  • 10% goes to stakers on farms (for utilization of that farm).
  • 10% goes to the TF treasury.

Gold Farming, Certified Vendors and Nodes

We propose to keep the certified vendors and nodes as they are currently for TFGrid 3.50 while we prepare the following. There would be no more certified farm or gold farming. That being said, certified farm and gold farmers can stay on 3.11.

Certified nodes would appear at the top of the list when users will want to deploy workloads. Those 3Nodes will be of higher quality and farmers can decide to charge extra TFT as a compensation.

3Nodes Parameters

3Nodes Parameters: Users

Users could consult a ThreeFold interface and see 3Nodes' statistics based on given parameters.

Concerning the node selector, users could select certified node as a whole (overall high specs) or based on specific parameters (e.g. only high SSD speed).

The parameters could be the following:

  • Hardware parameters
    • CPU speed
    • RAM speed
    • SSD speed
  • Availability parameters
    • Uptime
    • Bandwidth

For example, we already measure the total uptime per minting period. We could then build an interface, most certainly on the ThreeFold Dashboard, where users could see the total uptimes (based on different periods, e.g. per week, per month, per year, etc.), to see how the nodes have performed in the past.

What we propose is that nodes could be judged individually for different parameters. This could be more versatile. As a simple example, say a user needs a node that has high uptime to keep their Telegram bot alive. In this case, this type of workload doesn't require lots of compute power nor high bandwidth. So the user could choose a node with certified uptime, which means very high availability. This would ensure an efficient workload for their specific needs.

Farmers themselves can choose the price they want to put for their 3Nodes based on the quality and resources they offer.

The main advantage of this method is that it would be mainly automated once the DAO decides the different bonus factors for the different certified parameters. Farmers would have their 3Nodes checked and get additional rewards at the PoC stage if their 3Nodes perform well in given certified parameters categories.

To implement these automated parameters testing, we need both the testing mechanism and the public interface to present those results to the users. The validators would be in charge of the testing.

3Nodes Parameters: Farmers

Depending on the situation, farmers could set specific prices for their 3Nodes' resources:

  • Different options for farmers when they set their 3Nodes:
    • Default price
      • Can have different default prices
      • This would be by default when you deploy a 3Node on the grid
    • Certified/high-quality pricing
      • Default pricing of the grid
        • This could be decided by the DAO
        • This would allow for plug-n-play experience
      • Default pricing of the certified vendor
    • Custom
      • Farmers define their own price

As a general consideration, all hardware would farm the same PoC rewards. Farmers can ask for custom PoU rewards based on the quality of their 3Nodes.

Validators Check Nodes parameters

The validators would run tests to check the 3Nodes's capacity and quality.

  • Validators would run tests
    • Make different checks and benchmarks
      • Correlate with each other
        • For ssd speed, cpu speed, etc.
    • Done by multiple parties
    • Doesn't have to go in a blockchain
      • To be define where we put it
    • Users can ask the verifying/monitoring nodes
    • Users can download the data
      • Check the database, e.g. from the last 2 months
    • First instance of benchmarking
      • 3script
      • 3bot can keep the same metrics

Certified Boot Loaders

Certified nodes provided by certified vendors would need certified boot loaders. This ensures that the Zero-OS running on the 3Node is the same as the Zero-OS on the ThreeFold Hub. The question is: who would offer such boot loaders?

We propose that Guardians could distribute certified boot loaders to farmers. Two parts would be signed: (1) the secure boot keys that get loaded in the BIOS, and (2) the signed boot loader. We note that there would be one signed boot loader per farm. Note that this would be implemented later on. For now, we would keep the current functioning where TF Tech consults the certified node vendors and provide the certified boot loaders.

Currently the fees are per farm. Ideally, we would have certified nodes on chain and make those fees and certification per node instead of per farm. This would give more versatility and resilience to the system.

This certified boot loader could be done with multi-signature threshold signing by the guardians. For example, a minimum of 10 Guardians could be needed to certify a node (or a farm) enabling the farmer to get a certified boot loader.

Proof-of-Capacity and Proof-of-Utilization Distinctions

As a general observation, proof-of-capacity (PoC) is related to the offer phase of the market, where farmers get rewarded simply by offering compute, storage and network units on the ThreeFold Grid, while proof-of-utilization (PoU) is related to the demand phase of the market, where farmers get rewarded when users use their 3Nodes to deploy workloads.

It can be noted that, in this case, PoC is a passive rewards system while PoU is an active rewards system. In the new tokenomics variable farming policy, farmers can actively decide to get more TFT during the PoU/demand phase.

Considering certified nodes and certified indivual parameters, farmers would get more TFT rewards at the PoC/offer phase by having bonus rewards for their certification without needing any workloads to be deployed on their 3Nodes. This is why we call this passive rewards.

When farmers get utilization on their nodes, with the variable farming policy, they can ask more rewards if they think their 3Nodes parameters are worth more. This is why we call this active rewards, as you get more rewards when there is active utilization on the grid.