DIP-1 (DEPRECATED)

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!!! Replaced by DIP-6 !!!

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Abstract

This DIP details the staking commission framework for Darwinia and Crab, impacting validator selection and reward allocation.

Rationale

Inspired by Polkadot, it seems fair to allow validators to set a commission to receive a certain fee from the nominators for maintaining their node.

Polkadot’s design requires a very active market, as validators can change their commission at any moment. This flexibility might allow dishonest validators to increase their commission significantly when their nominators are not paying attention. To counter this, we propose an inverse relationship where higher commission settings are discouraged. There is no standard value for this, leaving it to the market to decide.

Specification

There are 2 validator slots.

Validator A sets their commission to 10%. Validator B sets their commission to 70%. Validator C sets their commission to 90%.

Nominator Aa votes for A with 100 power. Nominator Ab votes for A with 50 power. Nominator Ba votes for B with 100 power. Nominator Ca votes for C with 1000 power.

Election

Due to the inverse relationship, the higher the commission a validator sets, the less power they receive.

A and C are elected as validators, based on the following algorithm:

let pa = power_of(A) = (power_of(Aa) + power_of(Ab)) * (100% - 10%); // , which is `135`.
let pb = power_of(B) = power_of(Ba) * (100% - 70%); // , which is `30`.
let pc = power_of(C) = power_of(Ca) * (100% - 90%); // , which is `100`.

let validators = [pa, pb, pc].sort().iter().take(2).collect(); // , which is `[pa, pc]`.

Reward Distribution

Validators receive their commission first, then distribute the remainder among their nominators. Each nominator receives a share of the reward based on the percentage of their power contribution relative to the total power under this validator.

A total of 100 rewards will be distributed among A, Aa, and Ab.

A will get 10, Aa will get 60 and Ab will get 30, based on the following algorithm:

let ar = 100 * 10%; // , which is `10`.
let remain = 100 - ar; // , which is `90`.
// Reuse the `pa` from the above algorithm.
let aa_of_pa = (power_of(Aa) * (100% - 10%) / pa); // , which is `90 / 135`.
let ab_of_pa = (power_of(Ab) * (100% - 10%) / pa); // , which is `45 / 135`.
let aar = remain * aa_of_pa; // , which is `90 * 90 / 135 = 60`.
let abr = remain * aa_of_pa; // , which is `45 * 90 / 135 = 30`.